GLOBAL 5 PROGRAMME Supplier Forum Budapest November 14

GLOBAL 5 PROGRAMME Supplier Forum – Budapest, November 14, 2007 PRODUCTIVITY CENTRE Zsuzsa Gadó

I. AGENDA I. GLOBAL 5 Aims and project schedule II. What can GLOBAL 5 Programme Offer to the supplier? III. How can supplier be prepared to effectively take part in the GLOBAL 5 Programme? IV. GLOBAL 5 Challenges V. Partnership results Source: Zsuzsa Gadó, GLOBAL 5 Team

I/1. GLOBAL 5 IS A DIFFERENT, YET COMPLEMENTARY APPROACH PSO Main objective Cost savings driven mainly by volume bundling and internal idea generation Creating internal spend transparency Facilitation of integrated operations Key levers Volume bundling Harmonization of specifications Internal brainstorming Tendering Covering as many categories as possible Harvesting the low hanging fruits across all cost categories Scope Methodology Extensive internal data gathering and harmonization Parallel technical and commercial process Major focus on tendering, superficial analysis of markets Source: Zsuzsa Gadó, GLOBAL 5 Team GLOBAL 5 Efficiency improving through contacting all suppliers with new levers e. g. , clean sheet modeling, linear price performance analysis, etc. Involving selected suppliers in defining our requirements already in early phase Develop value creating long term partnerships with key suppliers Creating deep cost category knowledge Deep understanding of supplier markets and dynamics of the reviewed area Exploring TCO-concept potentials A more focused approach, focusing on all categories especially on those which have key importance Building on the data already available, analysis intensive process, focused on improving bargaining power and insight Early involvement of suppliers and potential suppliers followed by tendering to achieve benefits, if applicable

I/2. OBJECTIVES OF GLOBAL 5 Achieve measurable benefits: reduce costs, generate revenues suppliers new ideas and/or couple existing ideas into a new solution improve quality and increase efficiency Aims of GLOBAL 5 share and reduce risks minimise TCO and pursue new ways of doing business New and more focused approach of cooperation Source: NYS Procurement Bulletin and Imre Tamás -„Vezetéstudomány” Source: Zsuzsa Gadó, GLOBAL 5 Team

FIVE DIMENSIONS HAVE BEEN CUSTOMIZED TO DEFINE THE BASIC PRINCIPLES OF THE GLOBAL 5 recommendation PARTNERSHIP MODEL Description Exclusivity The level of competition among suppliers expected by MOL Group Scope Coverage of locations and technology solutions Performance criteria Duration Partner/Supplier management Approach for supplier performance appraisal Timeframe for cooperation GLOBAL 5 recommendation Full competition Individual systems Purchasi ng price focus Transaction s/projects Level of dedication/ integration of monitoring organization Source: Zsuzsa Gadó, GLOBAL 5 Team Procurement Simple procurement process (one time purchase) Rationale Full category exclusivity Multiple sites/solutions KPIs focus Rolling Dedicated full time team Partners hip Keeping multiple suppliers enables benchmarking and reduces lock-in Total range of selected outsource area is offered for the supplier Performance criteria's should cover almost every element of service with SLAs/KPIs and partnership level KPIs Some benefits can only be captured by multi-year programs (e. g. better financial timing, trainings for the MOL colleagues) Cross-functional approach to mix purchasing and technical expertise

I/4. GLOBAL 5 IS CURRENTLY IN WAVE 2 Timing of waves* 2006 2007 2008 Ap May. Ju Jul. Au Sep. Oct. Nov. Dec. Ja Fe M Ap May. Ju Jul. Au Se Oc r. n. g. n. b. ar. r. n. g. p. t. Roadshow Current phase Pilot Wave 1 Wave 2 Wave 3 Wave 4 Key aim is to identify long-term partnership agreements with the selected suppliers 1. Road transportation 2 a. Retail I. / Visual elements 2 b. Furniture 3. Process control 4. Valves 5. Electricity 6. On-site inspection 7. Well-site log. 1. IS/HP frame contract 2. Instrument related SSC services Well-site logistics (including UGGS) SSC employment in CAPEX-project execution 3. 4. 5. 6. Railway transportation High Value Project Implementation 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Source: Zsuzsa Gadó, GLOBAL 5 Team Catering IS related services 1. Partnership possibilities with EL&ME Group Electrical works Mechanical Installation General G 5 HSE services Fuel Additives Engineering Retail/Project management Drum 3. 2. 4. 5. 6. 7. 8. 9. 10. Rotating equipment Telecom services 1. 2. Water transportation /Barge 3. Building operation 4. Civil construction 5. Upstream(TBD) 6. Refining catalyst 7. Environmental protection services I. 8. General GLOBAL 5 Safety Integrity Upstream (TBD) Retail technological construction RTC rental Retail (TBD) Small trucks and personal cars leasing Mechanical materials Security defence General GLOBAL 5

