Creating the energy company of the future: Arnold Volkenborn, Asia Pacific Lead, Accenture Strategy and Chea Wai Seng, Energy Digital Lead for ASEAN, Accenture Consulting discuss digital disruption in the oil and gas industry.

1. 13 – 14 FEBRUARY 2017
KUALA LUMPUR,
MALAYSIA
MATURE FIELD
REDEVELOPMENTS:
HOW TO STAY
RELEVANT FOR THE
FORESEEABLE FUTURE?

2. 2
O&G COMPANY OF THE
FUTURE
ARNOLD VOLKENBORN &
CHEAH WAI SENG
ACCENTURE
Copyright © 2017 Accenture All rights reserved.

3. INTRODUCTION
CHEAH WAI SENG
Managing Director
Digital Lead for Energy, ASEAN
Accenture Consulting
ARNOLD VOLKENBORN
Managing Director
Head of Asia Pacific
Accenture Strategy Energy
Copyright © 2017 Accenture All rights reserved. 3

4. OUTLINE 1. THE O&G COMPANY
OF THE FUTURE
2. DIGITAL DISRUPTION
IN O&G
3. WHAT NEXT?
Copyright © 2017 Accenture All rights reserved. 4

5. Small Capex
Peak Oil Demand
Digital
O&G COMPANIES: TODAY VS FUTURE
Big
Bespoke
Many
Small
Standard
One/few
TODAY
1
2
3
FUTURETRENDS
FOCUS FOR TODAY
Copyright © 2017 Accenture All rights reserved. 5

6. DIGITAL TECHNOLOGY MATURITY CURVE
DIGITAL TECHNOLOGY MOVES FASTER
THAN AN ADVANTAGE
Digital3
1
2
3
4
6
7
today
5
Cumulativecapability
1950 20201960 1970 1980 1990 2000 2010 2030
Amazon.com
Founded
1994
Public
Internet
1991
System/390
1990
System/360
1964
Mainframe
Client-Server
and PCs
Web 1.0
eCommerce
SAP
founded
1972
PC
1977
Sales of PCs
peak
2010
ARPANET 1969
Server-
Host
AWS launched
2006
Web 2.0
2005
Web 2.0,
Cloud, Mobile
Salesforce.com
Founded 1999
Public Cloud
Mainstream
iPhone
2008
Self driving car
2010
IoT and Smart
Machine
IoT, M2M
1999
?
Cognitive
IBM Deep Blue 2007
Big Data, Analytics,
Visualization
Big Data 1997
4.4 Zettabytes of data
in 2014, IDC
Blockchain
2008
Digital vs. technology: disruption vs. speed
Source: ASE Analysis
Copyright © 2017 Accenture All rights reserved. 6

7. >1000 ENERGY DIGITAL START-UPS, RAISE
>300BN CAPITAL
Digital3
Source: Venture Scanner, Moji Karimi, ASE analysis
Copyright © 2017 Accenture All rights reserved. 7

8. OUTLINE 1. THE O&G COMPANY
OF THE FUTURE
2. DIGITAL DISRUPTION
IN O&G
3. WHAT NEXT?
Copyright © 2017 Accenture All rights reserved. 8

9. DISRUPTIONS IN THE ENERGY SPACE
DISRUPTION TYPE
Disruption of the
“What”
Disruption of the
“How”
Rise in EVs and
Self Driving Cars
Growth in
Renewables
Non-Tech
Tech
• Processes need to be lean & dynamic
• Massive data , real-time for advanced
analytics
• Fluid organizations
• Augmented decisions
• Open ecosystem
• Shared knowledgeAutomation
& Speed
Machine
Learning
Connectivity
Lean & Dynamic
Operations
Re-designed
Organization &
Capabilities
Operator, Vendor,
Customer Ecosystem
Stricter
Regulations
• 70% of petroleum used in transportation
• EV growth 70% (from 2014/15)
• Drop in cost for renewables since 2010:
70+% for solar and 50+% for wind
Oil demand
for transportation
• Paris agreement: power gen to account
for 40% reduction of global GHG over
next 30yrsNatural Gas demand
Millennial
Workforce
Short-Cycle
Investment
Free Market
KEY DISRUPTIONS IMPACT
Copyright © 2017 Accenture All rights reserved. 9

10. THEMES AND INITIATIVES
FOUR PRIMARY THEMES WILL BE DISRUPTING
THE O&G INDUSTRY
Note: 1)On-demand Fuel delivery
Source: World Economic Forum, Accenture Strategy Energy
Themes Initiatives Sub - Initiatives
Digital Asset Lifecycle
Management
Circular Collaborative
Ecosystem
“Beyond the Barrel”
Energizing New Energies
New Era of Automation
Advanced Analytics & Modeling
Connected Worker
Digital Information Sharing & Operational Transparency
Real Time Supply / Demand Balancing
Digital Customer Services
Omni-Channel Retail & Experience based Services
Consumer Energy Choices
Autonomous Operations & Robots
Remote Operations Center
Predictive/ Prescriptive Maintenance
Operations Optimization
Cognitive Computing
Block-chains / Smart Contracts
3D Printing/Additive Manufacturing
Wearables
Targeted Digital Marketing
Hyperlocal Mobile Fuel Options1
Alternative Energy Choice & Platforms
Copyright © 2017 Accenture All rights reserved. 10

