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Risk Management & Value Optimization in the Oil & Gas Industry Being in control of all your commitments Christian Hjorth-Johansen VP - CMA Contiki.

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Presentation on theme: "Risk Management & Value Optimization in the Oil & Gas Industry Being in control of all your commitments Christian Hjorth-Johansen VP - CMA Contiki."— Presentation transcript:

1 Risk Management & Value Optimization in the Oil & Gas Industry Being in control of all your commitments Christian Hjorth-Johansen VP - CMA Contiki

2 Overrun USD Norwegian National Budget reports assumes USD 12 billions in cost overruns in 24 projects in the North Sea. 5 of the projects counts for 95% of the overrun 3 of these seems to be “unsuccessful” Serious disputes between operator and contractors 1 of these overran partly due to extended scope 2

3 Someone has to pick up the additional cost of overruns 3 Contractors Operators Governments

4 Typical Operating Environment vs. O&G Industry Environment IDTypical Operating EnvironmentO&G Industry Environment 1High volume, Low value, Low risk contracts Low volume, High value, High risk contracts 2Few contracting parties that are able to meet frequently Multiple contracting parties, with conflicting interests, and are unable to meet frequently 3Limited interaction required between contracting parties Frequent interaction necessary due to complexity of projects, schedules, resources, responsibilities, etc. 4Contracts do not change often, except during renewals, extensions, etc. High propensity for changes to scope, technical design, roles & responsibilities, schedules, sequences, etc. 4

5 Delivered Contract Lifecycle Management (CLM) solutions since 1991 Solely focused on developing and implementing solutions for Contract Lifecycle Management (CLM), Sourcing and Supplier Management in the Oil &Energy industries Co-developed solutions with large O&G companies over the last 20 years Rated as “best-in-class” in 2013 by Gartner CMA Contiki OUR VISION: “Contiki is the preferred and safe choice for ambitious businesses whose success and performance highly depend on effective management of contracts” 5 5

6 Only one-ninth of the volume of an iceberg is above water. The shape of the underwater portion can be difficult to judge by looking at the portion above the surface. →This has led to the expression "tip of the iceberg", for an issue or difficulty that is only a small manifestation of a larger issue.tip of the iceberg

7 The formal contract The “un-signed” commitments / promises expressed and agreed between the parties both before and after the contract is signed The total commitments between the parties! Formal and informal commitments

8 (Pre) Award Signed Contract Options Appendixes, Specifications Post Award Amendments Declared options Signed Variation/Change orders Pre Award s with confirmations, questions, clarifications/ acknowledgements Protocols / Minutes of meeting Personal Notes Letters Bid/Tender evaluations Supplier performance evaluations/audits Certificates, HSE, Financial reports/ratings Drawings Post Award Project follow up Change orders with background information s with confirmations, questions, clarifications/ acknowledgements Supplier performance evaluations/audits Certificates, HSE, Financial reports/ratings Variation/Change Order Requests Disputed Variation/Change orders A Project Lifecycle is a journey of commitments

9 Contractor team Operator team Is your Information Management processes robust? 9 Both before or after the award, people in the client and contractor team interact, clarify and make commitments Is there processes in place for good Information management? Do they cover changes in organisation and staff?

10 How do you capture and document the commitments? Private folders Public folders Share Point folders 10 File folders Traditional Contract Mgmt Arch.System Operator team

11 How do you capture and document the commitments? Public folders Share Point folders File folders Traditional Contract Mgmt Arch.System Private folders Operator team

12 What happens when people leave? Private folders Public folders Share Point folders File folders Traditional Contract Mgmt Arch.System Operator Team

13 How do you find the information about your commitments when in trouble? Private folders Public folders Share Point folders File folders Traditional Contract Mgmt Arch.System Operator team ? ? ? ? ?

14 Contract Renewal/Termination: Alerts & Notifications Configurable Meta-data KPIs & Reports Key CLM capabilities to support the O&G Industry 14 Contract Creation: Contract templates Integration with MS Word Communication Mgt Configurable Meta-data Contract Risk Profiling Multi-party agreements Audit Trail / Search Contract Collaboration: Version Control Comparison of Versions Communication Mgt. Review & Approval Alerts & Notifications Audit Trail / Search Document Management System Contract Execution: VOR / Change Order Mgt Communication Mgt. Roles Review & Approval Alerts & Notifications Audit Trail / Search Contract Administration: Workflow Alerts & Notifications Communication Mgt. Audit Trail / Search Task Lists Review and Approval Executive Dashboards 007 Reporting SKK Migas Key Integrations with: ERP for Contract, Vendor and Spend Internal and External Collaboration systems Single Sign-On using Active Directory Strategy & Sourcing Pre-Qualifications Integrated eSourcing Bid Evaluation Negotiations Communication Mgt Audit Trail / Search

15 One source of commitment information A critical Success factor «Our contract management solution structures the process of capturing and managing all the information related to our contract relationships -and will save us on a rainy day» Operator, North Sea Operator or Contractor Team Pre Award Signed Contract Options Appendixes, Specifications Pre Award s with confirmations, questions, clarifications/ acknowledgements Protocols / Minutes of meeting Personal Notes Letters Bid/Tender evaluations Supplier performance evaluations/audits Certificates, HSE, Financial reports/ratings Drawings Post Award Project follow up Change orders with background information s with confirmations, questions, clarifications/ acknowledgements Supplier performance evaluations/audits Certificates, HSE, Financial reports/ratings Variation/Change Order Requests Disputed Variation/Change orders Post Award Amendments Declared options Signed Variation/Change orders

16 capture and manage all commitments

17 CMA Contiki For questions, please contact: Christian Hjorth-Johansen Cell: “If you’re not in control of your contracts, you’re not in control of your business” “If you’re not in control of all your commitments, you’re not in control of your contracts”

18 Proprietary notice This presentation material is the property of CMA Contiki AS. It is subject to copyright restrictions and may not be used by the receiver for any other purpose than what is intended by the owner of the material or what has been specifically agreed with him. The material may only be used for internal presentations and assessments. No distribution or reproduction is permitted, partially or in its entirety, without the prior written consent of the proprietor. Some pictures utilized in the material may be subject to copyright restrictions by other proprietors. The potential unauthorized distribution, reproduction or use of such pictures, acquired through special lease arrangements, will be governed under the license agreements of the proprietor. Receiver shall indemnify and hold harmless CMA Contiki AS from and against any claims for damages for actual or alleged infringement of intellectual or industrial protection rights arising out of or asserted in connection with the use of materials furnished by CMA Contiki AS. © 2014 CMA Contiki AS


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