II. WHAT CAN THE GLOBAL 5 PROGRAMME OFFER TO THE SUPPLIER? • GLOBAL 5 selected suppliers may enter into a long-term partnership agreement with the MOL-Group. • Suppliers may prove their innovative capabilities and readiness to cooperate with one of its key clients in a more efficient way. • Supplier’s portfolio increase possibility • Opportunity to cooperate on group level with MOL-Group • Long-term cooperation with well pre-defined contract conditions • Pre-agreed KPI-s to monitor the cooperation and delivery of GLOBAL 5 targets • Suppliers will be kept informed about MOL-Group requirements and future plans earlier • Constant and continuous contact from both sides Source: Zsuzsa Gadó, GLOBAL 5 Team

III. HOW CAN SUPPLIER BE PREPARED TO EFFECTIVELY TAKE PART IN THE GLOBAL 5 PROGRAMME? By preparing the following: ü Ideas for technical/technological improvements ü Suggestions for process rationalisation ü Information about their current and past partnership experiences ü Identification of new portfolio elements to be implemented in cooperation ü Presentation on the given industry’s market tendencies (both worldwide and, more specifically, in Central and Eastern Europe) ü Providing benchmark about their competitiveness ü Submit turnover data of previous cooperation with MOL-Group ü Key information about financial, operational data ü Proposal for KPIs (Key Performance Indicators) to be used to monitor and improve joint cooperation ü Ideas for measuring efficiency improvement Source: Zsuzsa Gadó, GLOBAL 5 Team

III/1. OPPORTUNITIES FOR CLOSER COOPERATION WITH THE MOL-GROUP Current cooperation area Possible future cooperation area Not applicable Source: Zsuzsa Gadó, GLOBAL 5 Team

III/2. ANNUAL TURNOVER WITH MOL-GROUP Year 2006 MOL Slovnaft Cost category TVK Material group No. 1 Material group No. 2 Sub-category No. 1 Sub-category No. 2 Sub-category No. 3 Sub-category No. 4 Source: Zsuzsa Gadó, GLOBAL 5 Team Services Capex Maintenance

III/3. BASE SUPPLIER INFORMATION SHEET (3/1) Source: Zsuzsa Gadó, GLOBAL 5 Team

III/3. BASE SUPPLIER INFORMATION SHEET (3/2) Source: Zsuzsa Gadó, GLOBAL 5 Team

III/3. BASE SUPPLIER INFORMATION SHEET (3/3) Source: Zsuzsa Gadó, GLOBAL 5 Team

III/4. EXAMPLES FOR KPIs TO BE USED IN GLOBAL 5 Source: Zsuzsa Gadó, GLOBAL 5 Team

IV. GLOBAL 5 CHALLENGES Source: Zsuzsa Gadó, GLOBAL 5 Team

IV/1. CHALLENGES IN LONG-TERM COOPERATION From supplier side From MOL side To meet KPI-s which evaluate cooperation Ensure competitive market conditions Maintain continuous efficiency improvement Provide continous knowledge transfer Source: Zsuzsa Gadó, GLOBAL 5 Team Challenges in partnership Achieve visible and measurable benefits Rapid understanding and adopting new and complex tendencies