11. PRELIMINARY VALUE AT STAKE
DIGITAL TRANSFORMATION UNLOCKS UP TO $1.6-
$2.5 TRILLION OF VALUE
USD Bn
Cumulative Industry Impact –
2016-2025 – USD bn1
TotalStartups
1
Downstream
779
535
MidstreamUpstream
90
153
WORK IN PROGRESS
Note: (1) Impact to Earnings before Interest and Taxation (EBIT); mt refers to Million tonnes.
Source: World Economic Forum, Accenture Strategy Energy Analysis,
Cumulative Societal & Customer Impact –
2016-2025
108K Barrels of Oil Spills avoided in Midstream
Operations
24.1% reduction in accidents & injuries
120K Barrels of Oil Spills avoided in Upstream
operations
$637bn total Societal impact
791 Mn Gallons of water usage reduced
2,195 mt CO2 equivalents, 4.89 mt SO2, 1.13
mt NOX, & 11.48 mt CO emissions avoided
$5.2 bn in potential productivity improvement from
556 mn hours of time savings
$945bn total business impact
Copyright © 2017 Accenture All rights reserved. 11

12. HALF OF THE O&G COMPANIES WILL INCREASE
THEIR DIGITAL SPEND
ROBOTICS, AI AND WEARABLES ARE THE MAIN AREAS EXPECTED TO SEE INCREASED INVESTMENT
38% 36%36%
57%
31%
44%
13%
23% 22% 20%
35%
12%
16%
28%
38%
30%
Mobile
devices
Artificial
intelligence
IoT Robotics
& drones
Cloud Collaboration
& social tools
Wearable
technology
Big Data/
Analytics
+15% +7% +10%
Less or don’t know
same amount
more
significantly more
56%
46%
45%
Faster and better decisions
Real-time decision making
Better asset management
80%
30%
36%
14%
20%
Source: Accenture + Microsoft survey
Copyright © 2017 Accenture All rights reserved. 12

13. EXAMPLE: APPLICATION OF DIGITAL AND
ANALYTICS HAS SIGNIFICANT IMPACT ON
OPERATIONS
Copyright © 2017 Accenture All rights reserved. 13
“In the past we just
reported on data.
Analytics has
transformed that by
creating value from that
data. We can now
analyze and predict
outcomes.”
Shaun Gregory
Senior Vice President of Science,
Technology and Strategy

14. ASPIRATION: WHAT IF THE FIELD OPERATED LIKE
UBER AND THE WELL WAS THE “CUSTOMER”?
THE BRAIN
AI-based hub of
operations
Hauling, roustabout, workovers
Multi-skilled
technicians …
… with support
apps: Mobility smart
glasses virtual reality
Summon help for artificial lift failure
Dispatch tech; virtual reality assists with
instructions
Auto artificial lift
optimization
Update algorithm
Remote multi-asset
hub of operations
Cross-assets analytics;
dispatch of robots
Call maintenance technician if issue
Saltwater
disposal
Pre-programmed
drone surveillance route
Virtual learning
Each day, intelligent well
reports health & requests
support to Skynet
Predictive algorithms design
location-based route
prioritization for multi-skilled
crew
Wells reprioritize real time as
issues arise; directly call for
support as needed
Drones provide remote
surveillance support and “drop
off” robotic tech support
Skynet manages the field (eg
optimizes production, predicts
failures, pre-plans workovers,
rates tech performance)
CAPABILITIESEMERGING DIGITAL UNCONVENTIONAL

15. DIGITAL IN MATURE FIELDS
DIGITAL TRANSFORMATION COULD BE A GAME
CHANGER TO MATURE FIELDS
Source: ASE Analysis
What is Digital’s role in a lean, nimble and asset focused mature field operations?
Why mature fields are the best candidates for Digital Transformation?
Abundance of historical data Easily scalable to multiple assets Production at stake is small
Empowers decision
making towards the
bottom of the
organization
Drives the culture of
continuous
improvement to the
organization
Enables tighter
integration between
functions and with
suppliers
Streamlines reporting
processes and speeds
up decision making
Simplifies
organization to focus
on key value-adding
activities
Analytics
“ Generates insights
through analysis and
visualization”
Cloud
“Enables greater
visibility to a single
source of information”
Automation
“Executes routine and
time consuming tasks by
design ”
Mobility
“Reaches out and
interact with people on
business needs”
IoT
“Connects everyone in a
collaborative ecosystem”
Copyright © 2017 Accenture All rights reserved. 15

