Brochure_IHS Cost and Procurement Solutions Upstream Oil and Gas

IHS Cost & Procurement Solutions: Upstream Oil & Gas

Critical data, tools, and insight enabling organizations

to make more informed sourcing decisions to recognize

real cost savings

Oil & Gas Insights

Supply Chain, Procurement, and Sourcing Solutions

In a time of extreme market volatility and economic uncertainty, can

your company afford not to have critical information and insights

regarding your supply chain?

By providing timely, objective, third party information on prices, costs,

and market fundamentals, IHS delivers vital tactical or strategic

market insights that identify inefficiencies and market opportunities.

IHS Supply Chain solutions for the Upstream Oil and Gas industry

combine expertise from multiple IHS sources, including IHS CERA,

IHS Global Insight, and ODS-Petrodata, leveraging unparalleled

industry knowledge and forecasting expertise.

The combined global coverage delivers the complete cost picture for

procurement departments in the upstream oil and gas sector to help

organizations make more informed buying decisions and ultimately

deliver bottom-line savings.

IHS forecasts and analysis cover key market segments, top

suppliers, and integral commodity inputs relevant for energy

procurement professionals around the world.

Case Studies:

Oil & Gas Company Saves $10 Million

Customer Situation

A major oil and gas company was concerned about the rapid

rise in steel prices and was considering locking in prices for the

following year after a 100% run-up. Its supplier implied more hikes

were to come.

What IHS Did

IHS provided the client with insight and analysis informing them

not to panic and advised them against purchasing steel now or

forward. Given the market fundamentals, IHS expected prices to

spike temporarily and drop back down to the previous levels over

the next couple of months.

Impact

The clients accordingly delayed the steel buy and saved over $10 million on the purchase as a result of

IHS recommendations.

Global Oil & Gas Company Relies on IHS for Market Decision-Making A global oil and gas company uses multiple IHS products to better understand various market dynamics.

Their Steel Category Manager uses IHS price forecasts to understand steel trends and negotiate effectively.

The Lead Market Analyst for Upstream Projects uses IHS analysis to understand supply chain bottlenecks,

how busy the suppliers are, and sourcing alternatives.

Their Market Intelligence Group uses IHS cost and procurement services to understand cost trends in

upstream energy, supply market trends, and how they are driven by raw material trends

The Lead Analyst for Competitive Intelligence uses forecasts for labor rates, equipment, shipping,

and analysis for upstream energy-specific trends and costs.

400

600

800

1,000

1,200

Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Steel Prices Explode in 2008 (Cold-rolled sheet prices, USD per metric tonnes)

Queenlands floods hit in January

IHS called for an end-of-year retreat in March

Understand Suppliers’ Cost Structure

Tactically analyze a single buy or strategically evaluate your entire supply chain performanceGain access to commodities’ underlying cost structure, along with price movements

of their key input costs to better understand your suppliers’ cost structures.

• Performcustomizedcostanalysiswithaccesstothousandsofglobalpricesandwages.

• Constructandsavecompositereportsthattrackproductandinputcostescalation.

• Comparepricestoinputcostsandanalyzeproductivitytrendsanddemandconditions.

• Evaluatesupplierquotesandassesswhethertheirpriceisacceptable.

• Identifyandmonitorcostescalatorsforlong-termcontracts.

Chart 1: IHS Cost Model for Welded Line Pipe provides cost breakdown to help buyer’s understand their suppliers’ cost structures.

Gain Leverage in Contract Negotiations

IHS provides detailed quarterly reports including financial metrics, credit ratings, and project activity

for nearly 100 upstream oil and gas suppliers. This expertise and analysis regarding top suppliers in

the oil and gas industry allows buyers to understand their negotiating position in the market and react

accordingly during their next supplier negotiation.

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Del

iver

ies

Oil & gas project backlogs of major South Korean yards

FPSO newbuilds Semisubmersible/TLP Deepwater rigs

© 2012 IHS Source: IHS and company reports

Chart 2: IHS analysis demonstrates that planning your FPSO new build you will have to look beyond 2015 just to get a slot at the yard.

Benchmark Prices

Understand where commodity and segment prices have been and where they are goingIHS delivers benchmark prices, forecasts and analysis for the products and services that you are buying.

