PTP Effectiveness for Sustainable Growth

SPE Thailand Dinner Talk

26th March 2008

High Oil PricesOil Prices

Reference

Low Price

High Price

Actual

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

2005 $/bbl

Source: International Energy Outlook 2007 – EIA DOE

Global Rig Count

Foreign

Canada

U.S.

0

1000

2000

3000

4000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: Baker Hughes Rig Count as of February 2008

+75% in 5 Yrs

0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009 2010

Demand as per 2005 Benchmark Demand as per 2007 Benchmark

E E E EE E E E

*Petrotechnical Professionals = Geologists, Geophysicists & Petroleum Engineers**China excluded, Service companies excluded

Recruitment targets for Petrotechnical Professionals

Global Demand for Petrotechnical Professionals *Comparison between Recruitment targets of G&G and PE 2005-2010**

Source: 2005 and 2007 Schlumberger Business Consulting O&G HR Benchmark

Competition for top universities remains fierce

Source: 2007 Schlumberger Business Consulting O&G HR Benchmark

* 85 universities selected by Schlumberger worldwide (China excluded) **Schlumberger estimates: 60% of Geosciences graduates enter E&P industry, 40% enter other industries;

80% of Petroleum Engineering graduates enter E&P industry, 20% enter other industries

Geosciences Top University*Supply vs. Demand 2006-2010

Petroleum Engineers Top University*Supply vs. Demand 2006-2010

Demand for Geologists &GeophysicistsSupply of G&G from “Schlumberger 85 universities”Net Supply of G&G (60% entering E&P Industry)

0

2,000

4,000

6,000

8,000

10,000

2006 2007E 2008E 2009E 2010E

Actually entering E&P**

0

2,000

4,000

6,000

8,000

10,000

2006 2007E 2008E 2009E 2010E

Demand for Petroleum EngineersSupply of PE from “Schlumberger 85 universities”Net Supply of PE (80% entering E&P Industry)

Actually entering E&P**

A Big Crew ChangeAge Profiles of Two Different E&P Companies

0%

5%

10%

15%

20%

25%

30%

35%

20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 60

Age Ranges

Per

cen

t o

f P

op

ula

tio

n

A Young CompanyA Young Company

A Mature CompanyA Mature Company

Creating Expertise Tension

New Project DifficultiesNew Project Difficulties

Available ExperiencesAvailable Experiences

“Price War” for PTP

SalarySalary

InflationInflation < 50%< 50%

> 100%> 100%

During Past 10 YearsDuring Past 10 YearsFor New GraduatesFor New Graduates

Insufficient Experience Growth

Time

Growth

PTP NumberPTP Number

PTP ExperiencePTP Experience

Seeking Sustainable Growth

Maximize ProductivityMaximize Productivityof Experiencedof Experienced

Expedite DevelopmentExpedite Developmentof New Recruitsof New Recruits

Optimize Deployment Optimize Deployment & Sharing& Sharing

Maximize Productivity

Technology to Increase ProductivityTechnology to Increase Productivity Work ProcessesWork Processes

Workplace EnvironmentWorkplace Environment KM – Community of PracticeKM – Community of Practice

Expedite Development

KM – Knowledge TransferKM – Knowledge TransferStructured Training ProgramsStructured Training ProgramsDevelopment AssignmentsDevelopment Assignments

Mentoring / CoachingMentoring / Coaching

Accelerated Development

Optimize Deployment

Expertise InventoriesExpertise InventoriesPriority ProjectsPriority Projects

Growth vs. Producing AssetsGrowth vs. Producing AssetsRestructuring for SynergyRestructuring for Synergy

Outsourcing WorkOutsourcing WorkMentoring Role for RetireesMentoring Role for Retirees

Finally, Industry in a Bubble?

• New Expertise Not Realized Until Future

• Escalation of PTP Costs

• Huge Investments for Uncertain Future?

• Will We Have Too Many PTP?

• Will We Reach a Saturation Point?

• Contingency for Industry’s Downturn?

THANK YOUTHANK YOU