PROJECTS GROUP INTRODUCTION

RICHARD STARK

APACHE NORTH SEA

PROJECTS SERVICES MANAGER

SUBSEA UK

NW ENGLAND CONFERENCE

27TH NOV 2014

Apache North Sea

The Projects Group

Projects

Procurement

Summary

ITINERARY

2

APACHE NORTH SEA

3

Bought 2003

$6Bn – drilling

$3Bn – facilities

3 / 4D seismic

Power ring main

Delta V

Pipelines replaced

Deep gas Lift

Bacchus 2012

FASP 2012

4

Bought 2012

Platform rig upgrades

3D Seismic

Semi-sub programme

Access shut in production

Subsea integrity works

APACHE NORTH SEA

Company Improvement Notices Prohibition Notices

Maersk (all sections) 13 3

Talisman 10 1

Shell U.K. Limited 8 6

CNR 8 1

Marathon 7 0

Petrofac Facilities Management 5 0

Total E&P 4 0

Chevron 4 0

Taqa 3 0

Nexen 3 0

BP 2 0

Premier Oil 2 0

Apache 2 0

Sources: OGUK Benchmarking 2013 Data and HSE http://www.hse.gov.uk/notices/notices

SAFETY PERFORMANCE

PRODUCTION – HISTORICAL / CURRENT

6

Forties

Beryl Area

Nelson Scott

Nevis S Telford Buckland Ness Maclure Bacchus

0

500

1,000

1,500

2,000

2,500

3,000

MBOE/D

0

20

40

60

80

100

120

140

Gas

Oil

Mill

ion

s o

f b

bls

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2013 PRODUCTION EFFICIENCY

7

1

3

5

7

9

11

13

15

17

19

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Op

erat

or

Ran

kin

g

Source: OGUK Production Efficiency Task Force Data Pack

FortiesAcquisit

ion2003 2004 2005 2006 2007 2008 2009 2010 2011

MNSLAcquisit

ion2012 2013

Running Costs 130 180 186 226 226 236 198 208 253 365 428

Other Capital 683 9 19 35 22 26 23 24 48 33 1250 64 84

ITS Capital 28 158 214 176 253 226 156 202 263 271 323

Drilling Capital 23 185 240 133 260 210 198 367 527 553 476

Cum. Spend ($ million) 683 873 1415 2091 2647 3412 4106 4681 5507 6583 7833 9086 10397

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

0

200

400

600

800

1,000

1,200

1,400

Cu

mu

lati

ve S

pen

d $

mill

ion

An

nu

al S

pen

d $

mill

ion

EXPENDITURE AND REVENUE

8

2003 2004 2005 2006 2007 2008 2009 2010 2011MNSL

Acquisition

2012 2013

Oil & Gas Revenue 273 472 1275 1355 1399 2103 1369 1605 2185 2771 2728

Total Spend -873 -542 -675 -557 -765 -694 -576 -826 -1076 -1250 -1254 -1311

Current Tax Liability -41 35 -310 -504 -439 -1091 -360 -599 -1235 -1097 -880

Cumulative Rev less Spend less Tax Liability -641 -677 -388 -94 102 419 853 1034 908 -342 78 616

-2,000

-1,500

-1,000

-500

-

500

1,000

1,500

2,000

2,500

3,000

$

mill

ion

THE PROJECTS GROUP

9

The mission of the Projects Group is to provide Apache North Sea with safe, world class project delivery in order to maximize the return

on investment for the Corporation. The Projects Group will, as a minimum, provide the following services: Brownfield project and modifications management to the CNS (Forties and

Bacchus), NNS (Beryl and SAGE) Management of the execution of all topsides and subsea projects Concept development of all greenfield and major brownfield projects Management of all projects from concept definition through to completion and

close out Support to worldwide projects as requested Education, advice and training to; the management team, partners, operations

and support services in Apache North Sea in project management and project implementation

THE MISSION

Pace, Innovation and Excellence Unity of effort, focus and momentum whilst

empowering individuals to use their own discretion and initiative within the implementation process

THE CULTURE

PROJECTS

12

FORTIES ALPHA SATELLITE PLATFORM (FASP)

Mobilised UK yard Largest Tyneside platform 75% UK content Target cost contracting 30% cheaper than benchmark

BACCHUS

14

Manufactured @ Isleburn, Invergordon

Transported to Wester via Wick (above)