From FPSOs through drilling fluids to structural steel, we have what you need to identify cost saving

opportunities for your company. Our unrivalled coverage offers thousands of global benchmarks for

commodity prices, service costs and labor rates, allowing you to determine:

• Whetheryoursupplier’squoteforstainlesssteeliscost-effective

• Whethercopperhaspressuredprices10%higherforheatexchangers

• Whetherthemarketispayingmorethan$22,000/dayfora1,500HPdrillingrigonshoreChina

Covering nearly 30 market segments, IHS provides regularly updated global reports with in-depth analysis of key supplier

markets in the oil & gas industry, including supply and demand forecasts, bottleneck analysis, cost modelling and trends.

Market segments are updated every 4 months and new segments are added on an ongoing basis

• IndustryTrends

• TopsidesFabrication

• OffshoreHeavyLift

• OnshorePipelay

• FPSO/FSO

• LNGLiquefactionFacilities

• OffshoreInstallationDSV/ROVSV

• LinePipe

• FLNG

• LNG

• OffshorePipelay

• OCTG

• Floaters–SPAR,TLP,Semis…

• OnshoreProduction

• OffshoreAccommodation

• SubseaEquipment

• OilSandsMining

• EngineeringServices

• ConstructionLabour

• WellLogging

• HeatExchangers

• GasTurbines

• GasCompressors

• UmbilicalsandFlexiblePipes

• DrillingFluids

• InspectionMaintenanceRepair

• HelicopterServices

• OnshoreDrillingRigs

UCCI

Deepwater

Offshore Index

Land Index

Scenario Analysis

IHS Advisory Services are designed to help clients effectively monitor, forecast, and manage major capital

investment costs for onshore and offshore field developments

5839_0412PO

Who we areIHS is the leading information company with comprehensive

content, insight and expert analysis in key areas shaping today’s

global business landscape including Energy & Power; Design

& Supply Chain; Defense, Risk & Security; EHS & Sustainability;

Country & Industry Forecasting; and Commodities, Pricing

& Cost.

IHS Supply Chain Capabilities provide end-to-end coverage of

input costs and market segments, delivering news, analysis,

research, supplier profiles, forecasts and modeling solutions

for multiple industries around the world. IHS Solutions for

Upstream Oil and Gas procurement provide a one-stop shop

for price forecasts, cost models, supplier profiles, and market

segment analysis. In the area of energy strategy, the IHS

Services, leveraging expertise from multiple legacy brands,

including CERA, Global Insight, and ODS-Petrodata, are key

in helping decision makers anticipate the energy future and

formulate timely, successful plans in the face of rapid change

and uncertainty. Our Services are valued for their independence,

fundamental research, foresight and original thinking.

Why IHS?With a database of more than 80,000 historic prices and

thousands of price, wage and input cost forecasts, IHS offers

more coverage than any other provider in the market.

IHS has been providing forecasts of key commodity, labor,

and input costs since 1970 --helping define the purchasing

advice industry.

For more informationwww.ihs.comEmail: [email protected]

Tel: +1 617 866 5180

United States: 15 Inverness Way E. Englewood, CO, 80112, USA

A Record of Forecast AccuracyIHSExpertsAwarded“BestForecasters”againandagain.

Bloomberg Markets

•2010,NarimanBehravesh,rankedasoneoftheTop-10economists

•2009,NarimanBehravesh,rankedasoneoftheTop-10economists

MarketWatch•IHSGlobalInsight#1MostAccurateForecastforAugust2011,July2011

•IHSGlobalInsightWins2009ForecasteroftheYear

•IHSGlobalInsight#1MostAccurateForecastforJune2009,Jan2009

•IHSGlobalInsightRanked#2inTopForecastersfor2008

•IHSGlobalInsight#1MostAccurateForecastforNov2008,Oct2008

USA Today:•GlobalInsight#2RankingofTopEconomicForecasters2007

•GlobalInsight#1RankingofTopEconomicForecasters2004

Reuters:•IHSGlobalInsightranked#2forecasterinForexpollfor2009

•GlobalInsightranked#3inaReutersForexpollin2008

•GlobalInsightwinsReutersForexpollSeptember2007

•GlobalInsightwinsReutersForexpollinJanuary2006

The Wall Street Journal•GlobalInsightonlycompanytorankintheTop6foryears2003,2004,and2006