“Defining eBusiness Success”Dave ClementzDave Clementz

ChevronTexaco Information ChevronTexaco Information Technology CompanyTechnology Company

Presented by Ray CasserlyPresented by Ray CasserlyChevronTexaco Latin America Business UnitChevronTexaco Latin America Business Unit

18th World Energy Congress

Buenos Aires, October 2001

West Texas Intermediate Crude Price

1981

40

30

20

10

0‘83 ‘85 ‘87 ‘89 ‘91 ‘93 ‘95 ‘97 ‘99 2001

Average Monthly $/BBL

Survival and RebirthA major 1996 study by Cambridge Energy Research A major 1996 study by Cambridge Energy Research credited Information Technology for the "survival credited Information Technology for the "survival and rebirth" of the petroleum sector during a and rebirth" of the petroleum sector during a decade of flat oil prices. decade of flat oil prices.

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The Fortune 100 U.S. Oil & Gas CompaniesThe Fortune 100 U.S. Oil & Gas Companies(listed in order of revenue)(listed in order of revenue)

19731973 ExxonExxon MobilMobil TexacoTexaco GulfGulf ChevronChevron AmocoAmoco ArcoArco TennecoTenneco PhillipsPhillips OccidentalOccidental UnocalUnocal SunSun SohioSohio GettyGetty

20002000 Exxon/MobilExxon/Mobil TexacoTexaco ChevronChevron PhillipsPhillips

The Fortune 100 U.S. Oil & Gas CompaniesThe Fortune 100 U.S. Oil & Gas Companies(listed in order of revenue)(listed in order of revenue)

19731973 ExxonExxon MobilMobil TexacoTexaco GulfGulf ChevronChevron AmocoAmoco ArcoArco TennecoTenneco PhillipsPhillips OccidentalOccidental UnocalUnocal SunSun SohioSohio GettyGetty

20002000 Exxon/MobilExxon/Mobil EnronEnron TexacoTexaco Duke EnergyDuke Energy ChevronChevron ConocoConoco DynegyDynegy Reliant EnergyReliant Energy El PasoEl Paso PhillipsPhillips

Customers and Customers and MarketsMarkets

Ship

Distribute

Develop

Explore

The new economy for energy:molecules and bytes

Produce

Market

Information

Refine / Blend

Store / Pipe

Suppliers and Suppliers and PartnersPartners

• Lower costsLower costs• Shorter cycle timesShorter cycle times• Better decisionsBetter decisions• New relationshipsNew relationships• New sources of business growthNew sources of business growth

Digital business models:The e-business value proposition

New ways of transacting New ways of transacting businessbusiness

New ways and forms of New ways and forms of information sharinginformation sharing

New ways of collaboratingNew ways of collaborating

Tightly link suppliers, Tightly link suppliers, customers, and partners customers, and partners to the business to the business

Net-enabled Net-enabled Infrastructure and Infrastructure and

Process ImprovementProcess Improvement

Net-enabled Net-enabled Partner Partner

RelationshipsRelationships

NetNet IntermediariesIntermediaries

Increase speed and Increase speed and lower costslower costs

InternetInternet marketplacesmarketplaces

The e-business transformation process is multi-tiered and complex

Defining Success: Participate to learn; adapt quickly; net-enable infrastructure and processes; keep going

Lessons from the e-business road . . . B2B is complexB2B is complex B2B requires large investmentsB2B requires large investments e-business models e-business models

continuously evolve and may continuously evolve and may not be stablenot be stable

Infrastructure and business Infrastructure and business integration are criticalintegration are critical

Cultural factors make a Cultural factors make a differencedifference

Economic Economic ModelModel

Reserves Reserves ModelModel

Dynamic Dynamic Simulation Simulation

ModelModelEarth Earth

ModelModelField Field

Operations Operations ModelModel

Strategic Strategic DecisionsDecisions

Operating Operating DecisionsDecisions

Knowledge Knowledge SharingSharing

Decision ToolsDecision Tools

Integrated Data Management EnvironmentIntegrated Data Management Environment

Modeling & Predictive ToolsModeling & Predictive Tools

Seismic - Subsurface - Well Construction - Facilities - Production Seismic - Subsurface - Well Construction - Facilities - Production

The oil field of the future builds off the technology convergence

Chips inObjects

Chips inComputers

6 billion

1970 1997 2002

“measure everything / observe everything / broadcast everything / connect everyone”

Digital tidal wave

Pervasive intelligent Pervasive intelligent objects and sensorsobjects and sensors

Radical increases in Radical increases in sensing capabilities sensing capabilities

Global connectivityGlobal connectivity

B2B Is Here to Stay