1. Achieving Operational Excellence March, 2006

2. Copyright – Emerson Process Management, March 2006, Slide 2 The World Has Gone DIGITAL!

3. Copyright – Emerson Process Management, March 2006, Slide 3 Law Of Accelerating Returns Analysis shows that Technological change is exponential

4. Disposable printers? Storage is ‘free’: $65 My old PC

5. Copyright – Emerson Process Management, March 2006, Slide 5 Greenfield 34% Expansion / Modernization 66% We Have To Serve Both Greenfield and Brownfield Customers World AreaO & GRefiningPharmaChemicalPowerW & W NA LA W Europe E Europe ME Africa AP

6. Copyright – Emerson Process Management, March 2006, Slide 6 Shell - “Our Vision” Use the newest technology to create the “Plant of the Future” Concentrate on safety and environmental concerns – System must be robust Focus on cost – Low life cycle cost Manpower training – Must be easy to operate and maintain Obsolesce resistance – must be based on industry standard software norms

7. Copyright – Emerson Process Management, March 2006, Slide 7 The Technology Universe Parallel computing Moore’s Law.NET Artificial Intelligence Artificial Intelligence HART Process Diagnostics Predictive Algorithms Energy Scavenging DSP’s Enhanced EDDL Ultrasonic Fuel Cells MP3 802.11 (beyond G) 802.15.4 GPS Foundation Fieldbus.NET Model Base Programming Model Base Programming MEMS Scaleable Graphics - Avalon Scaleable Graphics - Avalon Motes FireFox Advanced Signal Processing OPC UA Smart Objects GPRS PAT Security S99 Bit Torrent AES RSS XML UML Security Vista SOA AVALON W-bluetooth Skype OPML

8. Copyright – Emerson Process Management, March 2006, Slide 8 Operational Excellence Profit Cost $ time  Safer operation  Fewer unscheduled outages  Shorter scheduled outage  Higher sustained production with minimize costs  Longer duration to scheduled outage  Faster time-to profit

9. Copyright – Emerson Process Management, March 2006, Slide 9 Smart cars monitor tire pressure Tire icon indicates low pressure Car advises driver of abnormal situation made possible via disruptive technologies

10. Copyright – Emerson Process Management, March 2006, Slide 10 Smart Car Messages  Seat belt  Cargo door open  Passenger door open  Wiper fluid low  Turn signal on  Right rear tire pressure low  Change engine oil  Fuel low Smart Car Messages  Seat belt  Cargo door open  Passenger door open  Wiper fluid low  Turn signal on  Right rear tire pressure low  Change engine oil  Fuel low Messages I do not get  Check engine  Big red oil light Messages I do not get  Check engine  Big red oil light

11. Copyright – Emerson Process Management, March 2006, Slide 11 Two requirements: - Sensing technology - Presentation to user at the right time Two requirements: - Sensing technology - Presentation to user at the right time

12. Copyright – Emerson Process Management, March 2006, Slide 12 Early warning Oil Pressure Alarm time Car Performance Sequence Of Events Change Oil Light Major Performance Impact Safety incident

13. Copyright – Emerson Process Management, March 2006, Slide 13 We Help Our Customers Deploy Smart Digital Plants We Help Our Customers Deploy Smart Digital Plants

14. Copyright – Emerson Process Management, March 2006, Slide 14 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY Smart Plant Architecture SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY

15. Copyright – Emerson Process Management, March 2006, Slide 15 Today’s Smart Field Devices Predict Abnormal Situations On-board computing power enables step changes in functionality Often have more than one process variable for a single pipe intrusion Full with diagnostics –health of device is known –health of the application is monitored –health of the process is monitored “At 12:45 tomorrow, this valve will fail”

16. Copyright – Emerson Process Management, March 2006, Slide 16 Early warning Device failure time Plant Performance Intelligent Devices Report Health Device alert Process Impact Safety Incident

17. Copyright – Emerson Process Management, March 2006, Slide 17 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY Smart Plant Architecture SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY

18. Copyright – Emerson Process Management, March 2006, Slide 18 Smart Predictive Alerts Pressure Transmitter Example Sensor failure

19. Copyright – Emerson Process Management, March 2006, Slide 19 Smart Predictive Alerts Pressure Transmitter Example Process problem

20. Copyright – Emerson Process Management, March 2006, Slide 20 Smart Predictive Alerts Valve Example Valve is performing sub-optimally

21. Copyright – Emerson Process Management, March 2006, Slide 21 Smart Predictive Alerts Valve Example Valve needs maintenance

22. Copyright – Emerson Process Management, March 2006, Slide 22 Smart Predictive Alerts Compressor Protection Example Compressor needs maintenance

23. Copyright – Emerson Process Management, March 2006, Slide 23 10 Year Old Plants Do Not Have Predictive Capabilities Process view is fuzzy Process view clear

24. Copyright – Emerson Process Management, March 2006, Slide 24 A Real Case Of Not Seeing What Is Happening The explosion was caused by flammable hydrocarbon liquid continuously being pumped into a process vessel that, due to a valve malfunction, had its outlet closed. A control valve being shut when the control system indicated it was open.

