Digital Transformation of

capital project execution

with an EPC 4.0 strategy
W – Dubai The Palm
January 23, 2019
Julien de Beer
Head of Portfolio Management

© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.

The world changed
30 October 2017

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 Owner/EPC

The Consumer World Capital Projects World

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 Owner Perspective

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Digital transformation priority – Owner Operators
Plant, Cloud and Intelligent Information
Management
TOP PRIORITY
plant digitalisation is a top
priority in the process industry

BIGGEST IMPACT
Cloud and Intelligent
Information Management has
the biggest impact

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Intelligent Information Management
Operational Insight
OPERATIONAL INSIGHT
ASSET MAINTENACE DATA • Operations
• Non-transactional data • Maintenance
• Vendor/catalogue data • Safety
• SPIR/Procurement • Engineering
• EAM/Maintenance Asset
Asset real time data and Asset
• Asset Performance Maintenance maintenance data reasonably
Management Data well defined

Engineering data is not!

Operational Insight
ENGINEERING DATA ASSET REAL TIME DATA
• Non-transactional data Asset • Transactional data
• Engineering lifecycle
Asset Real • Real/near real time feeds
Engineering
information Time Data • Sensor data
Data
• Operational technology

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What is Engineering Information?
Line Lists Datasheets
Instrument Index
Relationships / Context

1D

P&IDs Isometrics Shop Drawings

2D

3D Laser Scans 3D Models

Status information /
Maturity
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Typical EPC/Owner Operator Strategy
EPC

HANDOVER

Owner

Document Centric
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How you get it depends on your contracting
strategy with EPC…
Trusted
Engineering
Digital Asset
Information

10% 4%
Project Data Centric Document
Handover
TIC Savings Project Centric Project TIC Savings
Execution Execution

YES NO
Contracting
Strategy /
Technology
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Mandate
 EPC Perspective

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 Very Low Adoption of Technology in EPC
Level of digitization R&D investment IT spending
MGI industry digitization index, Percent of revenue spent on R&D Percent of revenue spent on IT
2015 or latest available data

7 0 1 2 3 4 5 6 7 8
ICT Consumer Software/internet
Media discretionary
Professional services 6 Banking/finance
Education
Finance and insurance
Wholesale trade Professional services
Advanced manufacturing 5 Industrials Media/entertainment
Oil and gas Telecommunications
Utilities Aerospace Insurance
Chemicals and pharmaceuticals 4 Database
Basic goods manufacturing Healthcare providers
Mining Automobile Transportation
Real estate 3
Pharma/life sciences/medical
Transportation and warehousing Utilities
Education Industrial electronics
Retail trade 2 Chemicals
& Energy Consumer products
Entertainment and recreation
Manufacturing
Personal and local services
Government 1 Retail/wholesale
Construction
Healthcare Food beverage processing
Hospitality Chemicals
CONSTRUCTION 0 Construction
Agriculture and Hunting 2006 2007 2008 2009 2010 2011 2012 2013 Energy

1 Based on data of top 20 E&C companies by market value Globally 2 Top 20 companies by market value
Source: McKinsey Global Institute, Capital IQ, Gartner key metrics data 2012

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EPC Business Models of the Past…

EPC 1.0 EPC 2.0 EPC 3.0

Drafting CAD Global

Table Execution
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 EPC Project Performance Issues
10 Root Causes1
External Forces
1. Increasing project and site complexities
2. Regulatory Environment
3. Informality and corruption
Industry Dynamics
4. Project teams are opaque and highly fragmented
5. Contractual structures & incentives are misaligned
6. Bespoke/suboptimal owner requirements
Operational Factors
7. Design Processes are inadequate
8. Poor project management and execution basics
9. Insufficiently trained labour
10. Under investment in tools/digitalization/innovation
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EPC – “Fragmented & Opaque” Owner
data reqts

Standards
Owner and Specs

Systems/
Systems/ Standards/
Standards/ Specs
Specs

Project Team made up of Islands Engineering Package

Partners/3rd Pty’s Vendors
Multiple Systems/Specs/Standards
Information Transactions = $ & Schedule
Constant need to translate
High risk to generate errors EPC
Systems/
Status Process Piping Civil/ Standards/
Specs

Decision making Struct Equipment

Vendors
Overhead to manage Systems/
Mech Instr Elect Standards/
Change management difficult Specs

