???? HSE MS Audit ??? 2001

1. ???? HSE MS Audit ??? 2001 SIEP EP-HSE

2. Agenda • Team introduction • Background • Terms of Reference for the Audit • Audit methodology • Reporting • Schedule

3. ???? SIEP EP-HSE (Audit Leader) Team Members

4. has a systematic approach to HSE management, designed to ensure compliance with the law and to achieve continuous performance improvement; sets targets for improvement and measures, appraises and reports on performance; requires contractors to manage HSE in line with this policy; requires joint ventures under its operational control to apply this policy, and uses its influence to promote it in its other ventures; includes HSE performance in the appraisal of all staff and rewards accordingly. Group HSE Policy Every Shell company:

5. “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 HSE Performance

6. Terms of Reference • Objective • To appraise the quality and completeness of the HSE MS in ???? and the adequacy and effectiveness of its implementation • ScopeHSE MS implementation activities for all ???? Bus, and their contractors.Special attention will be given to: • Adherence to Group and Company HSE policies • Adherence to Group Minimum Environmental Expectations • Processes for the identification of HSE-related legislative requirements, their dissemination, and for confirming adherence to them

7. Audit scope • Scope continued • Identification of roles, responsibilities and competency requirements for HSE critical activities • Implementation of HSE training programmes to close competency gaps for those carrying out of HSE critical activities • Effectiveness in HSE data and document management and HSE performance monitoring • Availability and effectiveness procedures for the identification, assessment and control of all significant hazards and effects including the demonstration of ALARP • Adequacy of emergency response and contingency plans • Confirmation that findings from audits, inspections and incident investigations have been satisfactorily addressed • Adequacy of the process for preparation and validation of the HSE Annual Letter submitted to the ExCom

8. Standards • The Audit will be conducted against the following standards: • Laws and regulations of ???? • ???? policies and procedures • EP 95-0000 The Audit may also include comments on any shortfall in the above in relation to generally accepted Shell and industry standards Audit will be conducted in accordance with methodology in EP95 0130 (December 1999)

9. Policy and Strategic Objectives Organisation, Responsibilities Resources, Standards & Doc. Hazard and Effects Management Corrective Action Planning & Procedures Monitoring Implementation Corrective Action & Audit Improvement Corrective Action & Management Review Improvement HEMP Leadership and Commitment ASSESS IDENTIFY HEMP RECOVER CONTROL HSE Management System Hazard and Effects Management Process

10. Harm to people and damage to assets or environment Events and Circumstances BARRIERS CONSEQUENCES Undesirable event with potential for harm or damage Engineering activities Maintenance activities Operations activities SIEP-led Audit Focus HAZARD 1 verification that structured risk assessment has been applied to the key (HSE) risk elements of the facility or activity 2 sample whether these risks have been appropriately assessed and the correct controls have been identified 3 Sample whether these controls are adequately implemented and complied with

11. Each Finding is categorised as follows: 1. Category: People (P); Assets (A); Environment (E); or Reputation (R) 2. Severity level (from Weakness Classification Matrix): Serious (S); High (H); Medium (M); or Low (L) 3. Each Finding is assigned to one HSE MS element 4. A Finding is accompanied by the Significance and one or more recommendations to address the gap Classification of Findings

12. 123 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. Medium: Could result in perceptible and undesirable effect on achievement of HSE objectives. 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 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

13. Audit Assessment Level of concern: Specific No follow-up required by auditee’s function head (IAC member) Level of concern: Overall scope for enhancement In addition to following up correction of any High or Medium weaknesses the function head should encourage general improvement in controls awareness Good Fair

14. Audit Assessment Level of concern: Overall cause for concern In addition to following up correction of any Serious, High or Medium weaknesses the function head should take affirmative action to ensure that control standards in this area are raised Level of concern: Overall cause for grave concern In addition to following up correction of any Serious, High or Medium weaknesses the function head should satisfy the senior management team concerning affirmative action to raise control standards in this area UnsatisfactoryPoor Unacceptable

15. Revised Audit Opinion Key: F = few <20 My = many >40 FindingsMost Favourable Opinion S H M H+M Unacc. Unsat. Fair Good / Poor 0 0 0/F -  0 0 My -  0 F F -  0 F F/My My  1-2 - - -  0 My - -  >2 - - - 

16. HSE MS Self Assessment Questionnaire

17. HSE-MS Sub Element Assessment System sustained and supported by an ongoing improvement process and essentially all elements satisfied. System functioning and being verified, results being measured, key system procedures documented. System is documented, approved, resourced and being implemented with priority objectives satisfied and the majority of objectives being met. System is under development and partially implemented. 4 3 2 1

18. EP-HSE Audit Method • Audit of HSE MS, fully covering H, S and E • Sampling Process • Questionnaire based

19. Structure of Questionnaires • Generic Questionnaire (common to all HSE Audits) • Leadership & Commitment • Policy & Strategic Objectives • Organisation, Responsibilities, Resources, Contractor Management. Communications, HSE-MS Documentation, Standards & Change Control • Hazards and Effects Management • Planning & Procedures • Implementation & Monitoring • Audit • Management Review Subsidiary Questionnaire Facilities Subsidiary Questionnaire Seismic Subsidiary Questionnaire Facilities Subsidiary Questionnaire Drilling Subsidiary Questionnaire Start-Up Subsidiary Questionnaire Environment Subsidiary Questionnaire Health

20. EP-HSE Audit Method • Focus on Risk • OU Staff involved • Based on OU / Contractor standards • Bottom up Approach • Significance & breadth of findings • Assessment of the 33 HSE MS sub elements of the HSE MS Self Assessment Questionnaire (levels 1-4) • Follow up: OU responsibility • Audit of HSE MS, fully covering H, S and • Sampling Process • Questionnaire based

21. Terms of reference • Audit programme • EP95-0130 StudyDocumentation Site visit Interviews Test findings ReportFinalisation PresentFindings Drafting Editing Agree findings Audit Process Familiarisation Review & Testing Reporting

22. HSE Audit Overview • Auditors will: • operate in pairs (sometimes three) • make an appointment to see you • no surprise visits • try to make it as easy as possible • be only interested in facts, not speculation (interested in your view in how to improve) • possibly use a questionnaire in the interview • ask open ended questions • like “How ..”, “In what way…” • interview a “vertical slice” of the organization • look for the good as well as the less than adequate

23. Audit Schedule

24. End Opening Briefing