Using BPM to Focus on Core Business in ConocoPhillips

Reidar Matre, Director System and Process Exploitation, ConocoPhillips Norway

Cautionary Statement

The following presentation includes forward-looking statements. These statements relate

to future events, such as anticipated revenues, earnings, business strategies, competitive

position or other aspects of our operations or operating results. Actual outcomes and

results may differ materially from what is expressed or forecast in such forward-looking

statements. These statements are not guarantees of future performance and involve

certain risks, uncertainties and assumptions that are difficult to predict such as oil and gas

prices; refining and marketing margins; operational hazards and drilling risks; potential

failure to achieve, and potential delays in achieving expected reserves or production

levels from existing and future oil and gas development projects; unsuccessful exploratory

activities; unexpected cost increases or technical difficulties in constructing, maintaining

or modifying company facilities; international monetary conditions and exchange

controls; potential liability for remedial actions under existing or future environmental

regulations or from pending or future litigation; limited access to capital or significantly

higher cost of capital related to illiquidity or uncertainty in the domestic or international

financial markets; general domestic and international economic and political conditions,

as well as changes in tax, environmental and other laws applicable to ConocoPhillips’

business and other economic, business, competitive and/or regulatory factors affecting

ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the

Securities and Exchange Commission (SEC).

Use of non-GAAP financial information - This presentation includes non-GAAP financial

measures, which are included to help facilitate comparison of company operating

performance across periods and with peer companies. A reconciliation of these non-

GAAP measures to the nearest corresponding GAAP measure is included in the appendix.

Cautionary Note to U.S. Investors – The SEC permits oil and gas companies, in their filings

with the SEC, to disclose only proved, probable and possible reserves. We use the term

"resource" in this presentation that the SEC’s guidelines prohibit us from including in

filings with the SEC. U.S. investors are urged to consider closely the oil and gas disclosures

in our Form 10-K and other reports and filings with the SEC. Copies are available from the

SEC and from the ConocoPhillips website.

Around 16,900 employees Headquarters in Houston, Texas

ConocoPhillips worldwide

The largest independent E&P company in the world, based on proven reserves and production of oil and gas. Activities in 30 countries.

Estimated daily production in 2013: 1,5 million barrels of oil equivalents

Proven reserves: 8,6 billion barrels of oil equivalents

Liquid products

LNG and gas

Gas from North

America

From the OECD

area

From outside OECD

LETIN

G

PRODUKSJON LETING og

PRODUKSJON

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Significant interests on the Norwegian shelf

Net production: 134,000 barrels oil of equivalent per day, incl. fields operated by co-venturers.

Ownership interests in Gasled: Pipelines and terminals for Norwegian gas.

Per 31. desember 2012

Ekofisk Eldfisk Embla Tor

Heidrun Huldra Oseberg Troll Visund Grane Alvheim

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Business Targets for ConocoPhillips Management System

Manage our key activities and be sustainable

Efficient BU, streamlining work processes and organizations

Org. development, move from procedure to business process driven

Line mangers, manage and control daily activities in own processes

End Users, engaged end users to manage critical activities

Integrated Operations, manage collaboration with offshore facilities

Continuous change, end-to-end process view will improve Six Sigma efficiency

Knowledge sharing, use work processes for communication and training

Document structure, use process maps and requirements instead of procedures

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ConocoPhillips Norway BU Management System

Management Processes K

now

ledge S

ha

ring

Network of Excellence

Business Processes

Support Processes

Goals

& K

PI’s

7

From procedures to established process driven Management System

Management system development

Phase 1 – Develop Standard for BPM and the Management System

including APQC based identification of high-level value chains

Phase 2 – Develop Process Repository Content including modeling

conventions (collaboration map template)

Phase 3 – Integrate strategy, goals, KPI’s and documents in all key

processes resulting in a process oriented Management System

Phase 4 – Opportunity based level three and four process mapping

using collaboration map template

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Process Hierarchy

Established one Management System and one

BPM procedure

The Process hierarchy, consisting of four

levels, and numbering is a merged version of

the APQC framework for Oil & Gas Upstream

and client customization

Process hierarchy:

1 Management processes

14 Core upstream business processes

6 Support processes

Appointed key individuals with team members

to represent each process

Level 1: Key Value Chains

Phase 1: Develop high-level value chains and related structure

9

ConocoPhillips Norway BU Management System

Management Processes K

now

ledge S

ha

ring

Network of Excellence

Business Processes

Support Processes

Goals

& K

PI’s

10

BPM & Management System

Mapping of 21 key processes on level 2 as

value chains and sub-elements

Mapping of 21 key processes on level 2 as

collaboration maps (management engagement)

Preparing, training and supporting the

organization in process analysis and mapping

Communicated COPNO standard for process

design and analysis

Level 2 Example

Phase 2: Develop Process Repository Content

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Modeling Conventions

Drill down in process hierarchy for details, both

through value chains and principle models

Principle process model/collaboration map

from business management perspective.

Technical process model/collaboration maps

from workforce perspective.

Dedicated swim lanes for key organizational

units, including Applications and Documents

Interaction between the different organizational

groups – visualized by standardized color

coding

Example

Phase 2: Customized Norway BU process model template (collaboration maps)

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Process model example (collaboration map for Risk Assessment)

Process map for Green Tag Permit (with requirement)

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Process map for Green Tag Permit (with requirement)

14

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Phase 3: Management System Integration

Business focus

Stronger connection between yearly goals & KPI’s vs processes & activities

Correlation of existing applications (300) with all 21 key processes

Correlation of existing governing documentation (400) with all key 21 processes

Two way connection between procedures and processes

Formalize all governing documentation including requirements as procedures

Keeping track of maturity, status and progress in many parallel streams

Integration of intranett based management system incl. procedure portal

Mapping of principle and technical collaboration maps (350)

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Phase 3: Management System Integration

MS administrative structure

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Phase 4: Opportunity based level three and four process mapping (collaboration maps)

Developed best practice process mapping

Focus on opportunities to improve core business (efficiency and safety) on a voluntary

bases

Facilitate BPM work groups with minimum formalization to build momentum

Clarify interaction and dependencies between key processes

Formal requirements for use of “process model template” in all improvement projects,

including IT

Same BPM team facilitates all process mapping with work groups/ line managers

Same work groups are responsible for communication, training and continuous

development of as-is process models/ business activities

Line manager and process owner is most often the same person

Develop job descriptions based on process interaction and business activities

Basis for individual performance agreement with supervisor

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Questions from the audience

BPM is an ongoing journey with a lifecycle perspective

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Summary

Experiences

Process team and not the owner role have to be in focus along with key personnel

Process ownership is best handled by Process team appointed by line managers

Management System serves as the basis for communication and for further BPM activities inside each

individual function

Communicate clearly that this is core business – not a one-time initiative

Resistance to change can be reduced by involving right people/end users

No need for selling – ”this is your job”

Develop in live systems

Ability to influence/improve their work processes by participating in the process teams/network.

Training for new employees and experienced employees into new roles

Managers gain a process oriented view of understanding their responsibilities and how their functional

unit relates to other processes

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Thank you for your attention!