16. INTEGRATED OPERATIONS: DIGITALIZING A NEW WAY OF WORKING
IO, POWERED BY DIGITAL, CAN DEMONSTRATE
THE CRITICAL CHARACTERISTICS REQUIRED TO
ADDRESS THE DYNAMIC NATURE OF OPERATIONS
…
• Activity planning
• Logistics scheduling
• Material management
• Manpower requirements
• Well monitoring
• Reservoir surveillance
• Interventions
• Artificial lift
Integrated
Planning & Execution
Well & Reservoir
Management
• HSE compliance
• Process/equipment failure
• Defect identification
• Turnaround tracking
• Production surveillance
• Bottlenecks identification
• Hydrocarbon allocation
• Blending optimization
Production OptimizationOperations & Maintenance
BRAINS OF THE
OPERATIONS
IO
Offshore Ops
Logistics
Procurement
Warehouse
Onshore Ops
Projects
Subsurface
CHARACTERTICS
Real-Time
• Real-Time surveillance and
performance tracking
• Faster response /
optimization
Predictive
• Big Data, Analytics enabling
scenario-driven analysis
• Focus on proactive
intervention, optimization
Automated
• Remote operations
• Data-backed decisions
• Minimized human error
Insight-driven
• Leverage institutionalized
data allowing look-back into
solution performance
• Actionable insights
Seamless collaboration
• Virtual collaboration,
anytime, anywhere
• Enabled by open platform,
asset light model
Real Time connectivity Real Time connectivity
Seamless cross-functional collaboration anchored on value optimization and delivery
Source: ASE Point-of-View
Copyright © 2017 Accenture All rights reserved. 16

17. IOC: MOBILIZING THE POWER OF DIGITAL
… DRAMATICALLY CHANGING THE WAY WE WORK
AND DELIVERING TANGIBLE VALUE
Total SavingsOptimizationSurveillance
LowCase
3-5%
3%
2%
Field
Management
5%
HighCase
2-3%
1%
7-12%
7%
2%
2-4%
2%
2%
Impact for a typical effective IO Center
Representative share of production opex and capex
Well “The Customer”Field “The Uber”
Centralized field management, based on digital intelligence, optimizes production, predicts failures, pre-plans
workovers, rates tech performance
AI & Analytics
based Field
Management
Support
Applications
Multi-skilled
Technicians
Auto optimization
Update algorithm
Virtual learning
Call maintenance technician if issue
AI based
operations
center
Call in tech for artificial lift failure
Tech Virtual Reality to “see” instructions to repair
Vendor Pool
Remote multi-
asset ops hub
Pre-programmed
drone surveillance route
IOC
Copyright © 2017 Accenture All rights reserved. 17

18. OUTLINE 1. THE O&G COMPANY
OF THE FUTURE
2. DIGITAL DISRUPTION
IN O&G
3. WHAT NEXT?
Copyright © 2017 Accenture All rights reserved. 18

19. THE WORLD NEEDS O&G CO V.4
Analytics
Capital
Capability
Productivity
Regulation
policy
Development
stage Global
trade
relation-
ships
New
Products
Economic
activity
Manufacturing
Infrastructure
Transport
Security
Health
Care
R&D
Banking
Subsidies
Taxes
Learning
curves
Collaboration
Pricing
Societal
values
Consumer
preferences
National
gov’ts
Tech.
adoption
Consumer
behavior
O&G Co
V.4
Digital
Downstream
Energy
Security
Regional
Growth
Upstream
Adjacent
Businesses
New
Companies
Source: Accenture Strategy
Copyright © 2017 Accenture All rights reserved. 19

20. TO SUCCEED, THE MALAYSIAN ECOSYSTEM
NEEDS WORK AS ONE
PETRONAS and PACs
Provide platform for
collaborative thinking
PETRONAS, PACs,
Service Sector
Utilise existing infrastructure
Labs/ Incubators;
Universities
Develop concepts/ pilots
Govt. bodies/
agencies
Provide incentives, facilitate
partnerships
Service Sector
Develop Proof-of-Concept
PETRONAS
Provide collective feedback on
concepts
Service Sector
Implement and roll-out digital
and technology applications
MOGSC / MPRC
Enable expansion of service
sector
Service Sector
Bring in new/ proven ideas
Financial Institutions
Provide credit support
PETRONAS
Accelerate value realization
Private Equity/ VCs
Promote equitable,
participation of service sector
Source: ASE Analysis
IDEATION
PROOF-OF-
CONCEPT
OPERATE AND
SUSTAIN
CONCEPT
DEVELOPMENT
SCALE
PETRONAS
Provide stewardship on large
scale disruption
Copyright © 2017 Accenture All rights reserved. 20