Low Transparency

Fabricators Constructors Commissioning

Documents Managed – Data Derived Systems Systems Systems
/ / /
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved. Records Records Records
 EPC Project Performance Issues
10 Root Causes 1
External Forces
1. Increasing project and site complexities
2. Regulatory Environment
3. Informality and corruption
Industry Dynamics
4. Project teams are opaque and highly fragmented
5. Contractual structures & incentives are misaligned
6. Bespoke/suboptimal owner requirements
Operational Factors
7. Design Processes are inadequate
8. Poor project management and execution basics
9. Insufficiently trained labour
10. Under investment in tools/digitalization/innovation
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
EPC cost breakdown COST OF REWORK

5.4%
40%
Procurement
40%
Construction
of total construction cost.
The leading cause is errors in design
* Hwang et al

10% 10%
Engineering COST OF ENGINEERING ERRORS
& Design

14.2% * Love et al

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The
11 Most Problematic Deliverables

1. FEED (Front-End Engineering Design) Validation Deliverables

2. Level 3 Baseline Schedule

3. Constructability Inputs

4. P&IDs(Piping & Instrumentation Diagrams)

5. Equipment Specifications & Data Sheets

6. Maintainability Inputs

7. Vendor Data

8. Clash Detection (3D Model)

9. Piping Routing and Isometrics

10. Nozzles, Ladders, and Platform for Towers/Vessels/Tanks

11. Miscellaneous Pipe Support Drawings

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 Typical issues in Project Execution…
Change of one P&IDs need to Different Wrong Re-ordering
Pipe stress Pipe has now be updated Instrument piping/equip-
single
arrangement ment specs to

40%
calcs need to become safety and re-issued
Temperature be re-assessed cricital needed suppliers
value

40%
10%

Equipment Datasheets Insulation Planning is

Spec Insulation Wasted
need to be updated needs to be no longer
Change clashes materials
and re-issued added valid Cost Company
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved. Rework Delays Overrun reputation
EPC 4.0 Project Performance Opportunities
How to improve Productivity1
1. Reshape regulation
2. Rewire contracts (Create Collaboration)
3. Rethink Design & Engineering
4. Improve procurement & supply chain
5. Improve on site execution
6. Infuse technology & innovation
7. Reskill workers
1. Source: McKinsey Global Institute analysis

30%
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How to improve productivity?
What about an EPC 4.0 Strategy…

Drafting CAD Global Digital

Table Execution Asset
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EPC 4.0 Strategy - Digital Project Execution
Lists and datasheets are all aligned Vendor information, requisitioning and Construction planning integrated with both
with the 3D model and schematics, expediting and site material control are engineering & procurement, enabling highly
ensuring quality data centrally controlled efficient construction execution

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THE CAPITAL PROJECT ENGINEER, PROCURE, CONSTRUCT
Greenfield Handover Brownfield Maximise Return on Capital with and EPC 4.0 Strategy
Lower total cost, time and risk in capital project engineering and execution
Commissioning
& Start-up

Construction Handover Engineering & Commissioning &

Process Engineering Procure, Construct &
Design Startup
& Simulation Handover

Engineering Visualization (AVEVA ENGAGE, AR/VR, LFM)

Engineering Information Management (AVEVA NET)

Fabrication
Project Lifecycle Operations

Operator Training &

Materials, Planning,
Process Simulator Marine/Plant 3D Construction
DCS Checkout
PRO/II E3D DYNSIM &
ERM
SIMSUITE
Process
Design
Field Operator
Procurement Dynamic Simulation Drawings Contracts
Training
DYNSIM PID/DIAGRAMS ProCon
EYESIM
Plant
Design
Learning
Process Lifecycle Engineering Data Fabrication Management
SimCentral ENGINEERING BOCAD, FabTrol Systems
OWNER OPERATOR EPC CLOUD OTS

Reduce Project Execution Win more and improve Unified Unified

Risk and Total Installed Margin by 50% on Lump Sum Engineering Project Delivery
Costs by 15%. Projects.
Engineering Information Standards (AVEVA ISM + Catalog Manager)
THE CAPITAL PROJECT ENGINEER, PROCURE, CONSTRUCT
Greenfield Handover Brownfield Maximise Return on Capital with and EPC 4.0 Strategy
Lower total cost, time and risk in capital project engineering and execution
Commissioning
& Start-up

