Western Canada Business Unit. Closing the Gap- the Journey to Integrated Operations Excellence

Transcription

1 Western Canada Business Unit Closing the Gap- the Journey to Integrated Operations Excellence

2 Cautionary Statement The following presentation includes forward-looking statements. These statements relate to future events, such as anticipated revenues, earnings, business strategies, competitive position or other aspects of our operations or operating results. Actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas prices; operational hazards and drilling risks; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects; unsuccessful exploratory activities; unexpected cost increases or technical difficulties in constructing, maintaining or modifying company facilities; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations or from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to ConocoPhillips business and other economic, business, competitive and/or regulatory factors affecting ConocoPhillips business generally as set forth in ConocoPhillips filings with the Securities and Exchange Commission (SEC). Use of non-gaap financial information This presentation may include non-gaap financial measures, which help facilitate comparison of company operating performance across periods and with peer companies. Any non-gaap measures included herein will be accompanied by a reconciliation to the nearest corresponding GAAP measure in an appendix. Cautionary Note to U.S. Investors The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves. We use the term "resource" in this presentation that the SEC s guidelines prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures in our Form 10-K and other reports and filings with the SEC. Copies are available from the SEC and from the ConocoPhillips website. 2

3 Agenda About us ConocoPhillips ConocoPhillips Canada WCBU Integrated Operations Excellence Journey Results achieved Path forward Questions 3

4 ConocoPhillips: Unmatched as an Independent E&P Today World s largest independent E&P company Diverse asset base with scope and scale Multiple sources of growth Positioned in key resource trends globally Significant technical capability Strong balance sheet Commitment to shareholders 1 Production from continuing operations. World s largest independent E&P based on production and proved reserves. Natural gas production and resources targeted toward liquefied natural gas depicted as LNG. 4

5 5 Canadian Leader

6 Western Canada Business Unit (WCBU) 10,000 operated wells, 7,000 partner-operated ~ 200 new wells / 150 reclaimed annually 78 processing facilities (gas plants / oil batteries) 1,350 compressors (1.6 million HP) 1,600 tanks & 18,000 pressure vessels 22,000 km of pipeline 20 turnarounds per year 20 percent of gas production is processed at third-party facilities 15 percent of gas processed at company operated facilities is thirdparty gas 6

7 Where We Have Come From (2002) Phillips Conoco (2006) Burlington Resources (2001) Gulf Petro-Canada Empress Canadian Hunter Poco Crestar Gulf Ocelot Crestar Ranchman Resources Grad and Walker Pennzoil Archer Petroleum Mannville Oil and Gas Renaissance Stampeder Exploration Stampeder Exploration International Colin Ballistic Energy 7

8 The Journey Begins: 2007/2008 Diverse, mature and declining assets/production across Western Canada Business Unit Continued rise in Lease Operating Expenses (LOE) Need for improved safety performance: Personal Process Lack of consistent process, standards, visual and operating philosophy to leverage best practices and implement changes as required 8

9 Proposed Solution Adopt an Integrated Operations Philosophy to improve operational performance through the effective use of technology and collaboration across disciplines and geographies Leverage corporate Operational Excellence Framework to develop and implement consistent processes and best practices to elevate operation and safety performance 9

10 Definition of Integrate Integrate In te grate verb \ in-tǝ-,grāt\ To form or blend into a whole (Unite) To incorporate into a larger unit To end the segregation of and bring into a common and equal membership in society or an organization (under a common vision/goals) Retrieved from 10

11 Misconceptions of Operations Excellence Big company bureaucracy and processes would negatively impact effectiveness and efficiency Inflexible (one size fits all) global processes and standards Individual goals would rob valuable resources and distract team from delivering priorities, goals and commitments Operations focused on production, cost and safety therefore the opportunity to improve was not large enough to warrant the effort and energy it would take to fully embrace and implement an OE program Operations across the globe were too geographically, geologically, culturally diverse for consistency in processes, operating philosophies and/or knowledge sharing 11

