ConocoPhillips Experience in Norway NCS Cluster Seminar Mexico City 15 October 2014
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 or the industries or markets in which we operate or participate in general. 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 may prove to be incorrect and 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). We caution you not to place undue reliance on our forward-looking statements, which are only as of the date of this presentation or as otherwise indicated, and we expressly disclaim any responsibility for updating such information. 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. 2 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.
Presentation Outline Overview of ConocoPhillips position in Norway History from 1969-2014 The Ekofisk discovery Investment history Water injection and recovery Value creation and distribution Norwegian content R&D in Norway 3
ConocoPhillips Europe Business Region 4 As of August 2014
PL720/718 operator PL723 PL615B PL615 Aasta Hansteen Heidrun Aberdeen Visund Huldra Oseberg Alvheim Stavanger Tjeldbergodden Operated by ConocoPhillips J-Block Fields operated by co-venturers Ekofisk Terminal/office Exploration licenses in the Barents Teesside Sea Terminal operated by others (Gassled gas infrastructure not shown on Emden map) Emden Norway London Employees: 2030 Net production: 119,000 barrels of oil equivalent per day, incl. fields operated by co-venturers Grane Troll 5 Source: ConocoPhillips. Per December 2013
6 First Production in Norway - 1971
Ekofisk Development Phases Gulftide 1971 1974 Ekofisk I 1974 1998 Ekofisk II 1998 2014 7
Technology and Investments Give Increased Recovery Production start-up 1971 Jack-up 1987 Water injection 1987 Protecting wall 1988 Ekofisk II 1998 Water injection from seabed installation Expected recovery rate 52% Extra potential? LOFS CT drilling Robotics 17% Tight chalk completions Predictive Analytics Integrated Ops 1970 1980 1990 2000 2010 2020 2030 2040 2050 8 Source: ConocoPhillips
MBOE/D Looking Ahead the Next 40 Years Ekofisk II Ekofisk I Ekofisk future 1971 1988 1998 2010 2050 9 Source: ConocoPhillips
World Class Integrated Operating Model Drilling Operation and logistics Production optimization Integrated planning Well integrity Well services HSE Operation support Production delivery 2004 2005 2006 2007 2008 2009 2010 2013 2014 Safety Risk Cost Revenue More efficient, proactive and predictive operations 10
Historical Safety Improvement Frequency per Million Work Hours 40 35 30 Lost time injuries 1970s: Serious accidents 25 20 15 10 5 1980s and 90s: Focus on injuries 2000: Prevention, technical and operational integrity; design of equipment, procedures and maintenance program 0 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 O2 O3 O4 O5 O6 O8 O9 Our goal is to spot the hazards before there is an injury! 11 Source: ConocoPhillips
Total Value Creation from Greater Ekofisk - 1969-2013 Employees: $ 13 billion USD Goods and services $ 111 billion USD Lenders: $ 6 billion USD Owners: $ 30 billion USD Taxes and fees: $ 159 billion USD 12 Total value creation on Greater Ekofisk: $ 319 billion USD - in 2013 USD value Source: ConocoPhillips Owners: ConocoPhillips 35.11% Total 39.90% Eni 12.39% Statoil 7.60% Petoro 5.00%
Historical 70% Norwegian Share 1993 Embla 2/7 D Topsides: Rosenberg Steel jacket: Heerema, Netherlands 1996 Ekofisk 2/4 X Topsides: Haugesund Steel jacket: Aker Verdal 1998 Ekofisk 2/4 J Topsides: Aker Verdal/Haugesund/ Amec Steel jacket: Aker Verdal 2000 Eldfisk 2/7 E Topsides: Aker Stord Steel jacket: Aker Verdal 2005 Ekofisk 2/4 M Topsides: Aker Egersund Steel jacket: Aker Verdal 2013 Ekofisk 2/4 Z Topsides: Aker Egersund Steel jacket: Dragados, Spain 2014 Ekofisk 2/4 L Topsides: SMOE Singapore Steel jacket: Kværner Verdal 2014 Eldfisk 2/7 S Topsides: Kværner Stord Steel jacket: Dragados, Spain 13 Source: ConocoPhillips
State Governance of the Petroleum Activities MPE Ministry of Petroleum and Energy NPD Norwegian Petroleum Directorate PSA Petroleum Safety Administration 14 Source: Norwegian Petroleum Directorate
Norway Petroleum Research Cooperative model between industry, government and research institutions Authorities actively engaged through the Norwegian Research Council (NRC) The NRC can fund from 20 to 80 percent of joint industry projects 15 Source: Norwegian Petroleum Directorate
Norway Research License Agreements The license operator can charge co-venturers for general R&D costs Amount determined as a fixed percentage of total operating costs Needs to benefit the Norwegian Shelf Operator allowed to maintain ownership of IP rights Cost fully deductible against marginal tax rate 16 Source: Norwegian Petroleum Directorate
Anniversary video 40 years Ekofisk video will appear on this slide