Construction Handover Engineering & Commissioning &

Process Engineering Procure, Construct &
Design Startup
& Simulation Handover

Engineering Visualization (AVEVA ENGAGE, AR/VR, LFM)

Engineering Information Management (AVEVA NET)

Fabrication
Project Lifecycle Operations

Operator Training &

Materials, Planning,
Process Simulator Marine/Plant 3D Construction
DCS Checkout
PRO/II E3D DYNSIM &
ERM
SIMSUITE
Process
Design
Field Operator
Procurement Dynamic Simulation Drawings Contracts
Training
DYNSIM PID/DIAGRAMS ProCon
EYESIM
Plant
Design
Learning
Process Lifecycle Engineering Data Fabrication Management
SimCentral ENGINEERING BOCAD, FabTrol Systems
OWNER OPERATOR EPC CLOUD OTS

Reduce Project Execution Win more and improve Unified

Risk and Total Installed Margin by 50% on Lump Sum Engineering
Costs by 15%. Projects.
Engineering Information Standards (AVEVA ISM + Catalog Manager)
PROCESS Engineering
and SIMULATION - OVERVIEW
REDUCE CAPITAL COST AND RISK
Optimise process design and performance with process
engineering and simulation
BENEFITS
• Robust and effective simulation of startup and
shutdown scenarios
• Improve plant yield and performance
• Optimise energy consumption
• On-premises and in the Cloud
KEY INDUSTRIES
Oil & Gas, Power generation, Chemicals, MMM
CUSTOMERS
Shell, ExxonMobil, TOTAL, Chevron, Jacobs, Wood,
McDermott, TechnipFMC, WorleyParsons
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Process engineering and SIMULATION
KEY SOLUTIONS
Unified Process Model Lifecycle on-premise and in the Cloud

PRO/II Process Engineering DYNSIM Dynamic Simulation SIMCENTRAL Simulation Platform

Steady-State Simulation Dynamic Simulation Steady-State, Fluid Flow and

Dynamics
Market leader in Refining Empowers Operator Training
Unified Process Model Lifecycle
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Engineering and Design - OVERVIEW

INTEGRATED ENGINEERING AND DESIGN

Maximise efficiency and collaboration between multi-discipline
teams
BENEFITS
• Unified, data-centric, platform for all discipline teams to work
on
• Automated change management
• Clash-free designs

KEY INDUSTRIES
Oil & Gas, Power, Chemicals, Pulp and Paper, MMM, Marine

CUSTOMERS
Shell, Equinor, Eastman, WorleyParsons, SNC Lavalin, Valmet, K+S
Potash, Blom
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Engineering and DESIGN - Key Solutions
Unified engineering and design on-premise and in the Cloud
AVEVA Everything3D
(AVEVA E3D) AVEVA Engineering
• AVEVA Diagrams
• AVEVA P&ID
• AVEVA Mechanical
• AVEVA Electrical
• AVEVA Instrumentation

AVEVA LFM 3D Data Capture AVEVA Information Management

• AVEVA Information Standards
Manager (AVEVA ISM)
• AVEVA NET
• AVEVA Engage
• AVEVA E3D Insight
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
THE CAPITAL PROJECT ENGINEER, PROCURE, CONSTRUCT
Greenfield Handover Brownfield Maximise Return on Capital with and EPC 4.0 Strategy
Lower total cost, time and risk in capital project engineering and execution
Commissioning
& Start-up

Construction Handover Engineering & Commissioning &

Process Engineering Procure, Construct &
Design Startup
& Simulation Handover

Engineering Visualization (AVEVA ENGAGE, AR/VR, LFM)

Engineering Information Management (AVEVA NET)

Fabrication
Project Lifecycle Operations

Operator Training &

Materials, Planning,
Process Simulator Marine/Plant 3D Construction
DCS Checkout
PRO/II E3D DYNSIM &
ERM
SIMSUITE
Process
Design
Field Operator
Procurement Dynamic Simulation Drawings Contracts
Training
DYNSIM PID/DIAGRAMS ProCon
EYESIM
Plant
Design
Learning
Process Lifecycle Engineering Data Fabrication Management
SimCentral ENGINEERING BOCAD, FabTrol Systems
OWNER OPERATOR EPC CLOUD OTS

Reduce Project Execution Win more and improve Unified Digital Unified Project
Risk and Total Installed Margin by 50% on Lump Sum Engineering Delivery
Costs by 15%. Projects.
Engineering Information Standards (AVEVA ISM + Catalog Manager)
PROCURE, CONSTRUCT and
HANDOVER - OVERVIEW
BENEFITS
• Reduce material cost
• Shorten timescales and optimise resources
• Minimise contract and obligation risk
• Manage and standardise project information
• 3D visualisation of project status

KEY INDUSTRIES
Oil & Gas, Power, Chemicals, Pulp and Paper, MMM,
Marine

CUSTOMERS
Shell, WorleyParsons, Blom, Sakhalin, Yamal, Chantier
Davie

© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.

