Oil & Gas UK Share Fair

Transcription

1 Oil & Gas UK Share Fair Nexen Petroleum UK Limited November 2017

2 Safety and Fire Information

3 Forward Looking Statements Certain statements in this presentation constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements regarding expected future events, business prospects or financial results. The words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify such forward-looking statements. These statements are based on assumptions and analyses made by Nexen Energy ULC ( Nexen ), a wholly owned subsidiary of CNOOC Limited (the Company, NYSE: CEO, SEHK: 00883, TSX: CNU) in light of its or their experience and perception of historical trends, current conditions and expected future developments, as well as other factors that Nexen or the Company believes reasonable under the circumstances. However, whether actual results and developments will meet Nexen s or the Company s expectations and predictions depends on a number of risks and uncertainties which could cause the actual results, performance and financial conditions to differ materially from the Company s expectations, including those associated with fluctuations in crude oil and natural gas prices, the exploration or development activities, the capital expenditure requirements, the business strategy, whether the transactions entered into by Nexen or the Company can be completed on schedule pursuant to its timetable or at all, the highly competitive nature of the oil and natural gas industries, the foreign operations, environmental liabilities and compliance requirements, and economic and political conditions in the People s Republic of China and overseas. For a description of these and other risks and uncertainties, please see the documents the Company has filed from time to time with the United States Securities and Exchange Commission, including 2016 Annual Report on Form 20-F filed on April 21,

4 Agenda No Agenda Item 1 CNOOC International Operations 2 Nexen Operations Overview 3 Business & Supply Chain Themes 4 Nexen Operations Contracts 5 Nexen Project Contracts 6 Nexen Drilling Contracts 7 Nexen Exploration & Appraisal 8 Contracts & Procurement in Nexen 9 Questions

5 CNOOC International Operations

6 CNOOC International Operations 6

7 Nexen Operations Overview

8 Existing Assets UK Operated Assets Buzzard UK s highest producing field largest discovery since 1990 Located about 57 km northeast of Aberdeen First oil 2007 STaR (Scott, Telford & Rochelle) Golden Eagle First oil 1993, additional production from Telford and Rochelle through tiebacks Located around 188 km northeast of Aberdeen Largest UK discovery since Buzzard Located about 70 km north-east of Aberdeen First oil October 2014

9 Aspiration

10 Culture

11 Key Results

12 Business & Supply Chain Themes

13 Focus Maximising value of our existing portfolio & extending field life Focused business unit organisation Production efficiency Sustainable cost management Near field exploitation & incremental development Sustaining safety performance Creating new growth opportunities CNS Shetland Basin Ireland Africa Seeking innovation to change established ways of working with our contractors Working collaboratively with the supply chain to explore alternative contracting approaches Longer term contracts based on a joint commitment to continuous performance improvement Fully committed to MER from UKCS

14 Operations Contracts

15 Operations Contracts Majority of operations / maintenance contracts under long term arrangements beyond 2018 Tendering is not the default position as each service is reviewed on its own merits based on internal drivers, goals and objectives Innovations available from the Supply Chain, e.g. use of mobile technology, nonintrusive inspection, optimised repair & maintenance practices aligned to asset lifespan can be reasons for a strategy review Working collaboratively with our contractors to improve efficiency in work execution Engagement with key contractors to develop KPIs aligned to Nexen s key results

16 Project Contracts

17 Project Contracts Buzzard Phase II Currently within Define Selected concept is a subsea tie-back development approximately 5km NE of Buzzard consisting of an 11 slot combined production/water injection manifold Topsides and subsea solutions have been progressed through Front End Engineering Design Tenders received for Trees & Controls under evaluation (On Hold) Tenders to be issued for Subsea EPIC, Fabrication, and Transport and Installation. The Define to Execute stage gate is scheduled for Q Buzzard Complex Buzzard showing proposed subsea tie-back

18 Project Contracts Scott Water Injection Pipelines & Umbilicals Pipeline & umbilical replacement project Scott platform to east, south and west WI manifold locations Approximately 10km of replacement pipeline & umbilicals

19 Project Contracts Potential Telford Tie Backs Name Discovery/ Prospect/ Lead Ravel Discovery Dunkeld Prospect Rossini Prospect Bugle South Discovery Cornet Prospect Daffodil Lead Buzzard Complex Buzzard showing proposed subsea tie-back

20 Project Challenges Intelligent pigging Obsolescence and sustainability Infrastructure life extension

21 Drilling Contracts

22 Drilling Contracts Scott Currently on a drilling break for the planned platform shutdown, will return to well ST37. Future infield drilling programme envisaged.

