SPE Workshop: Petroleum Economics - Managing Global Market Realities through Improvement of Values in an Era of Oil Price Volatility

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1 Petroleum Economics - Managing Global Market Realities through To find out more about group registrations, please contact us at spekl@spe.org TECHNICAL PROGRAMME COMMITTEE CHAIRPERSONS Abdul Jalil Zainul Head Petroleum Economic Malaysia Petroleum Management PETRONAS Azlan Kassim Global Consulting Manager Petroleum Economics MEMBERS Cesc Batlle VP Operations APAC 3esi-Enersight Rozaida Affendi Commercial and Economics Analyst ExxonMobil Malaysia Exploration and Production Inc. Who Should Attend This workshop is designed for Directors, Managers, Decision Makers, Engineers and Professionals involved in: Economics Petroleum Resources / Management Business Units Portfolio / Project Assets Operations Corporate / Strategic Planning Business Regulation Surface and Subsurface Engineering Geoscience Business Analysis Dewi Sri Redjeki Senior Advisor Gaffney, Cline & Associates Nicholas Antoniou Consultant Hiroshi Okabe Director, Planning Division, Business Strategy Department JOGMEC Lyrna Esmeralda-Hewitt Principal Petroleum Economist Energy, Consultancy Lloyd's Register Rajib Sen Director Asia Pacific Palantir Solutions Darwis Husain Custodian, Petroleum Economic PETRONAS Carigali Sdn. Bhd. Eva Fadlila Planning, Performance & Evaluation Manager PT Pertamina Internasional Exploration & Production Mada Vibrary Commercial & Planning Analyst PT Pertamina Hulu Energi WMO Azrin Kassim Petroleum Economics Team Lead Yosef Parlindungan Sitompul Senior Petroleum Economist / Merak Team Leader WORKSHOP ADVISOR Robin Simpson CEO and Managing Director Roc Oil Company Limited SPE Asia Pacific Regional Advisory Committee Member The decline in oil and gas prices has placed a huge strain on cash flows across the upstream industry. As a result, greater focus is required on economic evaluation of new opportunities as well as on re-assessing the viability of existing projects or assets. This requires great understanding of input uncertainty so that tough portfolio decisions can be made. Considering this volatile business environment, it is critical that project economics are analysed more rigorously and key project challenges are identified earlier in the process. Opportunities that have the ability to scale up or down as a function of this oil price volatility have implicit value, which needs to be quantified and communicated. Our industry needs to become more efficient and increase speed and learning from iterations, whilst improving the quality of the investment decisions. Periods of lower oil prices provide a compelling reason to examine areas of improvement that can or otherwise be overlooked. The 2 nd SPE Petroleum Economics workshop within the Asia Pacific region provides a platform for knowledge sharing in the area of petroleum economics and investment analysis. The workshop provides a great opportunity for speakers to discuss current topics, share experience based on latest case studies, best practices and participate in informal debate amongst the participants. In addition, the workshop will provide an excellent opportunity for participants to network with fellow peers and exchange ideas on recent industry trends and global geopolitical challenges. The workshop topics will focus on the latest economic valuation best practices, risk assessment techniques, asset life cycle optimisation tools, cost reduction methods, integrated planning, portfolio management ideas as well as global economic trends. Participants will have the opportunity to understand key drivers in decision quality, effective fiscal terms and evolution of petroleum arrangements that are continuously required to attract investment to explore, develop, and monetise the petroleum resources. Session Highlights A platform to share and discuss a series of key emerging issues, challenges, approaches and techniques to the treatment of petroleum economics that includes: Global market realities Risk and uncertainties Decision quality Portfolio review and analysis Project evaluation Fiscal regimes