IV/2. PROCESSES ARE DEFINED FOR EACH STAGE OF THE GLOBAL 5 PARTNERSHIP LIFE CYCLE Monitorin g Evaluation and Selection Termination Renewal Evaluation and Selection Required due diligence process, partly conducted with the close cooperation of the suppliers. Categories as well as the supplier itself are evaluated culminating in a Partner Management Team and EB decision Monitoring Continuous monitoring of SLAs/ KPIs and target achievement linked to corrective actions at the operative level and periodic reporting to higher supervisory levels Pre-selection of suppliers based on partnership categories each year once the next year MOL Group plan is approved Source: Zsuzsa Gadó, GLOBAL 5 Team Renewal Time extension of existing services if continued cooperation has additional benefits for MOL Group Termination Normal termination of expiring services Abnormal termination of services/ partnerships where SLA/ KPI targets are not met Operative support (e. g. data collection, process management, preparing reports for the Partner Management Team) provided by the Productivity Centre

V/1. PRECONDITIONS OF ENTERING INTO PARTNERSHIP/LONG TERM COOPERATION • Shared vision and goals among the partners • Mutual benefits and trust • Clear roles and responsibilities • Concrete, measurable objectives • Management support • Understanding the motivation and incentives of the partners • Ongoing open discussion among the partners • Transparency • Learning to avoid misunderstandings and adjustment You can fix it in the frame of GLOBAL 5! Source: Zsuzsa Gadó, GLOBAL 5 Team

V/2. SEVERAL PARTNERSHIP HAVE BEEN DEVELOPED SO FAR Dimensions of partnership models Area Partner strategic Management partnership* Level Outsourcin Partner g Management strategic partnership Level Long Partner term agreement Management Level Descriptio n Non-exclusive, focused scope, KPI driven long term cooperation with cross-functional relationship management Exclusivity No Cooperation with an expert service provider to take advantage of scale in commodity services, where switching costs are high No Category or subcategory level long term cooperation of equal partners, who have different core businesses No Monitoring Duration Manage- Potential ment categories KPI driven with purchasing price as factor 3 -5 year long Crossfunctional teams Service or subcategory, could be limited to locations and SLAs must be definied Service Level Agreement and Key Performan ce Indicator based 2 -5 year rolling Categor y or subcategory KPI driven 1 -2 year rolling Scope Location and solution limited *Partnership model has been fully developed by GLOBAL 5 Team Source: Zsuzsa Gadó, GLOBAL 5 Team Renewable Process Control ü Honeywell Emerson Yokogawa HVPI Minimal, SLAs/KPIs controlling IT Services ü HP ü Well-site Logistics Drill-Trans Dedicate d teams on both sides Valves, fittings On-site inspection Instrumentatio n related services

V/3. GLOBAL 5 RESULTS SO FAR Timing of waves* 2006 2007 2008 Ap May. Ju Jul. Au Sep. Oct. Nov. Dec. Ja Fe M Ap May. Ju Jul. Au Se Oc r. n. g. n. b. ar. r. n. g. p. t. Roadshow Current phase Pilot Wave 1 Wave 2 Wave 3 Wave 4 Key aim is to concludel ong-term partnership agreements with the selected suppliers 1. Road transportation 2 a. Retail I. / Visual elements 2 b. Furniture 3. Process control 4. Valves 5. Electricity 6. On-site inspection 7. Well-site log. Black: long-term agreement Green: partnership Red: one-year contract Source: Zsuzsa Gadó, GLOBAL 5 Team 1. IS/HP frame contract 2. Instrument related SSC services Well-site logistics (including UGGS) SSC employment in CAPEX-project execution 3. 4. 5. 6. Railway transportation High Value Project Implementation 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Catering IS related services 1. Partnership possibilities with EL&ME Group Electrical works Mechanical Installation General G 5 HSE services Fuel Additives Engineering Retail/Project management Drum 3. 2. 4. 5. 6. 7. 8. 9. 10. Rotating equipment Telecom services 1. 2. Water transportation /Barge 3. Building operation 4. Civil construction 5. Upstream(TBD) 6. Refining catalyst 7. Environmental protection services I. 8. General GLOBAL 5 Safety Integrity Upstream (TBD) Retail technological construction RTC rental Retail (TBD) Small trucks and personal cars leasing Mechanical materials Security defence General GLOBAL 5