Value@Speed

EnergyIndustry

CEOPresentationOctober2000LeadingPracticesWorkshop

29–30thNovember20011WelcomeandIntroductionsDay1ChineseOilIndustryContextThursday’s–KnowledgeSharingSessionDay2Friday’s–BasicProgressivePioneeringSessionAgendaWelcomeandIntroductionsDay1ChineseOilIndustryContextThursday’s–KnowledgeSharingSessionDay2Friday’s–BasicProgressivePioneeringSessionAgendaWelcomeandIntroductionsDay1ChineseOilIndustryContextThursday’s–KnowledgeSharingSessionDay2Friday’s–BasicProgressivePioneeringSessionAgendaOurIndustryExperienceCAPCOTheAromatics(Thailand)PublicCo.Ltd.Ethylene/PolyEthyleneMalaysiaMitsubishiOilEightdrivingforcesintheglobalenergy&chemicalssectorMarketderegulationandliberalizationM&Aactivity&restructuringDiversification,newcapability&revenuestreamsIncreasedInvestmentVolatileoilpriceAccessingbesttalentExploitationofnewtechnologyHighercustomerexpectationsGLOBAL

CHEMICALS&ENERGYInAsiaPacific,marketdynamicswillcontinuetoputdownward

pressureonmarginsNote:MapnottoscaleCHINA

MostattractiveglobalmarketNewmarketentrantsInfrastructurechallengesImportrestrictionsWTOentryimpactsASEAN

IncreasingderegulationMarket“shake-outs”Emerging“Nationals”NewrefiningcapacityJAPAN

MarketderegulationIncreaselevelofimportsRetailpricewarsRe-structuringnetworksKOREA

GoodmarginshistoricallyMovingtoproductsurplusHyper-competitioninRetailAUSTRALASIA

MatureandtightmarginsBarrierstomergersNewindependentsIncreasedimportsAsiaPacificRegionMulti-nationalsviewERP&SCMastoolstotakeperformance

beyondscaleWeexpectmulti-nationalswillfocuson;AggressivecompetitivestrategiesLeverageofERP&supplychaincapabilitiestomaintaincompetitiveadvantageEmphasisondecisionsupportandeconomicanalysisSomewillorganize

tocompete;

otherswillbecome

partofthebattlefieldMarketCapitalization($bn)Focused0501001502002503003505,00010,00015,00020,00025,000Mid-TierSuperMajors0Totaloil/NGL/gasreserves(MBOE)Source: PetroCompanies;CI;GoldmanSachs;

AccentureAnalysis-September2000MarketCapitalizationVsTotalReservesTechnologyhasenabledandsupported5phasesofbusinesschangeAlignmentIntegrated

Supply/DemandPricingConfigurationCapacityMaterialProductionDistributionTransportationATPCTPIntegratedDemand/SupplyPlanningDemandDecisionSupport/AdvancedPlanning&SchedulingPhase3Function`FunctionalOrganisationPointsolutionsPhase1InformationSharingProcessOrientationProcessTransactionsystemsPhase2IndustryNetworksStrategicValueNetworksHostedsolutionsPhase5CollaborativeChannelsInternet-EnabledCollaborationCollaborativeSCmanagementPhase4TransactionalTechnologyenablersDisparateBusinessesConsolidationPhase0PointsolutionsThechallengesfortheChinesedownstreamoilindustry