25. Copyright – Emerson Process Management, March 2006, Slide 25 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY Should All These Alarms Go To The Operator? SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY ? ?

26. Copyright – Emerson Process Management, March 2006, Slide 26 Motor Overheating time Device Performance Alarms To Operator? Example shown: NO Impellor Imbalance Process Impact Time For Action > 6 months Early alarm to MAINTENANCE only as there is a long time before process impact. 

27. Copyright – Emerson Process Management, March 2006, Slide 27 time Device Performance Alarms To Operator? Example shown: NO (long time before failure) Valve frozen open in utilities plant Process impact Time For Action > 1 year Early alarm to MAINTENANCE only as there is long time before process impact 

28. Copyright – Emerson Process Management, March 2006, Slide 28 time Device Performance Failure of a Critical Valve Column Impacts The Process Immediately Valve frozen open in distillation column Process impact  Time For Action < 30 minutes Early alarm to MAINTENANCE and OPERATOR as action is required immediately to prevent process problems

29. Copyright – Emerson Process Management, March 2006, Slide 29 Plants Must Have An Alarm Message Map Cost of Ignoring Alarm Time To Avoid Process/Safety Impact Alarm Destination Map High Priority Medium Priority Low Priority Medium Priority Operator Maintenance Optimization Personnel Safety Personnel Maintenance Optimization Personnel Safety Personnel Maintenance Optimization Personnel History Collection Maintenance Optimization Personnel History Collection Operator Maintenance Safety Personnel Operator Maintenance Safety Personnel 

30. Copyright – Emerson Process Management, March 2006, Slide 30 The Importance Of Alarm Handling In the last 11 minutes before explosion, the operators had to recognize, acknowledge and act on 276 alarms Milford Haven was 25x the recommended maximum

31. Copyright – Emerson Process Management, March 2006, Slide 31 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY Alarm Messaging Map SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY Predictive Abnormal Situation Alarms Degraded Safety Alarms Asset Health

32. Copyright – Emerson Process Management, March 2006, Slide 32 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY All Critical Alarms – To Operator (Regardless of whether a device or controller created them) SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY OPERATOR INTERFACE

33. Copyright – Emerson Process Management, March 2006, Slide 33 PT-101 Alert The Operator Before Process Impact Operator Interface

34. Copyright – Emerson Process Management, March 2006, Slide 34 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY All Asset Alarms To Maintenance SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY ASSET INTERFACE

35. Copyright – Emerson Process Management, March 2006, Slide 35 Maintenance / Reliability Dashboard

36. Copyright – Emerson Process Management, March 2006, Slide 36 SMART MACHINERY HEALTH MANAGEMENT SMART MEASUREMENT SMART MEASUREMENT SMART ANALYTICAL SMART ANALYTICAL SMART SAFETY SMART SAFETY All Safety Alarms To Safety Personnel SMART ASSET OPTIMIZATION SMART FINAL CONTROL SMART FINAL CONTROL SMART DIGITAL CONTROL SAFETY Degraded Safety Alarms

37. Copyright – Emerson Process Management, March 2006, Slide 37 Safety Personnel Are Roaming  Cell phone, pager, email…Detailed Summary

38. Copyright – Emerson Process Management, March 2006, Slide 38 Best Practices For Operator Alarms EEMUA 191 Benchmarks Plant Alarms# Average Alarm rate (over 10 minutes)1 Alarms after plant upset (over 10 minutes)10 Average number of standing alarms10 Average number of shelved alarms30 Configured Alarm Priority Mix# Critical alarms< 1% High Alarms5% Medium Alarms15% Low Alarms80% Milford Haven was 25x the recommended maximum

39. Copyright – Emerson Process Management, March 2006, Slide 39 Exceed EEMUA guidelines Alarm Analysis Dashboard

40. Copyright – Emerson Process Management, March 2006, Slide 40 In A Smart Plant, Does The Number Of Alarms To the Operator Increase? No –Best practices are established in the design of the alarm system EEMUA Alarm Map –Early warning alarms properly acted on may actually decrease the incoming alarms as process alarms may be avoided

41. Copyright – Emerson Process Management, March 2006, Slide 41 Poor Health Delivers Unsatisfactory Results At 200 kph !!!