12 COP Upstream Operations Excellence (OE) OE is a systematic approach to providing guidance and structure to enable safe, reliable and efficient management of operations OE approach is consistent, collaborative, objective and recognizes the operational and business challenges inherent in a global organization OE provides the tools to identify and turn opportunities into realized improvement resulting in higher value returns 12

13 COP Upstream Operations Excellence (OE) OE methodology is aimed to strike optimal balance between the discipline and predictability gained from structured global processes and flexibility to adapt to the unique nature and varying risk of global operations OE provides the platform for the retention and sharing of corporate knowledge critical to future success leveraging corporate size and subject mater expertise OE program and frame work exist to directly support and enable upstream operations to achieve their business objectives / goals 13

14 Operations Excellence Framework Operations Excellence Leadership Team (OELT) Integrated Operations Philosophy A&OI FET M&R FET PS&O FET P&S FET Leadership FET Cost FET Global Chemical NoE Pipeline & Subsea Structure Integrity NoE Facilities Integrity NoE Defect Elimination NoE Maintenance Management Systems NoE Upstream Rotating Equip NoE Controls Safety Systems Power NoE Artificial Lift NoE Facility Optimization NoE Well Optimization NoE Flow Measurement & Metering NoE Shutdown Planning NoE Integrated Planning NoE Operability Assurance NoE Small Projects NoE Wellview NoE 14

15 First Steps: Integrated Reporting Energy Components HOOPS FieldView HIS Well Launcher GUIs WAR/Guidance Uplift SSR Request Tracker InfoView/CDR (Crystal Reports) CSExplorer 3 rd party data loads OCM WellView Prism RMS Inactive Well Master SCADA Historian (Cygnet) BW (SAP data) Alberta Registry Crown Royalty Budgets Shut-in Wells Allowables and more CDR Oracle db: ODWP1/RPT_PRODOPS Well list (PS_LIST_MASTER_MV) Estimates (2 and 3 stream) WAR/Guidance volumes Gov t and Accounting actuals POE (ASC targets and Downtime vols) RTO data (SCADA) Uplift volumes and count Production budgets and Inactive Well List/Chrono. and more Energy Components Wellsite (Global Intel Farm) Well Launcher BW (SAP data) NitroView Inactive Well Master Prod. Accounting Accrual Low Prod. Royalty AB Crown Royalty Adhoc (xls) 15

16 Integrated Operations Business as Usual Integrated Operations is our operating philosophy We seek to improve operational performance through the effective use of technology and collaboration across disciplines and geographies Field Operations Integrated Operations Centres Integrated Operations is based on a culture of: Leveraging Information Collaboration Accountability Continuous Improvement Trust and Mutual Respect Engineers Calgary Support 16

17 Integrated Operations Centres (IOC) Four Integrated Operations Centres Staffed with senior, credible operators Roles and responsibilities 17

18 Report Example: Run Efficiency Report Report Highlights: Ranks Top 30 Wells by ASC, indicating Production, Downtime (D/T) and efficiency category (on-target, etc.) Provides drill-down into Production, D/T and ASC by individual well on specific Runs Provides YTD Production and Efficiency trend charts with target by Run Provides historical production, ASC and operating efficiency trends Updated Weekly 18

19 Report Example: Hit List Report Highlights: Wells listed by Run - ranked by variance to ASC Used to prioritize daily work ed daily Operators own the data Production data accuracy essential Version 4 Enhancements: SCADA and non-scada Non-op on one run Updated as data changes 19

20 OES Top Opportunities: Celebration Through Integrated Operations, we re maintaining a relentless focus on: Safety Cost Production... and we are seeing results 20

21 Lease Operating Cost Reductions Labour and Contracting 21% Repairs and Maintenance 33% Materials and Supplies 12% Chemicals 30% Trucking / Hauling and Other 28% Total LOE 20% Total reductions to-date: >$200 MM 21

22 The Path Forward The windshield is larger than the rearview mirror

23 Q&A