6.7 KM

Subsea 7 - Wester

Installed by Subsea 7

Manufactured by RBG

Petrofac Aberdeen

Vetco Gray - Montrose

AVIAT

15

FC FB

FD FE FA

NELSON

FORTIES

AVIAT

BACCHUS

Forties Field TAR 14 days completed 1 day early 37,000 manhours

FPS 36” SSIV installation IRM CNS and NNS campaigns

4 weeks 12 projects

SAGE nitrogen injection facility Civils work complete

SAGE 30” pipeline isolation upgrade Aviat

Fabrication commenced Commence detailed design

2014 SUBSEA PROGRAMME

36” SSIV

IRM – 3 x BB caisson stabilisers

Replacement of 30” SAGE valves

THE FUTURE MORE WITH LESS

Reduced costs

Value

Resource constraints

Alternative locations

Fit for purpose

Standardised engineering

Re-use of engineering

Aligned contracting

Unity of effort

Source: McKinsey’s Energy Insight Offshore Operations Benchmarking Database

Drilling CNS 2015

3 x Forties platform crews 1 x FASP Jack up

NNS 2015 2 x Beryl platform crews

2015 – 2018 2 x semi sub rig shares – Existing fields / E & A / P & A

Developments Tie backs to existing hubs Tie backs to 3rd parties Stand alone developments New Challenges

HP / HT Heavy Oil

FUTURE PLANS

18

Routine contract 3 year + 2 x 1 year extension Non-exclusive

WoodGroup Kenny – Detailed Design 2012 – 2015

Harkand – Diving 2014 – 2017

EMAS – Heavy lift / pipelay 2014 – 2017

Fugro – Inspection ROV 2014 – 2017

Subsea Project Management Support TBA 2014 – 2017

Petrofac – Topsides Scopes 2012 - 2015

EXISTING TIER 1 SUBSEA CONTRACTS

19

SUBSEA ONGOING / PLANS

20

4

3

4 New Distribution Unit

New Controls Umbilical –

8km

New WI & GL line OR New Production Line –

8km

BKA Ness Nevis Pig Receiver works at SAGE Maersk Leadon decommissioning

Aviat – detailed design FA – Slot recovery Bacchus Well 4 Bacchus Well 1 water conversion

New Power/ Sig Cable –

2km

Replace 3 slot Distribution Unit

with 8 slot Distribution Unit

New Production Line – 9.2km

New Distribution Unit

PROCUREMENT

21

Projects, Subsea Driling, Well Svs Operations, Maintenance

Kevin Forbes

Anthony Yule Bruce Alexander John Boyle

Contracts & Purchasing

Supervisor

Senior Contracts Engineer Contracts Engineer Senior Contracts Engineer

Roger Brimmer

Supply Chain Manager

SUPPLY CHAIN -CONTRACTS & PURCHASING

First Point Assessment Ltd (FPAL)

Apache uses FPAL as it’s only ‘vendor database’ to identify potential suppliers.

Registration with FPAL is a prerequisite for doing business with Apache.

Contract Philosophy:

Preference for longer term agreements, typically 3 years with extension options.

Consolidation of workscopes into single agreements combining multiple asset requirements.

Supply Chain -Key Contacts

Contractor Selection:

Competitive pricing and ability to deliver value

Technical Capability including Innovation, Enterprise and proven Expertise

Evidence of Safety, Health, & Environment culture, focus and performance

Alignment with Apache Business Conduct standards and Ethics

Financial Stability & Integrity

aberdeen.contracts@apachecorp.com

10 years of investment in Forties Do the same at Beryl

The future Control costs

Maintain production

Develop new opportunities

Apache’s vendors Shared interest

Pace, innovation and excellence

SUMMARY

23

ADDITIONAL SLIDES

24

MAINT & INTEGRITY –CONTRACT REQUIREMENTS

• Maintenance Tenders to be conducted in 2014/2015 – • Q1 - 2015 : Offshore Module & TR Doors - Supply, Maint & Repair – £3.5M • Q2 - 2015 : Fixed Lifting Equipment - Inspection & Certification - £1.5M • Q2 - 2015 : Hydraulic Services – Flushing, testing and repair – £0.6 M

Specialised Maintenance Support Requirements :- • Production and Deep Gas Lift Gas Compressors - Maintenance, overhaul

Engineering and Technical labour • Equipment LSA Decontamination – Onshore UK • Electrical Motor – Supply and repairs • Valves – Provision of new and or repaired Control, choke and block valves • Diesel Systems - Audit, Managing and testing

• Integrity Tenders to be conducted in 2014/2015 – • Q4 - 2014 : Pipe, Fittings and Flanges (incl studbolts, gaskets) • Q1 - 2015 : Pipeline & Process Services

TOPSIDES PROJECTS – ONGOING / UPCOMING

Forties

Flowlines for drill wells

Alpha modifications for Aviat

Alpha slot recovery

Bravo & Delta lifeboat, davit and winch upgrades

Bravo Switchboard upgrade

Bravo & Delta 110V distribution upgrades

Charlie PA/GA upgrade

New Delta switchroom for future ESPs

Delta sandwash package

Beryl

Flowlines for drill wells

New Alpha switchroom for future ESPs

Prep for Alpha 2016 major shutdown

Alpha gas export metering upgrades

Alpha crude transfer piping upgrade

Bravo Delta V control system upgrade

Bravo Crane upgrades

SAGE

New Liquid nitrogen storage and distribution facilities

Atlantic and Cromarty prep for demolition

Note that some of the above scopes will be managed through Petrofac Facilities Management - Apache’s EPC Contractor.