EBusiness Oil and Gas Industry

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E-BusinessOil and Gas Industry
E Business could be the Business for the Oil
and Gas Industry Presentation to POSC December
9, 1999 Houston,TX
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Historical Growth 1989-1998

• Revenue growth 0
• Earnings growth 5.6
• Cost reduction (3.8)
• Volume growth 1.6
• Price growth Negative
• ROCE 10.3
• TSR 18.1

Historical performance has been strong, but not
strong enough to meet new corporate objectives.
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Growth in Large Companies
1989-1998 Average Annual Earnings Growth
US Companies Larger than CHV 65 Companies
with double digit growth 16 LTIP with double
digitgrowth 0
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eBusiness Growth by Industry
e
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eBusiness Traditional Approach
Total Cost nn Total Transactions nn Cost per
Company n/2
Seller A
Buyer A
Buyer B
Seller B
Buyer C
Seller C
Buyer D
Seller D
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eBusiness Transaction Hub
Total Cost n Total Transactions nn Cost per
Company 1
Seller A
Buyer A
Buyer B
Seller B
Transaction Hub
Buyer C
Seller C
Buyer D
Seller D
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Digital Marketplaces are Intermediaries
Definition A third-party intermediary that
provides value-added services for buyers and
sellers trading on the Web

• Strategy
• Build a reputation as a consumer advocate
• Access large numbers of buyers and sellers
• Invest heavily in branding

Buyer A
Seller A
Intermediary
Seller B
Buyer B
Seller C
Buyer C

• Mission
• To help sellers expand markets
• To help buyers identify bestsellers
• To disseminate near-perfect information
• To manage the inherent diversity in systems,
  processes, and data
• To build more efficient markets

• Scope
• Can focus on a particular set of products or
  services or cover broader range
• Can disseminate information only, or also
  facilitate transactions
• Can retain the title of goods and act as a
  reseller

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Definition - E-commerce uses the Internet, IT
applications and technology to enable the buying
and selling process. E-business deals with the
continuous optimization of and organization's
value chain position. The e-business has
integrated its e-commerce, customer
relationship, knowledge, supply chain and
logistics management applications.
Source - Gartner Group
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Through 2002, 80 percent of enterprises will fail
to understand the characteristics of e-business,
resulting in incoherent strategies and missed
opportunities (0.8 probability).
Source - Gartner Group
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e-Business Revolution in Chevron
1980
83
84
87
91
93
97
99
98
88
90
2,200 EDI Trading Partners CBEST
130 EDI Partners
PROFS e-mail
EFT
JIBE
FastPay
CRA e-PROC.
First EDI
IPS CitiBank
CIP VSS/EC
Internet Business Evolution Framework
1980 - 1990
93
97
98
92
94
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E-mail File Transfer
Marketing
Multimedia
Groupware
Virtual Trading
Workflow Business to Business
Decision Support
Transactions Retail, Financial, etc.
Source Donovan, The Second Industrial
Revolution
Web Applications
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eProcurement System Architecture
Supplier
Idle / Surplus Equipment
Intranet
Supplier

• SAP
• JDE
• Chemical
• JDE
• COPI

Multi- Vendor Electronic Catalog
Operating Resource Management System
Supplier
EDI / EFT
PO / Invoice / Funds
Supplier
Firewall
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Evolution of Business Models
Internet enabled workflow
Integrated information access,
visualization Locally connected
Mid range client server silo data mgmt.
Virtual Organizations
Multi-disciplinary Asset teams
Back office Mainframes
1990s
Functional Groups
1975-80s
Transaction Processing
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eRooms
the Workbench regulatory compliance
royalty owners virtual collaboration
(research, prospect maturation)
remote technical support
the Store Room outsource EP data mgmt.
Application service provider
The Parlor buy sell oil and gas
properties procurement industry intelligence
(news, statistics) trading and logistics
transportation (leveraged services) buy sell
EP data
The Study professional training events,
conferences employment
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Questions, Suggestions?