Introducing Subsea Connect Neil Saunders President & CEO, Oilfield Equipment, BHGE
Global offshore (E&P CAPEX) 1 14-21 ($B) 400 Global offshore capital investment projected to grow at a CAGR of 16% with Deepwater leading the growth 300 200 100 343 282 215-47% 180 164 173 +16% 200 242 Offshore greenfield capex in 2018 expected to be $94B 0 14 15 16 17 18 19 20 21 3Yr CAGR : High : 18% Base : 16% Low : 1% 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 $/bbl. ; IHS Markit Upstream Spend report (August, 2018) 2
Change makers Game changing technology Integrated perspective Digital transformation Low-carbon transition 3
Breakeven costs have come down. Development costs for subsea projects have fallen 29% since 2015. Average breakeven prices ($/bbl) -29% 73 52 2015 2018 Source: analysis covering the same 3 major greenfield subsea projects over time using data from Rystad Energy 4
We believe there is more to do.
Resources Billion bbl. Unsanctioned subsea projects 2018 35 33 Reducing the economic development point of unsanctioned projects by 30% unlocks 16B bbls of reserves 30 25 20 15 10 5 0 10 18 21 Resource Segmentation @ Current BEP 1 4 7 Resource Segmentation @30% BEP Reduction 5 12B bbl. 4B bbl. Asset break even price bands >$75 $50 <= x <= $75 $25 <= x <= $50 $10 <= x <= $25 Source : Rystad Ucube (October 2018), Brent oil price at $75 6
Introducing Subsea Connect
Subsea Connect Influences 80% of project development costs and value drivers Reduces the economic development point by an average of 30% 8
This is Subsea Connect Project Connect Reservoir to topsides technology solutions Flexible partnerships and commercial models Digital enablement 9
Radically optimized. Outcome engineered. Life-of-field solutions. 10
Project Connect Reinventing how projects are planned and executed
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 12
Project Connect Key features Benefits BHGE credentials SPS & SURF RESERVOIR & SUBSURFACE PROJECT CONNECT TOPSIDES LEAN WELL CONSTRUCTION Economic outcome assessment Parallel tracks to compress assess phase All hands dedicated project teams v Independent project management ability Technology system configuration and project integration Flexible partners and solutions for the project s needs Execution certainty embedded Collaborative and common purpose Speed get to FID faster Improved schedule 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 13
Project development costs CASE STUDY Subsea Connect transforms uneconomic North Sea asset 3 well subsea tie back 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 Impact of Subsea Connect on materially lowering the economic development point Drilling SPS SURF Topside modification NPV improved 2x Owners costs Client subsea development Key factors impacting economic development point CAPEX reduction 50% Well design Consortium synergy Subsea optimization IRR improved 3x Design standardization First oil accelerated 30% Connect initial estimate Cost certainty Optimized installation Procurement strategy FID-enabled Development economic Brownfield modification SUBSEA CONNECT DELIVERS 50% COST REDUCTION Connect prefeed estimates 14
Reservoir to topsides Technology solutions for the life of the field
BHGE Fullstream capability Reservoir optimization Lean well construction Aptara TM TOTEX-lite subsea system Topside optimization 16
Reservoir optimization Reservoir insights and optimization to enhance drainage and recovery over the life of the field. Over 400 geoscientists across upstream business Proven results Globally deployable field teams Increased recovery factor Extended asset life 17
Aptara TOTEX-lite subsea system Delivers up to 50% lower total cost of ownership. Life-of-field design brings increased flexibility Modular and structured portfolio Compact and up to 50% lighter 30% lower lead times Simpler and easier installation, operation, and maintenance 18
Lean well construction Drilling to the technical limit; integrated with the rig to reduce well construction costs significantly. Accelerated drilling campaigns Advanced drilling systems with Autotrak technology 19
Topside optimization Debottlenecking, gas handling, and power solutions to extend asset life Over 1,400 units upgraded Asset life extension Emissions reduction and control 20
Flexible partnerships and commercial models
SURF Portfolio evaluation Exploration and planning support Concept FEED SPS-SURF Pipelay and construction vessels Unique commercial models Economics BHGE + PARTNERS TECHNICAL Stakeholder man. 22
Digital enablement
Field planning & optimization Production enhancement Asset performance management 24
Pillars SEGMENT CATEGORY 16 pt BOLD, ALL CAPS Welcome to engagesubsea.. Change to subsea image Setting new standards in Digital asset life cycle management engagesubsea The next era of operations optimization and predictive maintenance Plan Wing to wing offshore planning and OEM Assets Execute Live on-the-job execution visibility Perform Optimizing performance remotely 20% Reduction in maintenance cost 5% reduction in downtime 25
This is Subsea Connect Project Connect Reservoir to topsides technology solutions Flexible partnerships and commercial models Digital enablement 26
Radically optimized. Outcome engineered. Life-of-field solutions.