42. Copyright – Emerson Process Management, March 2006, Slide 42 Mercury Filled Transmitters & Switches Disconnected Damper Drive Leaking Valve Body Expect Poor Performance In Plants With Poor Asset Health Poor Equipment Results in Poor Performance and Unsafe Plants

43. Copyright – Emerson Process Management, March 2006, Slide 43 Expect Poor Performance In Plants With Poor Asset Health Poorly performing control is identified Advanced Control Dashboard

44. Copyright – Emerson Process Management, March 2006, Slide 44 Field Level, Instrumentation DCS, Basic Automation PIMS, PIMS interfaces Soft Sensors, Model Based Supervision Advanced Process Control (APC) Scheduling Online Optimization Expect Poor Performance In Plants With Poor Asset Health Enterprise Integration: n Validated Data (Inventory, Loss, etc) Is transmitted to SAP n Asset alerts are transmitted to SAP for scheduling Enterprise Integration: n Validated Data (Inventory, Loss, etc) Is transmitted to SAP n Asset alerts are transmitted to SAP for scheduling n Integrating Transactions is Easy n Reversing them (on bad data) is very difficult n Integrating Transactions is Easy n Reversing them (on bad data) is very difficult

45. Some Smart Plant Builders Shell- Deer Park,Tx** $32M*(vs. HW)- FCCU, Hydrocracker Petrobras Brazil(3)** $17M(displaced Bailey)- Coker, Blending, Crude Pemex- Tula $3M(displaced HW)- Alkylation Unit Shell Motiva Norco $17M*(displaced HW)- Reformers(2), DHT, NHT, SMR, HC Pdvsa, Curacao** $5M*(displaced Foxboro)- SRU(4), H2 Plant, Hydrocracker MOL PLC, Hungary $10M*(vs. YEW, HW)- Diesel Hydrotreater, Sulfur Plant Rompetrol(Romania) $20M(Modernization)- Entire Refinery BP SECCO $30M(vs. YEW)- Ethylene Complex Cenex, Montana $1.5M(vs. Moore)- Desulfurization Scanraff, Lysekil $1M(vs HW)- Merox, Propylene, FCCU*** Yukos, Odessa $2M(vs HW, YEW)- Isomerization, Reformer *-MAC Scope of supply **- Facility in operation ***- Portion of FCCU -64 Refineries with PlantWeb last 30 months, over 500 PlantWeb installations in Refining -Process units: FCCU, Hydrotreaters(Diesel and Naphtha), SRU, H2 Plant, SMR, Alkylation Units, Crude Unit, Vacuum Unit, Asphalt unit, Delayed Coker, Hydrocracker, Reformer

46. Copyright – Emerson Process Management, March 2006, Slide 46 Shell Deer Park Revamp 2003

47. Copyright – Emerson Process Management, March 2006, Slide 47 Shell Deer Park Refining Company Deer Park Refining Limited Partnership “Our Vision” – Shell Deer Park Use the newest technology to create the “Refinery of the Future” Concentrate on safety and environmental concerns – System must be robust Focus on cost – Low life cycle cost Manpower training – Must be easy to operate and maintain Obsolesce resistance – must be based on industry standard software norms

48. Copyright – Emerson Process Management, March 2006, Slide 48 Control Room BEFORE AFTER Shell Deer Park Refining Company Deer Park Refining Limited Partnership

49. Copyright – Emerson Process Management, March 2006, Slide 49 CabinetCabinet BEFORE AFTER Shell Deer Park Refining Company Deer Park Refining Limited Partnership

50. Copyright – Emerson Process Management, March 2006, Slide 50 Field Junction BEFORE AFTER Shell Deer Park Refining Company Deer Park Refining Limited Partnership

51. Copyright – Emerson Process Management, March 2006, Slide 51 Control Valve Diagnostics ValveLink diagnostics prior to cutover found a hidden problem. This valve has not been in automatic for years! ValveLink diagnostics prior to cutover found a hidden problem. This valve has not been in automatic for years! Roger Erfurdt, Deer Park Control Systems manager, has stated that getting this loop to run in automatic has paid for the entire investment in diagnostics.

52. Copyright – Emerson Process Management, March 2006, Slide 52 Results Delivered Operational Excellence –Safety: No OSHA’s –Environmental: No Incidents –State of the art operating interfaces Financial –1% maintenance cost reduction achieved (3%+ is believed possible) –Overall 1-3% utilization improvement –Improved unit reliability –Greatly improved maintenance effectiveness –Huge project savings by reutilizing previous engineering

53. Copyright – Emerson Process Management, March 2006, Slide 53 BARRIERS To Operational Excellence Overly aggressive focus on CAPEX The technology change is the easiest In plant visionaries are necessary and hard to find Management support is critical The human resistance to change is greater than you think

54. Copyright – Emerson Process Management, March 2006, Slide 54 Satellite Service Providers Know Tire Pressure… What use is there for the old- fashioned tire gauge?

55. Copyright – Emerson Process Management, March 2006, Slide 55 “Change Or Be Changed” There are two kinds of organizations in today's world: –those that are changing –those that are going out of business Similarly, there are also two kinds of people –Those who are changing –Those who are setting themselves up to be victims of change Jim Clemmer http://www.clemmer.net

56. Copyright – Emerson Process Management, March 2006, Slide 56 Cannot Be Done Without Technology Cannot Be Done With Technology Alone Cannot Be Done Without Technology Cannot Be Done With Technology Alone

57. Copyright – Emerson Process Management, March 2006, Slide 57 Technology And Experience Deliver Performance

58. Copyright – Emerson Process Management, March 2006, Slide 58