23 Drilling Rig Contracts Semi Subs ITT being evaluated for infill subsea wells on Golden Eagle Contract nearing award Ettrick and Blackbird P&A work in Central North Sea ITT to be issued for Buzzard Phase II Jack Ups Contract nearing award for provision of a HDJU to drill over the Buzzard platform in 2018 ITT to be issued for provision of a HDJU to drill an HP/HT exploration well at Glengorm in 2018

24 Drilling Services Contracts Tenders for drilling services underway/planned as follows: Q Conductor pipe and associated services Wireline (open hole)/cased hole services Riser inspection and repair Q Log witnessing QA/QC services

25 Exploration & Appraisal

26 Exploration & Appraisal UKCS Maturation of various captured acreage prospects West of Shetland & in Central North Sea held acreage Ireland Exploration well planned for summer 2019 (subject to approvals) Other Regions UK organisation supporting wider Nexen exploration plans in West Africa

27 Ireland Exploration License LO 16/7 Porcupine Basin awarded following 2015 Atlantic Margin Licensing Round Geological assessment complete and Iolar prospect deemed drill worthy Approximately 215km offshore in 2000m water depth Exploration well planned for summer 2019 Well site geophysical survey concluded Anticipated that a drillship will be used for drilling (predicted duration days) Other contracts include Logistics & Shore Base, Aviation, PSV and ERRV Services

28 Contracts & Procurement in Nexen

29 Our expectations of our Contractors We seek maximum value from all of our supply chain relationships Value is assessed in considering safety, innovation, collaboration, performance & price Preference for stable long term contracts, subject to measurable year-on-year performance improvement Joint commitment to an open, collaborative approach to contract management & to relevant contract KPI s Contractor return should be linked to overall Nexen business performance wherever possible Business integrity is critical to us and we expect our contractors and their personnel to support our Cultural Beliefs at all times Joint commitment to the Supply Chain Code of Practice

30 Contacts & Future Contracts Operations & Maintenance Hose and Small Bore Tubing Management Services Q Ian Anderson Chemical Management Services Q Norman Milton Subsurface Provision of Geophysical, Geological Services and Wellsite Operations Q Maria Louca

31 Contacts & Future Contracts Drilling & Completions Provision and Operation of a Semi- Submersible Drilling Unit (Buzzard) Provision and Operation of a HDJU Drilling Unit (Glengorm) Q Lynne Bremner lynne.bremner@nexencnoocltd.com Q Angus Greenhorn angus.greenhorn@nexencnoocltd.com Provision of Cased Hole Services Q David Main david.main@nexencnoocltd.com Provision of Wireline (Open Hole) Services Q David Main david.main@nexencnoocltd.com Provision of Conductor Pipe and Associated Services Provision of Riser Inspection & Repair Services Q Angus Greenhorn angus.greenhorn@nexencnoocltd.com Q David Main david.main@nexencnoocltd.com Log witnessing QA/QC services Q David Main david.main@nexencnoocltd.com

32 Contacts & Future Contracts Logistics Provision of ERRV (12 month campaign, to commence March 2018) Provision of ERRV (two wells c. 180 days, to commence June 2018) Provision of ERRV (single well c. 120 days, to commence May 2018) Provision of a PSV (12 month campaign, to commence March 2018) Provision of PSV (two wells c. 180 days, to commence June 2018) Provision of PSV (single well c. 120 days, to commence May 2018) Q Elaine Skene elaine.skene@nexencnoocltd.com Q Elaine Skene elaine.skene@nexencnoocltd.com Q Elaine Skene elaine.skene@nexencnoocltd.com Q Elaine Skene elaine.skene@nexencnoocltd.com Q Elaine Skene elaine.skene@nexencnoocltd.com Q Elaine Skene elaine.skene@nexencnoocltd.com

33 Contacts & Future Contracts Technical Services (Subsea Operations, Brownfield Projects & Engineering) Scott Water Injection Pipelines (Procurement/Installation) Q Charlene Leppard Telford A+B line Flexible Installation and reconfiguration (Procurement/Installation) Buzzard Phase 2 Subsea Engineering, Procurement Installation and Construction Q Jennifer Rennie jennifer.rennie@nexencnoocltd.com Q Euan Duncan euan.duncan@nexencnoocltd.com Buzzard Phase 2 Provision of Transport and Installation Q Euan Duncan euan.duncan@nexencnoocltd.com Specialist Engineering Consultancy Contracts Q Jennifer Rennie jennifer.rennie@nexencnoocltd.com

34 Industry Engagement We are a user of FPAL, including FPAL Verify FPAL is our starting point in identifying potential suppliers We actively promote & welcome two-way FPAL feedback We contribute to several Oil & Gas UK pan-industry initiatives Supply Chain Forum LOGIC Standard Contracts Work Group Tender Efficiency Work Group Cost Sustainability Work Group PILOT Share Fair We are committed to the Supply Chain Code of Practice As a member of the code of practice review group With a gold compliance rating for the last three years

35 Contacts Mark Masson Snr Contracts & Procurement Manager Lynne Bremner Team Lead - Contracts (Drilling & Completions / Business Delivery) Charlene Leppard Charlene.Leppard@nexencnoocltd.com Team Lead Contracts (O&M / Technical Services) Nicky Jervis Nicky.Jervis@nexencnoocltd.com Team Lead Contracts (Subsurface and Business Services) Calder Scott Calder.Scott@nexencnoocltd.com Procurement Team Lead

36 Further Information www. twitter.com/nexenenergy See photos of our operations, how we invest in our communities and how we are a responsible energy developer. Nexen is hiring! Learn about Nexen, the communities we invest in and what makes us an employer of choice. Follow us on Twitter! Reproduced with permission of Yahoo! Inc. FLICKR & the Flickr logo are registered trademarks of Yahoo! Inc. YouTube is a Google Brand Feature which is a trademark or distinctive brand feature of Google Inc.

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