“e-Business in an international oil company”

22.04.2002WTO

Seminar on “e-Business”Geneva

Morten Sven Johannessen, Statoilmosvejo@statoil.com

Statoil – some facts

• Established in 1972

• Headquarters in Stavanger, Norway

• Partially privatized in 2001 through IPO process

• 16,700 employees in 23 countries

• Production/Reserves: 1 mmboepd/4.3 bn boe

• Marketing 2/3 of Norwegian gas volumes

• World’s 3rd largest crude oil seller

Integrated oil and gas company with strong E&P focuswww.statoil.com

Why does Statoil need e-Business?

•Globalisation of industry.

•Reduce cost of extracting, refining and marketing oil and gas.

•Maximize usage of scarce and disbursed resources.

•Take advantage of technical advances in IT and telecommunications.

•Reduce risk and mitigate best practice in operations and Health Safety and Environment (HSE).

•Offer training and consistency in information distribution throughout the company, regardless of geography and time-zones.

e-Business in Statoil

e-business–e-commerceƒb2c (business to consumer)ƒb2b (business to business)ƒb2e (business to enterprise, business to employee)

–e-collaboration–e-learning

Statoil's e-business Roadmap

Create HarvestBuild and operate

Identify opportunities

Organise and prioritise

Develop skills and awareness

Launch pilots

Take ongoing and new e-business initiatives "live"

Measure, improve, expand

Integrate e-business into corporate and FO/RO strategy processes

Reap benefits with:

Supply chainCollaborationRemote operation

Borderless information management and effective knowledge sharing

Foundation

..1999 2000 2001 2002 ..

•Implement new work-processes•Fully integrated SAP solution•Organization change•Organization readiness

E-business activity matrix Statoil

Difficult Easy

Low

High

Ease of implementation

Value Creation Potential

= Initiative fully operational, active users exist

= Initiative decision has been made. In development phase.

= Planned initiative. Final go-decision not made

NetShop Norway/Sweden

Netshop Lubricants

NetShop Denmark

NetShop Ireland

Eureka NorwayEureka outside Norway

Trading paper deals

Market information

Statoil Card

TradenetElectronic doc.

Distribution

BOB extranett

Licence web

E-logistics

Tampen improvement

E-”fields”E-engineering

Mat.master/Tech.info

Real Time systems

E-”fields”pilots

LicenseWeb

Dispatch Web Request

Emden Hub

Upstream Market

“Phoenix”

Clearing

Troll Swing/Lifting accounts“Beringen”

E-learning

E-learning

RecruitingE-travel

E- Collaboration tools

Portal framework

Reduction of internal transaction costsReduction of external transaction costs

..result, reduced costs Improved and simplified flow of information and dataHigh speed access to informationStandard infrastructure and standard collaboration tools

..result, better, quicker safer and more cost efficient information

Harvest further benefits from existing systems ..result, "operational excellence" = competitive edge

Where are the benefits?

What are the expected effects?

•Reduced cost of exploration, production, refining and marketing

•Reduced time to oil, better recovery rate

•Improved HSE, reduce accidents and unwanted situations

=better competitiveness

How will this affect our business?

•Increased cooperation on establishing standards and processes

•Visibility of suppliers and accessibility of suppliers on Marketplace infrastructure

•Ease of operation, faster time to market

•Ease of starting up in new locations, better utilization of existing infrastructure

Effects of taxation on business transactions crossing borders

Effects on procurement of tangible goods across bordersNo intended effects,

–but may lead to consolidation of suppliers,–creates an opportunity for good local suppliers in new markets

Effects on procurement of in- tangible goods across bordersInternet as delivery platform,

–Intellectual property will be distributed using the Internet, Intranet andExtranet, difficult to track. Companies will optimise according to need, i.e. on managing access through corporate wide Intranet

Internet as business driver for new products and servicesTangible goods become digitised and transformed into services, i.e. valves machinery, pipelines. Physical goods will become value add services managed over the net

Effects of taxation on business transactions crossing borders

Effects on servicesGeographically disburse

–Best of breed services bought where services are offered, i.e. engineeringand IT from India, service centres (call centres) from Eire. Using the Internet as transaction, delivery and communication tool

Bottom line, we optimise as we have always done, but do not exploit the net to avoid taxes

B2B Pilot

eOil

Trade Ranger

New user interface and

internal catalogue

Regional catalogue

Global e-commerce solution for the oil and

gas industry

1999

The road to b2b e-commerce in Statoil

2001

Horizontal marketplace

Horizontal marketplace in

Scandinavia

2000