aresignificantDecreasecrudecostOptimizecrudeslateIncreaserefineryutilizationIncreaseReturnonCapitalInvestmentImproveyieldoflightproductsDecrease&optimizedistributioncosts(1o&2o)FormstrategicalliancesIncreaseretailsalesend-to-endPerformanceImprovementChallengesTheuniquecharacteristicsoftheoilindustrywillcomplicatethejourneyFrom…DistinctfunctionaloperationssolutionsGapsindataavailabilityandaccuracyPeoplebasedcapabilities(Art)Pointsolutionsforsupply,transport,terminaland,retailoperationsTo…SeamlessintegrationReal-time,exhaustivenetworkdataProcessandsystembasedcapabilities(Science)End-to-endnetworkoptimizationObstacles&RoadBlocksTraditionalfunctionalsilosScopeofdatarequirementsNeedforcollaborationandprocessesLackofrobustperformancemanagementsystemsInherenttimelagsassociatedwithphysicaldeliveryWelcomeandIntroductionsChineseOilIndustryContextThursday’’s–KnowledgeSharingSessionFriday’s––BasicProgressivePioneeringSessionAgendaProgressiveBasicPioneeringManualtrackingoftransactions.NorealtimevisibilityofdataERPsystemimplemented,butmanyhandoffsremainMultipleinstancesofERPsystemCommonbusinessprocessesacrosssimilarbusinessesERPsystemusedtomonitorbusinessperformanceOurApproachforThursday&FridayThursday’’sSessionCaseStudyApproachusingClientexamplesDescribethecurrentsituationThecomplicationsarisingfromthesituationWhatdidtheydoWhatweretheresultsWhytheseareconsideredLeadingPracticesFriday’sSessionDiscussionsessionusingexamplesfromourclient’sjourneyfromBasic,toProgressivetoPioneeringThursday’’sAgendaThursday’’sKnowledgeSharingSessionCaseStudyApproachusingClientexamplesLogisticsManagement––MovingfromPushtoPullAdamExcellenceinDownstreamRetailKenPreventativeMaintenanceAmesMRO&ProcurementAdamDoreenWinnieZhouTiWinnieThisclientisamultinationaloilcompanywith30refineries,300terminals,alargeretailandcommercialcustomerbasein40countriesMultinationalOilcompanyNocommonERPorSCMlanguageTimeMeasuresHourlyDailyWeeklyMonthlyYear-To-DateNocommonlanguageacrossfunctionsSALES&MARKETINGSUPPLY&DISTRIBUTIONTERMINALLINGREFININGCRUDEACQUISITIONPRIMARYDISTRIBUTIONSECONDARYDISTRIBUTIONSELLFUELSTOCUSTOMERSREFINING&TRADINGCostMeasuresFixedandVariableCostofGoodsGrossorNetTotalandUnitAssetMeasuresWhoseAssetWhoEarnstheReturnWACCQuantityMeasuresLitresKilolitresMegalitresTonnesBarrelsProductreplenishmentswerescheduledbasedontheullageavailableinthetankOperatingaPushsupplychainSupplyPushDetermineDemandHowtoDeliverWhat/WheretoMake/SourceValueCrudeWhattoFeedWhattoHaveWhatis

NeededWhenProductDepotsMarketPrimaryDistributionCrudeSupplyRefiningCrudeDepotsDemandPullSecondaryDistributionBaseinventory,salesandforecastdatawassuspectandunreliableCrude,intermediateandfinishedrefinedproductinventorylevelswerehighResultedinhighinventorylevelsthatlockedupworkingcapitalTotalInventory:68.8MMBBLValue:US$1.5BillionTotalAverageSalesVolume:509.5MMBAverageCover:39.6days(Avg1997)(Avg1997)SingaporeHongKongMalaysiaPhilippinesPakistanAustraliaNewZealandSouthAfricaE&NAfricaCentralAfricaKoa(Japan)KoreaThailand(4)0.02.04.06.08.010.012.014.016.018.0Stock(MMB)AverageAnnualSalesVolume(MMB)-20.040.060.080.0100.0120.0SingaporeHongKongThailand(4)MalaysiaPhilippinesPakistanAustraliaNewZealandSouthAfricaE&NAfricaCentralAfricaKoa(Japan)Korea5152615138531047912DaysofcoverSalesVol(MMB)InconsistentsupplychainplanningandschedulingprocessesacrossallcountriesNoglobalkeyperformanceindicatorsTheinventorywasaresultofapoorlyplannedpushsupplychainOperatingExpenseWorkingCapitalCrudeAcquisitionRefiner