Procure, Construct and Handover
Key Solutions Unified Project Delivery on-premise and in the Cloud
AVEVA ERM Enterprise Resource AVEVA BOCAD/FABTROL AVEVA NET/ENGAGE/ISM
Management Fabrication Information Management

AVEVA LFM AVEVA ProCon

3D Data Capture Contract Management • AVEVA Information
Standards Manager
(AVEVA ISM)
• AVEVA NET
• AVEVA Engage
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
THE CAPITAL PROJECT ENGINEER, PROCURE, CONSTRUCT
Greenfield Handover Brownfield Maximise Return on Capital with and EPC 4.0 Strategy
Lower total cost, time and risk in capital project engineering and execution
Commissioning
& Start-up

Construction Handover Engineering & Commissioning &

Process Engineering Procure, Construct &
Design Startup
& Simulation Handover

Engineering Visualization (AVEVA ENGAGE, AR/VR, LFM)

Engineering Information Management (AVEVA NET)

Fabrication
Project Lifecycle Operations

Operator Training &

Materials, Planning,
Process Simulator Marine/Plant 3D Construction
DCS Checkout
PRO/II E3D DYNSIM &
ERM
SIMSUITE
Process
Design
Field Operator
Procurement Dynamic Simulation Drawings Contracts
Training
DYNSIM PID/DIAGRAMS ProCon
EYESIM
Plant
Design
Learning
Process Lifecycle Engineering Data Fabrication Management
SimCentral ENGINEERING BOCAD, FabTrol Systems
OWNER OPERATOR EPC CLOUD OTS

Reduce Project Execution Win more and improve Unified Digital Unified Project
Risk and Total Installed Margin by 50% on Lump Sum Engineering Delivery
Costs by 15%. Projects.
Engineering Information Standards (AVEVA ISM + Catalog Manager)
OPERATOR TRAINING - OVERVIEW
BETTER AND SAFER OPERATIONS
Increase plant safety and efficiency by training operators on
normal and abnormal operating conditions, easily and cost
effectively, by using simulation tools .

BENEFITS
• Improved safety with trained operators
• Reduced cost for training
• Effective knowledge transfer within the organisation
KEY INDUSTRIES
Oil & Gas, Chemicals, MMM

CUSTOMERS
Shell, Aker Yards, ExxonMobil, BASF, TOTAL,
RIO TINTO
© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Operator Training
Key Solutions Train operators to outperform on-premises and in the Cloud
Operator Training Simulator Enterprise Wide Training Pipeline Trainer

Immersive Training
System

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 Digitalization – What’s
Being Done Today!
The Digital Twin – Supporting People

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EPC 4.0 STRATEGY

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“EPC 4.0 ROI”

1B$ Project

ROI 10% 100M$ Savings

1000% 1% 10M$ Investment
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EPC 4.0 Strategy…

DON’T BE THIS COMPANY…

© 2019 AVEVA Group plc and its subsidiaries. All rights reserved.
Julien de Beer
Head of Portfolio Management

© 2017 AVEVA Solutions Limited and its subsidiaries. All rights reserved.
This presentation may include predictions, estimates, intentions, beliefs
and other statements that are or may be construed as being forward-
looking. While these forward-looking statements represent our current
judgment on what the future holds, they are subject to risks and
uncertainties that could result in actual outcomes differing materially from
those projected in these statements. No statement contained herein
constitutes a commitment by AVEVA to perform any particular action or to
deliver any particular product or product features. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
reflect our opinions only as of the date of this presentation. The Company
shall not be obliged to disclose any revision to these forward-looking
statements to reflect events or circumstances occurring after the date on
which they are made or to reflect the occurrence of future events.

© 2017 AVEVA Solutions Limited and its subsidiaries. All rights reserved.