Introducing Subsea ConnectNeil Saunders

President & CEO, Oilfield Equipment, BHGE

SUBSEA CONNECT

Global offshore capital investment projected to grow at a CAGR of 16% with Deepwater leading the growth

2

343

180164

173

200

242

0

100

200

300

400

’16

282

’18

215

’14 ’15 ’17 ’20’19 ’21

-47%+16%

Global offshore (E&P CAPEX)1 ’14-’21

($B)

3Yr CAGR : High : 18% | Base : 16% | Low : 1%

Offshore greenfield capex in 2018 expected to be $94B

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)

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Change makers

3

Low-carbon

transition

Digital

transformation

Game

changing

technology

Integrated

perspective

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SUBSEA CONNECT

Breakeven costs have come down.

Development costs for subsea projects have fallen 29% since 2015.

4

73

52

2015 2018

-29%

Source: analysis covering the same 3 major greenfield subsea

projects over time using data from Rystad Energy

Average breakeven prices ($/bbl)

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We believe there is more to do.

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Reducing the economic development point of unsanctioned projects by 30% unlocks 16B bbls of reserves

Source : Rystad Ucube (October 2018), Brent oil price at $75

Unsanctioned subsea projects 2018

Asset break even price bands

Re

sou

rce

s B

illio

n b

bl.

10

4

18

7

21

33

1

5

0

5

10

15

20

25

30

35

Resource Segmentation @ CurrentBEP

Resource Segmentation @30% BEPReduction

>$75 $50 <= x <= $75

$25 <= x <= $50 $10 <= x <= $25

12B bbl.

4B bbl.

6

Introducing Subsea Connect

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Subsea Connect

8

Reduces the

economic

development point by

an average of

30%

Influences

80% of project

development costs

and value drivers

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SUBSEA CONNECT

This is Subsea Connect

9

Digital

enablement

Flexible

partnerships

and commercial

models

Project

Connect

Reservoir to

topsides

technology

solutions

SUBSEA CONNECT

Radically optimized.

Outcome engineered.

Life-of-field solutions.

10SUBSEA CONNECT

Project ConnectReinventing how projects are planned and executed

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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

12SUBSEA CONNECT

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v

13

Project Connect

Key features

• Economic outcome

assessment

• Parallel tracks to compress

“assess” phase

• ‘All hands’ dedicated project

teams

• Independent project

management ability

• Technology system

configuration and project

integration

• Flexible partners and

solutions for the project’s

needs

Benefits

• Execution

certainty

embedded

• Collaborative and

common purpose

• Speed—get to FID

faster

• Improved

schedule

RESERVOIR & SUBSURFACE

LEAN WELL CONSTRUCTION

TOPSIDES

PROJECTCONNECT

SPS & SURF

BHGE credentials

• Early Engagement

starting at concept

evaluation

• Built-in capability:

Gaffney Cline &

Associates, io oil and

gas consulting

• Unparalleled expertise

in reservoir modelling,

planning, project

feasibility, conceptual

design, environmental

advisory, and asset

late life opportunities

• Fullstream technology

capability

SUBSEA CONNECT

Subsea Connect transforms uneconomic North Sea asset3 well subsea tie back

CASE STUDY

IRR improved

3x FID-enabled

NPV improved

2xFirst oil accelerated

30%Development

economic

14

Co

nn

ect p

re-

fee

d e

stima

tes

Drillin

g

SP

S

SU

RF

To

psid

e m

od

ificatio

n

Ow

ne

rs costs

Clie

nt su

bse

a d

eve

lop

me

nt

We

lld

esig

n

Co

nso

rtium

syne

rgy

Su

bse

a o

ptim

izatio

n

Co

nn

ect in

itial

estim

ate

Co

st certa

inty

Op

timize

d

insta

llatio

n

Pro

cure

me

nt

strate

gy

De

sign

—sta

nd

ard

izatio

n

Bro

wn

field

m

od

ificatio

n

SUBSEA CONNECT DELIVERS

50%COST

REDUCTION

Pro

ject

de

velo

pm

en

t co

sts

Impact of Subsea Connect on materially lowering the economic development point

Key factors impacting economic development point

Independent assessment process

identifies opportunities for improvement

• Project stalled since 2015 due to poor economics

• CAPEX reduction 50%

• BHGE and io Oil and Gas apply Subsea

Connect independent assessment and Project

Connect workflow, to identify project

improvements—40% cost reduction

• Total Scope and Execution—line of sight to

further 10% cost improvement identified

through execution process

• Assessment showed earlier FID could be enabled

CAPEX reduction

50%

Reservoir to topsidesTechnology solutions for the life of the field

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BHGE Fullstream capability

16

Topside

optimization

AptaraTM

TOTEX-lite

subsea

system

Lean well

construction

Reservoir

optimization

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SUBSEA CONNECT

Reservoir optimization

Reservoir insights and optimization to enhance drainage and recovery over the life of the field.

17SUBSEA CONNECT

• Over 400 geoscientists across upstream business

• Proven results Globally deployable field teamsIncreased recovery factorExtended asset life

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Aptara™ TOTEX-lite subsea system

Delivers up to 50% lower total cost of ownership.Life-of-field design brings increased flexibility

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• Modular and structured portfolio

• Compact and up to 50% lighter

• 30% lower lead times

• Simpler and easier installation, operation, and maintenance

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Lean well construction

Drilling to the technical limit; integrated with the rig to reduce well construction costs significantly.

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• Accelerated drilling campaigns

• Advanced drilling systems with

Autotrak™ technology

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Topside optimization

Debottlenecking, gas handling, and power solutions to extend asset life• Over 1,400 units upgraded

• Asset life extension

• Emissions reduction and control

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Flexible partnerships and commercial models

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✓ Portfolio evaluation

✓ Exploration and planning

support

✓ Concept—FEED

✓ SPS-SURF

✓ Pipelay and construction

vessels

✓ Unique commercial models

Stakeholder

man.

Economics

SU

RF

TECHNICAL

BHGE+

PARTNERS

22SUBSEA CONNECT

Digital enablement

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Field planning &

optimization

Production enhancement

Asset performance management

24SUBSEA CONNECT

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SEGMENT CATEGORYSEGMENT CATEGORY 16 pt BOLD, ALL CAPS

25

Welcome to engageSubsea.

Setting new

standards in Digital

asset life cycle

management

The next era of operations

optimization and predictive

maintenance

engageSubsea

Plan

Wing to wing offshore

planning and OEM Assets

Live on-the-job execution

visibility

Optimizing performance

remotely

Pill

ars

PerformExecute

20% Reduction in maintenance cost | 5% reduction in downtime

SUBSEA CONNECT

This is Subsea Connect

26

Digital

enablement

Flexible

partnerships

and commercial

models

Project

Connect

Reservoir to

topsides

technology

solutions

SUBSEA CONNECT

Radically optimized. Outcome engineered. Life-of-field solutions.