xxxxxxxxxxxxx Expansion Project (Additional Compressor System) PRE-START UP AUDIT

1. xxxxxxxxxxxxx Expansion Project (Additional Compressor System) PRE-START UP AUDIT

2. Agenda • the audit team • audit objectives • schedule • recommendations • reporting

3. Team members • xxxxxxxxx Facilitator • xxxxxxx PDO xxxxx

4. HSE Performance “There must always be a gap between … aspirations and performance … But a gap between policy and performance is unacceptable” Phil Watts - Shell EP HSE Conference 22 September 1997

5. Standards • Applicable Oman laws and regulations • Group HSE policies and commitments • PDO and contractor policies, standards and procedures • Group and SIEP HSE guidelines such as EP95 000

6. Terms of Reference Scope • The scope is limited to those facilities, resources and controls necessary to operate the new xxxxxxxxx Expansion Facilities. Exclusions: • Corporate HSE issues not directly related to the new Facilities.

7. Principal Positive Findings • Journey management • The STOP initiative • HSE Plan updated during construction phase and signed. • Commissioning Plan in Place • WINPCS plus test ‘packs’ for construction and commissioning management • HEMP process for the engineering phase.

8. High Findings • No HSE Advisor is planned to be on site during commissioning. • No emergency preparedness plan in place for commissioning. • No evidence that the commissioning engineers have been assessed and meet the corporate competency standards. • There is no single change control register for the project including changes that have occurred in the field. The overview on changes is thus lacking. • Substantial completion milestone and introduction of hydrocarbons is scheduled for 9th June. This date is seen as unrealistic by many persons interviewed.

9. Policy and Strategic Objectives • No significant Findings SAQ : 2.7

10. Organisation,ResponsibilitiesResources, Standards & Docs. • Fragmented responsibility for construction activities on site. There is a lack of clarity in the roles and responsibilities from construction through to commissioning e.g. • There is no overall construction manager with responsibility to hand over completed construction activities to commissioning.

11. Organisation, ResponsibilitiesResources, Standards & Docs. • No HSE Advisor is planned to be on site during commissioning. • No evidence that the commissioning engineers have been assessed and meet the corporate competency standards. • Operations were not witnessing instrument loop checks during commissioning. • There is no company site document controller to manage key documentation such as As-builts, vendor drawings, close-out of technical queries etc. • Operators have not been trained on the operations of the new compressor. • Only one instrument commissioning supervisor was on site as against two required in the commissioning plan. • Project execution plan calls for TA-2 for discipline engineers. This is in progress but not yet completed. SAQ : 2.4

12. HEMP • No structured assessment of potential hazards for some site activities e.g. • Safe distance for personnel during hydro testing. • Construction contractor supervisor had no knowledge of the safe working load of personnel basket. • The HSE Case has not been updated to reflect the project scope in line with the requirements of CP-117. SAQ: 2.0

13. Planning & Procedures • The overview on changes is lacking. • There is no single change control register for the project including changes that have occurred in the field. • Discipline Engineers each operate their own change control system. • Construction contractor does not have a change control register. • vendor maintaining own register of field changes. • Some changes proposed in field trouble reports have not been closed out. • No emergency preparedness plan in place for commissioning (introduction of hydrocarbons) SAQ : 2.0

14. Implementation & Monitoring • No incident was recorded throughout the project despite STOP cards highlighting some unsafe acts. No proactive targets were set for the project. SAQ: 2.2

15. Audit • Audit plan in place but not fully followed. SAQ: 2.3

16. Management Review • No Findings 4.0

17. Leadership & Commitment • Some opportunity to motivate staff in a more visible way (given the excellent HSE performance) may have been missed. 2.3

18. Specific issues 1  Demonstration that HSE risks are ALARP • Design, installation, commissioning • Future operation  HSE Case Close out of audits and reviews • HAZOP close out  Fitness for purpose hardware • Constructed to design  Effectiveness of change control

19. Specific issues 2 Commissioning  Plans & Procedures  Personnel  Concurrent operations risks  Procedures  Operating, Maintenance • Availability and adequacy  Emergency Preparedness Plans  Understood and exercised

20. Specific issues 3 • Operations - plans for start-up • Organisation • Responsibilities • PDO • Interfaces • Communications • Resources & services • Personnel • Spares, consumables • Environmental compliance

21. AUDIT OPINION Few  20 Findings Many  40 Findings

22. Audit Opinion The overall audit opinion is xxxxxx Based upon there being: x High Findings x Medium Findings x Low Findings

23. ‘High’ and ‘Medium’ Actions • High: People x Asset x Environment x Reputation x • Medium: People x Asset x Environment x Reputation x Totals: High: xx Medium: xx

24. Action Items Rated ‘Low’ People: x Assets: x Environment: x Reputation: x Total xx

25. HSE MS Assessment 4 1 2 3 Leadership and Commitment  Policy & Strategic Objectives  Organisation, Responsibilities, etc.  HEMP  Planning & Procedures  Implementation and Monitoring  Audit  Management Review  OVERALL ASSESSMENT ATTAINMENT LEVEL 2.5

26. Audit Recommendations • PDO HSE Audits do not prescribe a schedule for the close-out of Recommendations • For a Pre Start-Up audit, an indication is given, in the classification of Findings of: • those that should be closed out prior to the introduction of hydro-carbons - classified (I) • those that should be closed out prior to close out of this project - classified (C) • those that are not directly related to project close out - classified (F)

27. Report Principles • Report is collective view of team • no reference to sources • whole team review whole report • facts reported are as agreed by all the team • judgements are by consensus as far as practicable • wording agreed to as to intended meaning • audit leader has casting vote in case of disagreement • where possible, root causes identified • Final draft report before team disbands • no later changes, only minor (punctuation, grammar) editing in CO • final report within two weeks

28. Report Index Chapters 1 Introduction 2 Executive Summary IncludingAudit opinion and justification 3 Findings and Recommendations Tabulated as: Finding, Significance, Recommendation Appendices

29. THE END

30. Audit Programme Sat 31/5 Opening Presentations Doc. Review Sun 1/6 Coastal Interviews Mon 2/6 Visit Site - Compile notes Tue 3/6 Return from Site Wed 4/6 Compile Report Sat 7/6 Draft Report/Final Presentation Wed 11/6 Issue Final Report

31. Audit opinions The IAC defines 4 possible audit opinions: • Good • Fair • Poor (equivalent to IAG Unsatisfactory) • Unacceptable The definitions are in terms of: • the level of concern • the inference for senior management

33. Serious: Exposes OU to a major extent in terms of achievement of corporate HSE objectives or results. High: Though not serious, essential to be brought to Management attention. Includes medium weaknesses as repeat from previous reports. Low: No major HSE impact at process level, correction will assure greater effectiveness/efficiency in process concerned. Weakness Classification Matrix A B C D E Environ- ment Repu- tation Happens several times a year in the audited OU Happens several times a year in the audited facility Severity People Assets Never heard of in EP industry Has occurred in EP industry Has occurred in the audited OU No injury No damage No effect No impact 0 123 Low Slight impact Slight injury Slight damage Slight effect 1 Minor injury Minor damage Minor effect Minor impact 2 Medium Consider- able impact Major injury Local damage Localised effect 3 High Single fatality Major damage Major effect National impact 4 Serious Inter- national impact Extensive damage Massive effect Multiple fatalities 5 Medium: Could result in perceptible and undesirable effect on achievement of HSE objectives.

34. THE END