Lean Leadership. From the Board-room to first line leaders. Lars Kaasa, VP Improvement & Performance, Aker BP

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1 Lean Leadership From the Board-room to first line leaders Lars Kaasa, VP Improvement & Performance, Aker BP

2 How to become Leading? Check out our KPIs What are we Does it describe Not really..success Maybe Exploration measuring? actions to become we could do a LEAN «Leading» project? Gro G. Haatvedt, SVP Exploration Me 2

3 Our First LEAN Project: Basin Modelling 3

4 LEAN IN AKER BP The three principles of Lean in Aker BP 1 Develop flow efficient 2 Visualize progress 3 Continuously learn value streams control and improve MAXIMIZE FLOW A P C D Our value streams deliver what the customer wants, at the right time, amount and quality, with short lead time Progress is effectively visualized so we always know how we are doing, and we detect and respond to deviations quickly We don t know what perfect looks like, therefore we continuously learn and solve problems to continuously improve 4

5 AKER BP ASA Solid footprint covering entire NCS Skarv Solid base performance and upside potential Alvheim High production efficiency and low operating cost Ivar Aasen First oil December 2016 Skarv Johan Sverdrup World class development with break even price below 25 USD/bbl* Alvheim Ula/Tambar Late life production with significant upside potential Valhall/Hod 1 billion barrels produced, ambition to produce additional 500 mmbbls Ivar Aasen Johan Sverdrup Ula/Tambar Valhall/Hod * Full field 5

6 AKER BP ASA Great savings are possible, but requires a new way of thinking Impact on costs/efficiency 20-30% 30-50% >50% Renegotiations and cancellations/tuning of activities Cultural change in how we look at improvements and cost Revitalizing the business model radical changes Ease of implementation 6

7 CORPORATE STRATEGY Vast business potential in focusing on flow efficiency Exploration block made available License awarded Drilling decision Discovery PDO approved First oil Asset decommissioned 7-15 years AKER BP S OPERATIONAL STRATEGY a) Understand our value streams and improve flow efficiency MAXIMIZE FLOW Reduce timeline substantially by focusing on flow efficiency b) Visual progress control to always know how we re doing c) Continuous learning to continuously improve Act Check Plan Do 7

8 CORPORATE STRATEGY Visible organic growth from existing portfolio Illustrative production potential, mboepd net n Strong production base of operated assets ~80% liquids / ~20% gas n Organic growth opportunities New developments in areas with proven potential IOR potential in producing assets Near field and frontier exploration n Unique portfolio with potential to reach production above ~270 mboepd from 2023 (12% CAGR from 2016) from existing discoveries Sanctioned Alvheim Boa Boa infills 2017 Bøyla Gina Krog Hanz Hod Ivar Aasen Johan Sverdrup* Oda Skarv Tambar/Tambar East Ula Valhall Vilje Viper-Kobra Volund Volund infills 2017 Non-sanctioned Alvheim area infills/sidetracks Caterpillar Garantiana Ivar Aasen upsides Krafla/Askja North of Alvheim Snadd Storklakken Tambar upsides Ula upsides Valhall upsides New field developments Upsides and tie-ins to existing hubs n High quality development projects with low break even * Including phase 2 8

9 CORPORATE STRATEGY LEAN VALUE Why LEAN? Illustrative production potential, mboepd net 300 Sanctioned Non-sanctioned 250 Creating value by moving opportunities faster by prioritizing flow efficiency New field developments Upsides and tie-ins to existing hubs

10 Board of Directors Lean Understanding 10

11 LEAN Fishing One boat: - Flow efficient - Full Transparency - Continuous learning At how many boats does «natural LEAN» disappear? 11

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13 SANDCONE THEORY Quality is a prerequisite for sustainable Improvement Cost Flexibility Speed Dependability Quality 13

14 The purpose of the Lean management training Results Driven by internal or external consultants #makeleanstick << Driven by leaders and employees Time 14

15 Basic knowledge to all employees 15

16 MANAGEMENT TRAINING Timeline Lean theory and methods Group exercises EMT EMT Day 1 EMT Exercise 1 Day Exercise 2 2 EMT Day 3 Prepare for L2 day 3 L2 Day 3 L2 L2 Day 1 L2 Exercise 1 Day Exercise 2 2 L2 Day 3 November 16 December 16 January 17 February 17 March 17 April 17 16

17 MANAGEMENT TRAINING Cross-functional groups analyzed Aker BPs main value streams Exploration block made available License awarded Discovery DG1 DG2 DG3 First oil Asset decommissioned EMT Exploration value stream Field development value stream Operations value streams (maintenance, production and modifications) 3 groups L2 Block available to license award License award to discovery Discovery to DG1 DG1 to DG2 DG2 to DG3 DG3 to first oil Maintenance value stream Production value stream Modifications value stream Decomm. value stream 10 groups 17

18 MANAGEMENT TRAINING Flow Efficiency Analysis n Mapping the time-dimension vs the functional dimension. n This makes it stronger than a normal VSM to identify flow-improvement areas. 18

19 CHANGE VISION How do we achive the LEAN transformation change vision? Creating value by moving opportunities faster by prioritizing flow efficiency Improvement initiatives LEAN way of working Critical changes from FEAs Leader driven 19

20 LEAN TRANSFORMATION PLAN AKER BP Traditional way of working Performance Management Improve! Work! Improvement Management Resource Management 20

21 LEAN TRANSFORMATION PLAN AKER BP Lean way of working Performance Management Quick adjustments / Just Do it Problem solving Improvement Quick adjustments / Just Do it Improvement Management Level 4 - Routinization Level 3 - Visualization Level 2 - Standardization Level 1 - Understanding Flow Management Quick adjustments / Just Do it Resource Management 21

22 Challenges ahead Change management Scaling Turning the organization 90 deg Prove the pudding! 22

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