Introducing Subsea Connect Neil Saunders President & CEO, Oilfield Equipment, BHGE
Global offshore (E&P CAPEX) 1 ’14 - ’21 ($B) 400 Global offshore capital 343 investment projected 282 300 -47% +16% 242 to grow at a CAGR of 215 200 200 16% with Deepwater 180 173 164 leading the growth 100 Offshore greenfield capex in 2018 expected to be $94B 0 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 3Yr CAGR : High : 18% | Base : 16% | Low : 1% BHGE analysis based on Rystad UCube – August 2018; Upstream Spend based on Rystad Brent Price assumptions: 2018 = 75 $/bbl., 2019 = 79 $/bbl., 2020 = 79 $/bbl., 2021 = 77 $/bbl. ; IHS Markit Upstream Spend report (August, 2018) SUBSEA CONNECT 2
Change makers Game Integrated Digital Low-carbon changing perspective transformation transition technology SUBSEA CONNECT SUBSEA CONNECT 3
Average breakeven prices ($/bbl) Breakeven costs have -29% come down. 73 Development costs for 52 subsea projects have fallen 29% since 2015. 2015 2018 Source: analysis covering the same 3 major greenfield subsea projects over time using data from Rystad Energy SUBSEA CONNECT 4
We believe there is more to do. SUBSEA CONNECT
Unsanctioned subsea projects 2018 35 33 Reducing the 30 12B bbl. economic 25 Resources Billion bbl. 21 development point of 20 18 unsanctioned projects 15 by 30% unlocks 16B 10 10 bbls of reserves 7 5 4 5 1 4B bbl. 0 Resource Segmentation @ Current Resource Segmentation @30% BEP BEP Reduction >$75 $50 <= x <= $75 Asset break even $25 <= x <= $50 $10 <= x <= $25 price bands Source : Rystad Ucube (October 2018), Brent oil price at $75 SUBSEA CONNECT 6
Introducing Subsea Connect
Subsea Connect Influences 80% of project development costs and value drivers 30% Reduces the economic development point by an average of SUBSEA CONNECT SUBSEA CONNECT 8
This is Subsea Connect Reservoir to Flexible Project Digital topsides partnerships Connect enablement technology and commercial solutions models SUBSEA CONNECT 9
Radically optimized. Outcome engineered. Life-of-field solutions. SUBSEA CONNECT SUBSEA CONNECT 10
Project Connect Reinventing how projects are planned and executed
Fewer than 25% of oil and gas projects were delivered on time, averaging 10 months’ delay. Projects delivered were on average around 35% over budget Source: UK Oil and Gas Authority SUBSEA CONNECT SUBSEA CONNECT 12
Project Connect Key features Benefits BHGE credentials RESERVOIR & • Economic outcome • Execution • Early Engagement SUBSURFACE assessment certainty starting at concept embedded evaluation • Parallel tracks to compress “assess” phase • Collaborative and • Built-in capability: common purpose Gaffney Cline & • ‘All hands’ dedicated project Associates, io oil and teams • Speed — get to FID PROJECT gas consulting v SPS & LEAN WELL faster • Independent project SURF CONNECT CONSTRUCTION • Unparalleled expertise management ability • Improved in reservoir modelling, schedule • Technology system planning, project configuration and project feasibility, conceptual integration design, environmental advisory, and asset • Flexible partners and TOPSIDES late life opportunities solutions for the project’s needs • Fullstream technology capability SUBSEA CONNECT 13
CASE STUDY Subsea Connect Impact of Subsea Connect on materially lowering the economic development point transforms SUBSEA Client subsea development CONNECT uneconomic North DELIVERS Owners costs Topside modification 50% Well design COST Consortium synergy Sea asset REDUCTION Subsea optimization Project development costs SURF estimate Connect initial standardization Design — Cost certainty installation Optimized 3 well subsea tie back strategy Procurement feed estimates Connect pre- modification Brownfield SPS Drilling Independent assessment process identifies opportunities for improvement • Project stalled since 2015 due to poor economics Key factors impacting economic development point • CAPEX reduction 50% • BHGE and io Oil and Gas apply Subsea Connect independent assessment and Project CAPEX reduction IRR improved Connect workflow, to identify project FID -enabled 50% 3x improvements — 40% cost reduction • Total Scope and Execution — line of sight to further 10% cost improvement identified Development NPV improved through execution process First oil accelerated economic 2x 30% • Assessment showed earlier FID could be enabled SUBSEA CONNECT 14
Reservoir to topsides Technology solutions for the life of the field
BHGE Fullstream capability Aptara TM Reservoir Lean well TOTEX-lite Topside optimization construction subsea optimization system SUBSEA CONNECT SUBSEA CONNECT 16
Reservoir optimization Reservoir insights and optimization to enhance drainage and recovery over the life of the field. • Over 400 geoscientists across upstream business • Proven results Globally deployable field teams Increased recovery factor Extended asset life SUBSEA CONNECT SUBSEA CONNECT 17
Aptara ™ TOTEX -lite subsea system Delivers up to 50% lower total cost of ownership. Life-of-field design brings increased flexibility • Modular and structured portfolio • Compact and up to 50% lighter • 30% lower lead times • Simpler and easier installation, operation, and maintenance SUBSEA CONNECT SUBSEA CONNECT 18
Lean well construction Drilling to the technical limit; integrated with the rig to reduce well construction costs significantly. • Accelerated drilling campaigns • Advanced drilling systems with Autotrak ™ technology SUBSEA CONNECT SUBSEA CONNECT 19
Topside optimization Debottlenecking, gas handling, and power solutions to extend asset life • Over 1,400 units upgraded • Asset life extension • Emissions reduction and control SUBSEA CONNECT SUBSEA CONNECT 20
Flexible partnerships and commercial models
✓ Portfolio evaluation ✓ Exploration and planning support BHGE + Economics Stakeholder ✓ Concept — FEED PARTNERS man. ✓ SPS-SURF ✓ Pipelay and construction TECHNICAL vessels ✓ Unique commercial models SURF SUBSEA CONNECT SUBSEA CONNECT 22
Digital enablement
Asset Field planning Production performance & enhancement management optimization SUBSEA CONNECT SUBSEA CONNECT 24
SEGMENT CATEGORY 16 pt BOLD, ALL CAPS SEGMENT CATEGORY Welcome to engageSubsea. Setting new standards in Digital engageSubsea asset life cycle management Pillars Plan Execute Perform The next era of operations optimization and predictive maintenance Wing to wing offshore Live on-the-job execution Optimizing performance planning and OEM Assets visibility remotely 20% Reduction in maintenance cost | 5% reduction in downtime SUBSEA CONNECT 25
This is Subsea Connect Reservoir to Flexible Project Digital topsides partnerships Connect enablement technology and commercial solutions models SUBSEA CONNECT 26
Radically optimized. Outcome engineered. Life-of-field solutions. SUBSEA CONNECT
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