NATIONAL BUYER /SELLER FORUM 2012

OWNERS INSIGHTS

NEXEN INC – OUR BUSINESS

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• Conventional Oil & Gas

- UK North Sea

- Offshore West Africa

- Deepwater Gulf of Mexico

• Oil Sands

- Long Lake

- Kinosis

- Leisemer / Cottonwood

- Hangingstone ( Joint Venture)

• Shale Gas

- Dilly Creek NE BC

- Colombia And Poland tests

SCOTT PLATFORM NORTH SEA UK

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USAN FPSO

• Floating Production, Storage and Offloading unit

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OIL SANDS ASSETS

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DILLY CREEK SHALE GAS

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WHAT ARE WE WORKING ON IN OIL SANDS

- Kinosis K1A SAGD facility 20,000bpd

- Pads for Kinosis K1A and future pads

- Long Lake Diluent recovery unit

- Kinosis K1B SAGD facility 20,000 bpd

- Planning for a series of 20,000 bpd SAGD facilities over the next 12 years

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SCM STRUCTURE/INTERFACES, CANADA

• Enterprise Supply Chain Solutions

• Shale Gas

• Oil Sands Project Development and Execution (OSPDE)

• Category Management

• Long Lake Operations

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GUIDING SCM PRINCIPLES/PHILOSOPHIES

• How we work handbook:

- Covers Integrity, HSE, Confidentiality, Business records, Human rights etc.

• Cost of acquisition

• Lifecycle cost evaluation

• Quality Suppliers list

• Supplier relationships

• Long term agreements where possible

• Low risk, low cost products

• Operations is the client

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STRATEGIC PROCUREMENT OSPDE

• Supplier of Choice Agreements for Bulk materials

• Seek Opportunities for other long term supply agreements

• Standardization opportunities for key equipment for SAGD facilities

• Maximize off site modularization

• Reduce cost of acquisition

• Build strong supplier relationships

• On time payments 10

WHAT OUR EP COMPANIES BUY

• EP’s act as our Agents

• EP’s purchase all materials and equipment for a permanent installation

• EP’s do not issue labour sub-contracts

• Current EP’s for OSPDE:

- Fluor Canada

- Three Streams Engineering

- Technip

- Hatch

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WHAT WE BUY

• Nexen issue all labour sub-contracts

• Nexen issue all Contracts for Module fabrication

• Nexen buy Construction shorts

• Nexen buy all materials for plant operations, maintenance , reliability and

sustainability

• Nexen buy all chemicals

• Nexen self manage Logistics and Transportation

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WHAT WE LOOK FOR IN SUPPLY CHAIN PARTNERS

• Quality

• Resources: Facilities and people

• Strong financials

• Innovative

• Flexible

• Operations support

• Safe 13

HOW WE WORK WITH SUPPLY CHAIN PARTNERS

• Supplier of Choice Agreements

• 3-5 year terms

• Instruct EP’s to use these agreements – no bidding

• Defined Terms and Conditions

• Performance metrics – both on Supplier and Owner

• Executive sponsors

• Accessible by all Nexen facilities

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WHAT CAN WE DO BETTER ?

• Why so much paper ?

• Do our specifications make sense ?

• Who’s typically missing from design ?

• Do we need a strong Alberta based manufacturing sector ?

• Are Terms and Conditions onerous ?

• Why so long to get from a design data sheet to award ?

• Are “kick off” meetings addressing the execution issues ? 15

HOW TO ENGAGE WITH OUR COMPANY

• Long Lake Operations : John Beaupre 780-334-3518

• Oil Sands Projects : Phil Downie 403-537-5258

• Shale Gas Projects : Todd Elliott 403 - 699-4045

• OSPDE Supplier of Choice Agreements: Sheri Rouse 403- 873-3544

• Category Management: Jason Kostiuk 403- 699-6687

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CONTACT ME

• Here’s my phone: 403-873-3440 or 403-703-2883 (Cell)

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