SAFETY AND ENVIRONMENTAL MANAGEMENT SYSTEMS

1. SAFETY AND ENVIRONMENTAL MANAGEMENT SYSTEMS Final Rule January 14, 2011 David NedorostekBureau of Offshore Energy Management Regulations and Enforcement **1/20/11 - Revised by M.G. Bell to include E&P Operators’ SEMS initiatives**

2. Today’s Discussion…. • Safety and Environmental Management Systems (SEMS) FINAL RULE • HIGHLIGHTS? • Contractor Selection Criteria • Auditing Requirements 2. Key SEMS Elements - 13 elements in API RP 75

3. General – Principles & Scope Safety & Environmental Information Hazards Analysis Management of Change Operating Procedures Safe Work Practices 7. Training 8. Mechanical Integrity 9. Pre-Startup Review 10. Emergency Response & Control 11. Investigation of Accidents 12. Auditing the Program 13. Records & Documentation API RP 75 – 13 Elements

4. SEMS Current Status • Mandatory • Companies are required to develop and implement their own SEMS • Based on API RP 75 (SEMP) • BOEMRE released ANPR (2006) • NPR released (2009) • Partial SEMS (4 Elements) • Final Rule released (2010) • Comprehensive (13 elements) • Effective 11/15/2011

5. SEMS - Points of Interest • Applications • All operations • All structures • Fixed, floaters, MODU • Program approval not required • Lessee needs to have SEMS plan developed, implemented and available upon request • Add on to existing BOEMRE regulations • Must be model after RP75

6. SEMS – Who does what? • Lessee develops program • Lessee or I3P audits program • 2 years from the initial implementation of the SEMS program and at least once every 3 years thereafter • Lessee notifies BOEMRE at least 30 days prior to conducting audit • BOEMRE may participate in your audit • Lessee submits audit report to BOEMRE w/in 30 days of audit (includes deficiencies & corrections) • BOEMRE may conduct its own audit or evaluation of your SEMS

7. SEMS – Audit Requirements? • Operator can use either • I3P or Designated and qualified personnel • Comprehensive audit (13 elements) • Audit plan - API RP 75 section 12.1 thru 12.4 • Submit plan to BOEMRE - 30 days before audit • BOEMRE may modify facility audit list • Submit audit findings/conclusion- 30 days after audit completion date • Outline the results of audit • Deficiencies identified • Correction plan

8. SEMS – Audit Requirements? • Correction plan must identify • Schedule to correct deficiencies • BOEMRE notifies lessee w/in 14 days • Person responsible with job title • BOEMRE may do a follow-up to verify corrective actions have been undertaken

9. BOEMRE – Directed Audits • Lessee must hire I3P to conduct audit • I3P must meet requirements listed in Subpart S • I3P submits findings to BOEMRE within 30 days of audit • Lessee responsible for all costs • If BOEMRE conducts audit in lieu of I3P • BOEMRE will provide lessee a report w/in 30 days of audit • Lessee must submit corrective action plan within 30 days of audit completion

10. Contractors* • Applies to contractors performing maintenance or repair, turnaround, major renovation, or specialty work • Lessee responsibilities: • ensure contractors have the skills and knowledge to perform their assigned duties • ensure that contractors have their own written safe policies and procedures. • provide upon request the evaluation conducted to verify that contractors are skilled *These requirements do not apply to contractors providing domestic services to the lessee or other contractors. Domestic services include janitorial work, food and beverage service, laundry service, housekeeping, and similar activities.

11. Contractor Selection • Lessee SEMS program must have procedures in place for selecting and evaluating a contractor • Lessee must make the following available to BOEMRE upon request: • Documentation • Contract employee’s evaluation/verifications • Contractor’s safety policy and procedures • Contract employees expertise • Can use Subpart O requirements for well control and production verification • Contractor is not required to have a SEMS.

12. HAZARD ANALYSIS (HA) • Facility level HA • HA to be conducted by qualified personnel • HA findings and recommendations need to be in a written report • Task level JSA • JSA to be conducted for each activity and be maintained on facility

13. MANAGEMNT OF CHANGE (MOC) • Facility/MODU is subject to continual and temporary changes • equipment, people, procedures • Any of these changes can introduce new hazards to the operation which can impact safety

14. MOC TRIGGERS • Equipment and Procedural Changes • new equipment installation • use of temporary cranes • equipment modifications • well stream changes • Personnel Changes • company mergers • personnel vacancies, crew rotations • contractor changes • MOC should be written and include link to HA

15. OPERATING PROCEDURES • Written procedures for each activity in your SEMS (lifting, drilling, production….) • Address activities from start-up to shut down • Changes in operating procedures need to be reviewed in context of your MOC • Accessible to all affected employees • Reviewed and updated as needed to keep current

16. MECHANICAL INTEGRITY • Purpose – assure equipment is designed, procured, tested, built, inspected, monitored & maintained in a manner appropriate with service requirements and manufacturer recommendations

17. SEMS Rule II • SEMS Proposed Rule may require operators to develop and implement • stop work authority, • ultimate work authority, • employee participation program • whistleblower protection

18. SEMS Rule II • Additional requirements for conducting job safety analysis (JSA). • Only I3P will conduct audits (not designated and qualified personnel)

19. SEMS Workshop • 3/15/11 @ the Hilton New Orleans Riverside, Jefferson Ballroom, 3rd Floor • Discuss SEMS Final Rule Requirements • Discuss Frequently Asked Questions • Will be announced in Federal Register in late January

20. What are the Operators doing to address SEMS ? • Internal Gap analysis of current management systems vs SEMS • API RP75 Audit Task Force (develop standardized SEMS audit tool) • Revision of Standardized Safety Questionnaires • Explore the following options: • Expand SafeGulf curriculum to include competency training • Create SEMS qualifying programs similar to DOT OQ qualifying programs • Add SEMS related questions to safety questionnaires

21. Proposed New SSQ Questions Does your company have a program to determine and document the competences for personnel? • If yes, does it include: • a. Job classifications • b. Required skill sets for each classification • c. Required training for each classification • 1. Operating procedures • 2. Safe work practices • 3. emergency response • d. Fit for work requirements • e. Methodology to determine competency

22. Proposed New SSQ Questions Does your company have a fully implemented HSE Management System (Safety Environmental Management Plan) appropriate for the services provided? If yes, does it include: a. Is it certified by a third party b. Is it written to conform with an international standard: 1. OSHAS 18,001:2007 2. ANSI Z10 3. API RP 75 4. Other _____________

23. DISCUSSION - Open for Questions -

24. Contact Information Please Submit questions Email – David.Nedorostek@boemre.gov Phone (703) 787-1029