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Achieving Operational Excellence by Benchmarking
Rosneft
III Upstream Technologies 2017
October 4th
Proprietary and Confidential © 2017 HSB Solomon Associates LLC
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Confidentiality Statement
This presentation is confidential and intended for the sole use of the client to whom it is addressed. The information and methodologies outlined herein are proprietary, and their expression in this document is copyrighted, with all rights reserved to HSB Solomon Associates LLC (Solomon). Copying or distributing this material without permission is strictly prohibited.
M³ – Measure. Manage. Maximize.®, Comparative Performance Analysis™, CPA™, Performance Excellence Process™, PEP™, Q1 Day 1™, EDC®, EII®, CEI™, CWB™, Solomon Profile® II, RAM Effectiveness Index™, and other marks are registered and proprietary trademarks of Solomon. The absence of any indication as such does not constitute a waiver of any and all intellectual property rights that Solomon has established.
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World’s largest databases of upstream, midstream, and downstream operating performance
“Apples-to-apples” comparisons, letting you truly identify the areas where your facilities could improve
Solomon Benchmarking Global Standard
About Solomon
Global Perspective
Our data is proprietary, not pulled from inconsistent, publicly available sources.
85% of the worlds refining capacity participates in the study
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Benchmarking Services
Thermal Generation
Cogen
Geothermal
Advisory Services
Performance Excellence Process
Q1 Day 1
Workforce Optimization
Strategic Advisory Services
Solomon Services
Advisory Services
Performance Excellence Process
Q1 Day 1
Workforce Optimization
Strategic Advisory Services
Lubes
Aromatics
Olefins/Polyolefins
Propane Dehydrogenation
Ethylbenzene/Styrene
Reliability & Maintenance
Turnaround Duration
Advanced Process Control
Quality Control
Deep Drill-Down
Fuels
Benchmarking Services
Integrated Site Services
Advisory Services
Performance Excellence Process
Q1 Day 1
Workforce Optimization
Strategic Advisory Services
Cost Projection Model
Heavy Oil
Benchmarking Services
Onshore Production
Offshore Production
Enhanced Oil Recovery
Unconventional Oil & Gas
Steam-Assisted Gravity Drainage
Drilling & Completion Costs Production/Uptime Reliability
Floating, Producing, Storing, & Offloading
UPSTREAM POWER
GENERATION
MIDSTREAM DOWNSTREAM
Natural Gas Forecasting
NAGS Retainer Service
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Q1 Day 1
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Strategic Advisory Services
Benchmarking Services
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LNG Processing
Liquid Pipelines & Terminals
Trucking
Petroleum Marketing Terminal
Gas Storage
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Achieving Operational Excellence Why Benchmarking?
• Understand how your company compares to its peers in the areas in which you compete.
• Focus on the key attributes necessary to efficiently and effectively manage and maximize margin.
• Measure and track key performance indicators (KPIs), setting achievable and meaningful targets.
• Benchmarking is a critical step in the overall process of operational excellence.
• Downstream knows they exist in a competitive, valve-added margin business.
• Upstream tends to defer efforts on cost and efficiency during the “boom times” as an unnecessary distraction in the pursuit of growth.
• Key to success, post collapse of oil price, is to re-establish focus on sustainable, margin-driven performance.
