National Data Center Perspectives:

1
National Data Center Perspectives

• Profitable NDRs That Attract Foreign Investment

NDR5 Washington D.C. Trey Harper September
23, 2004
2
Contents

• Industry Perspectives
• Old Premise, New Premise
• Global Picture
• Maturity Model
• Remaining Challenges
• Evolve the NDR Business
• From Data Repository to Activity Center
• From Cost Center to Profit Center
• What Does a Profitable NDR Look Like?
• An Open System That Attracts Foreign Investment
• Examples
• Conclusion

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Longstanding Premise

• The world is rich in opportunities for oil
  companies
• Oil companies need rapid, secure access to data
  for risk analysis
• All things being equal, countries with well
  organized, quality data hold a stronger market
  position in terms of attracting investment

NDR Technology Will Lead The Way
? ? ?
4
New Premise

• Many countries have embraced the old premise and
  achieved several data management objectives
  through an NDR
• These countries now need an increase in user
  activity and foreign investment dollars to
  justify their NDR in the future
• Challenges remain for achieving key business
  objectives

Technology Alone Will Not Address the Challenges
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National Data CentersThe Global Picture
Russia Yamal
Norway DISKOS
UK CDA
Canada
Netherlands
Kazakhstan
Japan
Algeria
MMS
Pakistan
Mexico
India
Yemen
Trinidad
Nigeria
Venezuela
Colombia
Cameroon
Congo
Indonesia
Tanzania
Papua New Guinea
Angola
Brazil
Peru
Mozambique
Bolivia
Western Australia
South Africa
Where do we go from here?
How do we measure success?
Are we asking the right questions?
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State NDR/NDC Maturity Classification

• 4 Activity Hub- open and integrated, network of
  partners, broad footprint, rich service offering

3 Efficient - Cost saving, frequent usage,
trusted source, standards validated content,
limited services, near-line, self funding
2 Adequate- Online shelf, public usage,
moderate activity, average quality
1 Archive- shelf online, min footprint,
sporadic internal usage, adequate preservation
0 Ineffective-shelf, low internal usage, poor
delivery, internal
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Maturity Index Measures

• Storage
• Shelf, Online, near-line, catalog, retention,
  preservation, footprint
• Delivery
• Turn around time, security, reliability,
  ordering/access methods
• Service Offering
• Catalog, Archival, Value Add (trading,processing,
  AD)
• Usage
• activity levels, consumer diversity
• Submission
• Percentage digital, receipt, automation,
  rejection rate
• Quality
• Validation, consistency, completeness, TQM,
  history tracking, standards

8
Challenges Remain for the TypicalNational Data
Repository

• Data access availability problems
• Weak or missing data evaluation tools
• Data quality concerns
• Cost control justification
• Data promotion foreign investment activity
  difficult to achieve

How do we address these challenges?

• Evolve the business model through an expanded set
  of services that focus on self-funding NDRs that
  attract foreign investment

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NDR Funding Models

• Government (cost center)
• Financed directly by the state as an
  inward-investment vehicle
• Development Aid (cost center)
• Financed through loans from world or regional
  development banks
• Joint Venture / Partnership (shared cost center)
• Financed through partnership or joint venture
  with the NDC operator
• Subscription (profit center)
• Active OG companies commit to pay multi-year
  annual fee
• User fees (profit center)
• Financed through the sale of products, data
  packages, and services
• Success fees (profit center)
• State awards success fee to NDR business unit for
  the role it played in finding the buyer of an
  investment opportunity (i.e. marketing
  supporting a licensing round promotion)

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Evolve the NDR Business Applying Best
Practices

• From Data Repository to Activity Center
• Establish adhere to rigorous data quality
  policies and enlisting the support of a trusted,
  neutral, 3rd party if required
• Create an open system where data is readily
  available accessible to everyone with the right
  credentials
• Provide data evaluation tools
• From Cost Center to Profit Center
• Create investment opportunities that are
  dependent on datasets found in the NDR
• Promote investment opportunities aggressively
• Sell supporting data online

PASSIVE MARKETING
PROACTIVE MARKETING
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What Should a Profitable NDR Look Like?