2 Why You Should Attend 30 expert -led technical discussion topics hours of knowledge sharing hours of peer-to-peer 20+ and technical discussions 10+ networking opportunities Workshop Objectives This workshop aims to provide a platform to discuss and share ideas in the domain of petroleum economics for a wide range of industry professionals including practitioners of economics, corporate business planning, decision making, regulation, legal, geosciences, engineering, and external consulting. It will address the existing and emerging practices of valuation techniques and approaches that are used during the process of conducting a wide range of petroleum economic assessments and taking related decisions during a period of low oil price to make an investment opportunity viable. Preliminary Workshop Schedule TUESDAY, 18 APRIL Arrival of Delegates Safety Briefing by Hotel Security Manager Session 1: Welcome, Introduction and Keynote Address Co-chairpersons: Abdul Jalil Zainul, PETRONAS Azlan Kassim, Group Photo/ Coffee and Tea Break Session 2: Macroeconomic Outlook in Current Low Oil Price Session Managers: Lyrna Esmeralda-Hewitt, Lloyd s Register; Yosef Parlindungan Sitompul, As we are increasingly called upon to make decisions with limited information in an environment rife with political unrest and the ensuing changes in government policies, the oil and gas industry must continue to evolve and ensure sustainability in growth and relevance to world economics. This session will provide a forum for presentations and debate on where the world economy is headed, the evolving roles of OPEC, US, Russia and China in the global energy markets, and strategies of oil and gas companies. To provide insights to existing and future challenges of stakeholders in governments, NOCs, IOCs, and service companies, among others Networking Luncheon Session 3: Risk and Uncertainty Session Managers: Hiroshi Okabe, JOGMEC; Darwis Hussain, PETRONAS Carigali Sdn. Bhd.; Nicholas Antoniou, Consultant Uncertainty has always been a hallmark of the oil and gas industry. There are uncertainties in the subsurface parameters such as production profiles and/or surface parameters such as facilities design and costs. Decline in oil prices has placed a huge strain on cash flows across the upstream industry and decision makers are faced with tough choices of whether to invest now, to defer later or to a certain extent should they remain status quo. Whether the decision is to maintain existing assets or acquiring new assets, it requires extensive technical understanding in the subsurface and surface uncertainties and their associated risks. As each parameter has its own risks, detailed and rigorous economic assessment, including the discount rate, is paramount. This session will focus on ways and means to make better investment decisions with uncertainties and risks. Session topics and case studies will include sharing of latest economic valuation best practices and innovative ways and means on addressing or de-risking uncertainties Coffee and Tea Break Session 4: Exploration Economics Session Managers: Lyrna Esmeralda-Hewitt, Lloyd s Register; Rajib Sen, Palantir Solutions; Dewi Sri Redjeki, Gaffney, Cline & Associates The oil and gas industry continues to evolve along with a low price environment, with shifts in strategies towards value and cash flow in order to survive. The role of economics in oil and gas, again has been made apparent, under this challenging condition. This session will focus on best practice approaches to exploration economics including project screening and ranking of exploration opportunities, estimating exploration and production costs, economic modelling, and the regulatory role of governments in rejuvenating a conducive environment for exploration activities Session 5: Poster Session 1845 onwards Welcome Dinner

3 Preliminary Workshop Schedule WEDNESDAY, 19 APRIL Arrival of Delegates and Registration Session 6: Resource Maturation Session Managers: Hiroshi Okabe, JOGMEC; Rajib Sen, Palantir Solutions The E&P industry is constantly facing oil and gas production depletion and fighting the decline curve is the core of the business. Reserve replacement ratio is one of the key parameters and traditionally, new discovery supports this measure. However, lower-for-longer oil price era will require business to refocus existing assets with improved economic conditions and enhanced recovery as investments to explore new oil and gas fields has become challenging with higher risks. This session explores the roles of economists, such as annual reserves reporting considering matured resources, which would be a basis for finance, and revising and/or proposing financial conditions for economically viable assets Coffee and Tea Break Session 7: Integrated Value Chain and Planning Session Managers: Cesc Batlle, 3esi-Enersight; Rozaida Affendi, ExxonMobil Exploration and Production Malaysia Inc.; Azrin Kasim; The current oil price downturn has forced all operators to explore all possible venues to extract extra efficiency and profits, and value chains have not escaped this scrutiny. For instance, the empirical evidence of these last two years shows that integrated operators have been able to lean on their refining operations to absorb part of the losses in their upstream