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Experience with Rosneft*: Downstream Fuels and Lube Studies
Title Location of Refineries
2002 Fuels & Lubes Study Lisichansk, Orsk, Ryazan, Saratov
2004 Fuels & Lubes Study Lisichansk, Orsk, Ryazan, Saratov
2006 Fuels Study Lisichansk, Ryazan, Saratov
2008 Fuels Study Achinsk, Novokuibyshevsk
2008 Fuels Study Lisichansk, Ryasan, Saratov
2010 Fuels & Lubes Study Lisichansk, Ryasan, Saratov , Novoil,Ufa, Ufaneftechim
2010 Fuels Study Achinsk, Angarsk, Komsomolsk, Kuibyshevsk, Novokuibyshevsk,Syzran
2010 Lubes Study Angarsk, Novokuibyshevsk
2012 Fuels & Lubes Study Novoil,Ufa, UfaneftechimUfa, Ufaneftechim
2012 Fuels Study Achinsk, Angarsk, Komsomolsk, Kuibyshevsk, Novokuibyshevsk, Ryasan, Saratov, Syzran
2012 Lubes Study Angarsk, Novokuibyshevsk
2014 Fuels Study Achinsk, Angarsk, Komsomolsk, Kuibyshevsk, Novokuibyshevsk, Ryasan, Saratov, Syzran
2014 Fuels Study Novoil,Ufa, UfaneftechimUfa, Ufaneftechim
2014 Lubes Study Angarsk, Novokuibyshevsk
2016 Fuels Study Achinsk, Angarsk, Komsomolsk, Kuibyshevsk, Novoil, Novokuibyshevsk, Ryasan, Saratov, Syzran, Ufa, Ufaneftechim
2016 Lubes Study Angarsk, Novokuibyshevsk
* Including Acquisitions
1Q
4Q 9192939495969798
2010 2012 2014 2016
Operational Availability (Without Slowdowns), %
1Q
4Q
70
80
90
100
110
120
130
2010 2012 2014 2016
Energy Intensity Index (EII®)
1Q
4Q
50100150200250300350400450500
2010 2012 2014 2016
Personnel Index, work hr/100 EDC
ROSNEFT RYAZAN
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USA
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Denmark
United Kingdom Azerbaijan
China
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Indonesia
New Zealand
Australia
Bangladesh
India
Angola
Equatorial Guinea
Nigeria
Mauritania
Tunisia Egypt
Netherlands
Solomon Upstream Worldwide Experience > 5,000 O&G fields; >83 FPSOs
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Since 1992
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Solomon Upstream Operations Excellence
Top performers show a balanced focus on cost, production efficiency, reliability, and HSE performance
Good Sustainability HSE
Low Costs
Maintenance
Labor
Energy
High
Reliability
Availability
Efficiency
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Ass
et
A
Ass
et
B
Ass
et
D
Ass
et
C
Ass
et
E
Unit C
ost
, USD/B
OE
Peer Avg
Leader Avg
Asset D
Asset B
Asset C
Asset A
Asset E
r² = 0.9165
Act
ual Cost
, M
M U
SD
Standard Cost, MM USD
Ass
et
E
Ass
et
A
Ass
et
C
Ass
et
D
Ass
et
B
Tota
l O
pera
ting C
ost
Index
Leader Avg
Peer Avg
Operating Cost - Normalized Competitiveness vs Efficiency
Unit Cost Profile – Competitiveness
Total Cost – Normalization Model Output The line represents a standard/average cost. Deviations above and below are normally due to performance and operational philosophy differences.
Total Operating Cost Index – Normalized
1 2
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Asset A
Asset C Asset BAsset E
Asset D
MTBI,
d
MTTR, d
Infrequent Long
Frequent Long
Frequent Short
Infrequent Short
Challenges
Best Performance
Production Efficiency & Reliability Reliability Index Quadrant Analysis
Reliability Index Quadrant Analysis
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Relationship Between Cost and Production Efficiency
High
High
Low
75
80
85
90
95
100
0 50 100 150 200
4-Y
ear
Avg T
ota
l Pro
duct
ion E
ffic
iency
, %
Maintenance Efficiency Index, %
Peers Fields with Sustainable R&M
Top Performers
Harvest Primarily Cost Focus
Under-Investing in Reliability
Fire Fighting Deferral Catch-up Poorer Planning and Execution
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Improvement Paths
High Mechanical Availability and
Low Cost
Low Mechanical Availability and High Cost
No evidence of this route
Eff
ecti
ve
ne
ss
Efficiency
Industry Leaders
Facility
Maintenance Cost, % (USD/PRV)
Mech
anic
al Ava
ilabili
ty,
%
Supported by real data
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For more information:
Sergey Turchin
Director, Projects
4900 Woodway Drive
Suite 1000 | Houston, TX 77056 USA
Phone: +1.713.985.5188 | Cell: +1.832.491.9625
Juan Carlos Alba
SVP E&P Business Unit
Phone: +1.713.985.5189
Email: [email protected]
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