• A self-funded, open system NDC focused on
  promoting investment in the states
  petroleum-industry through an expanded set of
  services --
• Passive Marketing (Activity Center)
• Data Management
• Seismic processing for pre-stacked, post-stacked
• Log processing
• Data interpretation, preparation delivery
• Data storage
• Cartography
• Enhanced Data Access
• Proactive Marketing (Profit Center)
• Data marketing sales
• Licensing round services promotion
• Data rooms online or physical
• Online marketing
• Road shows

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Proactive Marketing Solution Approach

• Promote a licensing round in your country that
  requires access to your data for the purposes of
  risk analysis

• Funding Models
• Success fees
• State awards success fee to NDR business unit for
  the role it played in finding the buyer of an
  investment opportunity (i.e. marketing
  supporting a licensing round promotion)
• Data Pack Sales

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Proactive Marketing Solution Licensing Round
Promotion

• Country Marketing Plan
• Highlight the investment opportunities created
  through the licensing round
• Provide reasons why bidders should be interested
  in country
• Block Evaluation Preparation of Marketing
  Material
• Site assessment data audit
• Blocks quick evaluation
• Preparation of marketing strategy

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Proactive Marketing Solution Licensing Round
Promotion

• Country Block Promotion
• Countrys Licensing Round website
• Examples of successful plays fields
• Data Packages Data Rooms
• Data selection Preparation
• Sales of data packages
• Data room setup management
• Marketing Campaign
• Advisory Support

? Revenue generator to help cover LR promotion
costs
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Case Study India NDC

• Abbreviated Timeline
• Jan Indian NDC opens under directorship of DGH
• Feb DGH announces promotes 15 blocks under
  NELP-IV (offline online marketing activities)
• Mar road shows in London, Calgary, Houston
  Perth interest attendance so high from the
  information data packs made available online
  that requires more road shows in Paris, Moscow,
  Rio de Janeiro
• Apr Companies continue registering their
  bidding interest through the INDC and purchase
  data packages using the online transaction
  service (beating prior years sale records due to
  their accessibility)
• May over 20 foreign companies plus domestic
  players are able to make timely investment risk
  evaluations many of these foreign companies are
  evaluating India investment potential for the
  first time
• Jun bid round closes on time with 12 foreign
  companies submitting high quality bids
• Sep DGH announces successful bid awards for all
  15 blocks on offer, including 8 new international
  companies investing in Indias hydrocarbon sector
  for the first time
• Dec DGH visits various cities to finalize
  sign agreements with successful foreign bidders

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Case Study India NDC

• Results
• Leveraging Indias preserved assets to increase
  inward investment for the benefit of the State
  overall.
• Ability to provide global exposure of Indian
  investment opportunities to the OG industry
  world-wide.
• Ability to attract small mid-sized companies
  due to the ease of access to key data and
  information, whom otherwise might not have
  participated.

• Ability to include ONGC relinquishments and
  farm-in opportunities with the direct
  (secure/entitled) access through INDC to the
  EPINET system.
• Ability to grow sales of data packages thereby
  generating additional income for further DGH
  study projects

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PEMEX Burgos Basin Licensing Round

• Challenge
• Attract foreign investment for gas development
• Market 8 MSC blocks through public process
• No experience with license rounds
• Significant amount of supporting data
• Must be transparent process
• Approach
• Market online to thousands of potential investors
• Create online Pemex channel
• Set-up online data rooms with 35 Gigabytes
  online
• Physical data room a replica of ODR in Reynosa
• Monitor block interest through buyer statistics
• Results
• Attracted 300 professionals from 150 companies
• Self-funded the entire promotion through data
  pack sales
• Licensed 5 blocks generated over 4.0B
• PEMEX learned valuable lessons
• Successful engaged in further rounds

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2004 AD Activity 100MM Deals
Its time to create more investment opportunities
Excludes 213 deals valued at less than 100M
and 184 deals with values undisclosed
Source J.S. Herold 09/2004
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National Data Center Perspectives

• Profitable NDRs That Attract Foreign Investment

NDR5 Washington D.C. Trey Harper September
23, 2004