operations, when the previous industry trend had been towards the shedding of the refining units and an exclusive focus on upstream. This session will provide a forum to debate questions such as: The pros and cons of integrated value chains versus non-integrated value chains (countercyclical balancing vs lack of focus and presumed lower yields) How can value chains be optimised? How to measure the long range contribution of the different links of the value chain to the overall company profitability? Beyond the spontaneous and induced cost reduction efficiencies facilitated by the service companies in these last two years, are there any viable and realistic models of long-term cooperation between operators and service companies to enhance the efficiency of the value chains? Networking Luncheon Session 8: Portfolio Management Session Managers: Cesc Batlle, 3esi-Enersight; Rozaida Affendi, ExxonMobil Exploration and Production Malaysia Inc., Nicholas Antoniou, Consultant In a volatile price environment, many companies in the oil and gas industry manage their risks by having a diverse portfolio encompassing the entire value chain of the industry, covering the upstream, midstream and downstream, be it in operations and/or service. In the current oil price climate, companies with a diverse portfolio will need to rationalise both capital and operational expenditure, while being mindful that being able to respond to price recoveries will be key in maintaining a competitive edge. How do oil and gas companies come up with an optimised expenditure programme while simultaneously plan to be well positioned for the future? This session aims to bring views and lessons learnt by NOCs, IOCs and service providers to lay out a holistic picture on the decisions that are made affecting the near term and long term health of these companies Coffee and Tea Break Session 9: Fiscal Regime Session Managers: Mada Vibrary, PT Pertamina Hulu Energi WMO; Eva Fadlila, PT Pertamina Internasional Exploration & Production; Dewi Sri Redjeki, Gaffney, Cline & Associates Economic analyses are required throughout the life cycle of any oil or gas project and these analyses results will influence management decisions of the projects. With lower oil prices, economic analyses are becoming more crucial, a lot of projects have been put on the shelf as the results are not economically attractive. Therefore, government initiatives in the form of fiscal term improvement or project incentives might be required to encourage oil and gas investments. This session will provide a platform to discuss various kinds of fiscal regimes around the regions and lessons learnt Session 10: Workshop Summary and Closing Remarks Co-chairpersons: Abdul Jalil Zainul, PETRONAS Azlan Kassim, Poster Solicitation & Information All participants are encouraged to prepare a poster for the Workshop. Presentations on both research and field experience are welcomed. Posters, including unconfirmed/partial results, are to be presented at an assigned time and are open for discussion. Posters will be on display for the entire Workshop period. When preparing your poster: Avoid commercialism. No mention of trademarks/product name Poster size should be approximately 0.8m x 1.2m (W x H) or size A0 in portrait layout Identify topic by title, affiliation, address, and phone number Include a brief abstract that summarises the technology to be addressed Make the display as self-explanatory as possible Place the information in sequence: beginning with the main idea or problem, method used, results, etc. (Draw a plan keeping the size and number of illustrations in mind) Keep illustrations simple by using charts, graphs, drawings, and pictures to create interest and visually explain a point Use contrasting colours Use large print for narrative materials. (We suggest a minimum of 24 points or 3 high letters for the title) Note that the Workshop Programme Committee will review all poster abstracts/materials prior to display, and reserves the right to refuse permission to display any poster considered to be commercial in nature. If you are interested to participate, please your proposed topic with a short abstract (between words) to Ellen Chan at echan@spe.org by 17 March The Society of Petroleum Engineers (SPE) is a not-for-profit organisation. Income from this event will be invested back into SPE to support many other Society programmes. When you attend an SPE event, you help provide even more opportunities for industry professionals to enhance their technical and professional competence. Scholarships, certification, the Distinguished Lecturer programmes, and SPE s energy education programmes Energy4me are just a few examples of programmes that are supported by SPE.

