Asset Integrity - Process Safety

1. Asset Integrity - Process Safety Level 2 AI-PS Audit Team Training MSE4

2. Training Agenda

3. Introduction • HSE – muster • Facilities • Breaks (maybe) • Meeting rules • UOD/ UOP setting the scene LIVELINK site

4. Briefing Purpose The Level 2 AI-PS Audit Team Training is designed to ensure that there is a consistent understanding and execution of the Level 2 AI-PS audits across the five cross-directorate audit teams.

5. Training Objectives The objectives for the Level 2 AI-PS Audit Team Training are to: • Provide a common understanding of the Level 2 AI-PS cross-directorate audit methodology. • Provide understanding of the recently introduced “L3 Integrated Assurance” and relation to the AIPSM L2 /L3 assurance process. • Provide a common understanding of the Level 2 protocols for the “nine AI-PS Elements” in the scope of the cross-directorate audits. • Explain the relationship between the Level 2 self-assessment and the Level 2 AI-PS cross-directorate audits. • Where to find the pre-read and Integrated Assurance evidence

6. L2 Audit Sponsors and Auditees Update schedules Overall Peer review –MSE4

7. Audit Team participants Update schedule

8. Key Dates - 2016 Level 2 Audits TBA

9. Report Peer Review • Plan time with peer reviewer to go over the findings and recommendations (day 5 morning). Rooms booked/confirmed : L2 audit. • Update schedule • Prepare presentation pack for ‘no surprise’ meeting (day 5 afternoon) • Presentation to TDG (sponsors)

10. Auditee Close out meeting • Prepare to meet with the Auditee to go over the findings and recommendations (day 5 – afternoon) • Update schedule • Finalize Audit Close out Presentation pack • Presentation to TDG (sponsors)

11. Sponsor Feedback Sunday 29th October 2017 The findings of the L2 audits will be presented by the Lead auditors to TDG. List assets

12. PDO Asset Integrity Process Safety Management (PDO AI-PSM)Assurance & Auditing Process

13. AI-PSM in PDO Assuring the safety of our people, our assets, the environment and the company’s reputation is a core value of PDO and providing assurance that we are managing our major process safety risks is a critical aspect of our corporate governance. Asset Integrity Process Safety (AI-PS) describes the way we manage our assets so that the process risk is As Low As Reasonably Practicable (ALARP).

14. Background to AI-PS Asset Integrity Process Safety (AI-PS) is the means of ensuring that the people, systems, processes and resources, which deliver integrity, are in place, in use and fit for purpose throughout the whole lifecycle of the asset. Our assets are safe and we know it. Asset Integrity Process Safety Management is a complex area of expertise covering a wide range of components, all of which are essential to ensuring systems, processes and equipment perform as required.

15. Structure of AI-PS Assurance

16. AI-PS Assurance Framework From CCPS (Center for Chemical Process Safety)

17. 9 Elements in Scope of the L2 Audit -1-

18. 9 Elements in Scope of the L2 Audit -2-

19. Integrated Assurance - UOP 1 Integrated Assurance

20. Auditing Techniques • Methodology • Conducting interviews • Audit findings • Use Audit Working Papers • Recommendations • Element Assessment

21. Audit Stages Plan audit • Terms of Reference • Audit schedule • Pre-reading • Interview list Execute audit • Execute (interviews, field visits) • Develop audit findings and recommendations • Independent peer review • Agree audit findings and close-out COMMUNICATIONS Audit wrap-up • Agree actions and action parties • Issue draft audit report • Issue final audit report • Obtain feedback on audit

22. Overview of Audit Methodology • L2 audit are conducted using PDO HSE Audit methodology. • Self-assessment against the level 2 AI-PS protocols, Plant Operating Manual and Operations HSE Case. • Implementation of AI-PS Element findings shall be classified using a “risk-based” approach. • Audit evidence will be based upon sampling (not all-inclusive). • Team members will gather information by field observation, interviews and including checks of hardware and documentation. • Verify findings to confirm the validity of recommended actions. • Where judgment is required, the result will be determined by consensus within the audit team.

23. Conducting Interviews DO: Decide on interviewing roles – one to talk, one to write. Be on time – arrive and leave as scheduled. Open with conversation, then explain the purpose. Explain that the source of information is held in confidence. Ask open questions – Who, What, When, Where, How ? Use your previously prepared interview question checklists. Summarize action items at the end & get commitment. Conduct interview in interviewee’s “space”. Thank the person at the conclusion of the interview. DO NOT: Talk excessively. Use visible checklists – keep conversational. Focus on reporting rather than listening. Pass judgment – never say you are wrong. Ask “leading” questions – keep an open attitude. Confront someone with evidence, instead ask for clarification. Assume or interject preconceived ideas. Allow the interview to digress or ramble-on. Interview in the presence of supervisor.

24. Audit Findings Classification • Classification of the audit findings shall be in accordance with the Risk Assessment Matrix and/or the Rating Level table below • The RAM will not be applied for any legal or regulatory compliance findings. The latter are given a Compliance (C) rating. • The primary rating for each finding is the adequacy of the control for the risk against the expectation set in the relevant PDO AI-PS Element Guides (professional judgment of the audit team).