4 Documentation: Proceedings will not be published; therefore, formal papers and handouts are not expected from speakers. Work in progress, new ideas, and interesting projects are sought. Note-taking by attendees is encouraged. However, to ensure free and open discussions, no formal records will be kept. Workshop Deliverables: The committee will prepare a full report containing highlights of the Workshop and the report will be circulated to all attendees. PowerPoint presentations will be posted online and provided to attendees after the Workshop. Provision of the materials by Discussion Leaders will signify their permission for SPE to do so. Commercialism: In keeping with the Workshop objectives and the SPE mission, excessive commercialism in posters or presentations is not permitted. Company logos must be limited to the title slide and used only to indicate the affiliation of the presenter. Attendance Certificate: All attendees will receive a Workshop attendance certificate. This certificate will be provided in exchange for a completed Attendee Survey Form. Continuing Education Units: This Workshop qualifies for SPE Continuing Education Units (CEU) at the rate of 0.1 CEU per hour of the Workshop. Travel/Visa: Attendees are advised to book their airline tickets early. All travellers must be in possession of passports valid for at least six (6) months with proof of onward passage. Contact your local travel agent for information on visa requirements. Dress Code: Business casual clothing is recommended. The Workshop atmosphere is informal. GENERAL INFORMATION Registration Fee: Registration fee ONLY includes all workshop sessions, coffee breaks and luncheons for the registrant. Accommodation is NOT included. SPE will provide details of recommended hotels upon receipt of your registration. Registration Policy: Registration fee MUST be paid in advance for attending the Workshop. Full fixed fee is charged regardless of the length of time the registrant attends the Workshop, and cannot be prorated or reduced for anyone. Attention s Join Our Worldwide Membership! full workshop attendees can join SPE at no additional cost. Look for your exclusive offer by shortly after the event. SPONSORSHIP SUPPORT INFORMATION Sponsorship support of the event helps offset the cost of producing workshops and allows SPE to keep the attendance price within reach of operation-level individuals, those who benefit most from these technical workshops. Supporters benefit both directly and indirectly by having their names associated with a specific workshop. While SPE prohibits any type of commercialism within the workshop room itself, the Society recognises that supporting companies offer valuable information to attendees outside the technical sessions. SPONSORSHIP CATEGORIES Sponsorship categories are offered on a first-come basis. Please contact SPE to enquire and verify the availability of categories. Existing supporters have the opportunity to renew the same level of support for annual workshops. SPONSORSHIP BENEFITS In addition to onsite recognition, SPE will recognise sponsors on the SPE website and in all printed materials for the workshop. Based on the category selected, supporting companies also receive logo visibility on promotional workshop items. FOR MORE INFORMATION For a detailed list of available sponsorship opportunities, including benefits and pricing, contact Ellen Chan at echan@spe.org.

5 : Yes No REGISTRATION FORM Membership No. Name: (First / Forename) (Middle) (Last / Family Name) Position: Company: Address: Town/City: Zip/PostalCode: Country: Tel: Fax: Would you be willing to give a brief (10-15 minutes) presentation (Yes/No)? If yes, please attach the topic with a short abstract of your proposed presentation. One of the Programme Committee members will contact you to discuss your presentation. Important: Registrants for SPE Workshops are accepted on the basis of information submitted by each registrant. Technical Disciplines (Check One) Drilling Health, Safety, Security, Environment and Social Responsibility Completions Production and Operations Management and Information Reservoir Description and Dynamics Projects, Facilities and Construction Primary Responsibility (Check One) Drilling Economics Geology Geophysics Management Operation Production Reservoir Surveillance Other: List background and experience. (Use additional paper if required). List your expectation for the Workshop, so that the committee can tailor a portion of the Workshop to answering attendees concerns. (Use additional paper if required). Registration Fees Please tick appropriate box Super Early Bird Registration BY 24 February 2017 Early Bird Registration BY 24 March 2017 Registration AFTER 24 March 2017 Workshop US$ 1, US$ 1, US$ 1, US$ 1, US$ 1, US$ 1, GROUP REGISTRATIONS AVAILABLE - Please contact us at spekl@spe.org Note: Fee includes workshop sessions, workbook, certificate, daily luncheons and coffee breaks. Registration fees do not include accommodation. Payment by Telegraphic Transfer Telegraphic Transfer (Bank details will be provided on the tax invoice). Payment by Credit Card Credit Card Payment will be in U.S. Dollars only American Express MasterCard Visa Diners Club Card Number Expiration Date (mm/yy) Security Code (3 digits on back of card / 4 digits on the front of Amex) Credit Card Billing Address & Zip/Postal Code Name of Card Holder Signature Note: Forms will not be processed and space cannot be guaranteed unless accompanied by payment for total amount due. Cancellation Policy: a) A processing fee of USD will be charged for cancellation received thirty (30) days prior to the first day of the workshop. b) 25 % refund will be made for cancellation received between twenty nine (29) - fifteen (15) days prior to the first day of the workshop. c) No refund on cancellation received fourteen (14) days prior to the first day of the workshop. d) No refund will be issued if a registrant fails to show up on-site. This form may be used as a company invoice. Mail completed registration form with remittance and any supporting material to: Society of Petroleum Engineers Level 35, The Gardens South Tower, Mid Valley City Lingkaran Syed Putra, Kuala Lumpur, Malaysia. Tel : Fax : spekl@spe.org