25. Risk Assessment Matrix

26. Example Finding/Observations (gaps in controls): • HAZOP & IPF for facilities drawings (as-built/retrofit) have not yet been carried out. • The latest FERM for Plant X is from 1999. Plant X facility has changed considerably since first construction, with significant increase in production, compressors for gas lift, many new flowlines & other equipment have been added. • Fire water system on Plant X not is fully operational and Foam system (pumps) for floating roof tanks not connected. Project started to design new ring main, monitors, foam system, etc. Confirmed project plan for this activity was not provided to audit team. Rating: HIGH • The lack of fire response facilities at both Project X locations can have significant impact on these production facilities.

27. Writing Audit Working Papers (AWP) Challenge and verify evidence • Review interview notes and field observations. • Corroborate evidence (interviews, observations, documentation review). • Substantiate “opinions and perceptions” with evidence • Determine the “system failure” from the evidence • Combine issues / evidence to develop findings. • Seek further clarification as required. Use the AWP template: • Use clear and short sentences – avoid linking ideas with “and”. • Record your field observations from interviews the + and – in one box, together with underlying causes • Develop the finding(s) once you have gathered enough evidence through observations an you have addressed the underlying causes • Each finding must be a stand-alone fact – no opinions or hear-say is allowed.

28. Example Working Paper

29. Making Recommendations • Stand Alone, Clear & Concise • Definitive when read in isolation • Not longer than three lines • SMAR(T) • Specific - sufficiently specific to ensure that deficiency will indeed be remedied • Measurable - must be able to define completion • Achievable - must be possible • Realistic - should be fit-for-purpose • Time-based - timeframe not included in audit report - to be decided by Auditee • Motivational • Start with an active verb - verify, issue, revise, remove, provide, install, define or appoint • Avoid - consider, coordinate, ensure, initiate, monitor, supervise

30. Overall Assessment and Audit Rating • No audit opinion will be provided. • Assessments of the implementation of the AI-PS Elements will be indicated by reference to three possible categories. • Further qualitative description will be provided as part of the Summary and Conclusions, to summarize the overall outcome and highlighting the AI-PS Elements where findings are identified.

31. Control Assessment Matrix

32. Role of the Peer Reviewer • Review the draft audit close out presentation against the TOR of the audit and provide advice to the audit team leader, as necessary. In particular, focus on: • Scope of the audit. • Are the audit findings clear and at the right level of detail, e.g. appropriate for a Level 2 audit? • Are the recommendations SMART? • Ensure High and Serious findings are provided with evidence and sound motivation

33. Audit Deliverable • The key deliverable of an AI-PS Level 2 audit is the Close out Presentation and Audit Report, written on an exception basis to include: • The classification of Audit Findings based on the RAM or the Rating Level table. • The overall Control Acceptability Assessment for each risk control area in line with twenty elements of the CCPS Process Safety framework, which will be reflected in the Control Acceptability Matrix (CAM). • Recommendations with agreed actions, action parties & due dates aimed at remediation of the control weakness identified in the Audit Findings.In practice: Asset assigns action party and determines due date.

34. Audit Follow-up • Draft report with findings and recommendations available at Closing Presentation. Only formatting and minor editorial changes will take place before the report is published. • Auditee with follow-up co-ordinator will review the recommendations and propose actions, action parties and target dates. • Lead auditor will finalize report after the auditee identifies and agrees actions, action parties and target dates, and will load the actions into PIM.

35. Audit Reporting Templates All audit material available at: Livelink – Team Workspace – Health, Safety, Environment MSE – Technical safety –AI_PS Assurance http://sww3.pdo.shell.om/livelink/livelink.exe/Open/26627087

36. Nine ElementsDetailed Discussion

37. Nine Elements Overview Out of the 20 CCPS elements, 9 elements have been selected to be used for the Level 2 audits. Group A (engineering & contractors) • (E2) Compliance to engineering standards • (E6) Process safety knowledge • (E7) HEMP • (E11) Contractor management Group B (operations) • (E8) Plant operating procedures • (E9) PTW • (E10) Technical integrity • (E13) MOC • (E15) Conduct of operations

38. Element 2Compliance with engineering standards Focal point : (UOI)

39. GU-611 - PDO Engineering Standards and Procedures • Details the current Technical Standards and Procedures requirement for all PDO Projects and Engineering Modifications. • Includes mandatory (CP, SP, PR & Shell DEP’s) and non-mandatory (GU) elements • Revised every year • Generally not retrospective – i.e. a plant is designed to the standards current at that time, however any further modifications must be to the latest standards • Exception PSBR (DEM-2) requirements are not listed

40. Technical Standards Variance • Technical Standards may be challenged via PR-1247 ‘Project Change Control & Standards Variance Procedure’. Variance requires approval by the appropriate CFDH TA-1 authority. • If the variance is to a DEM-1 AI-PSM requirement (designated in standard by SHALL [PS]) then a ‘Derogation’ is required that requires a supporting ALARP demonstration to be approved by the relevant CFDH (TA1). • All variance applications should use the Variance Tracking Tool application (VTT)

41. PSBR’s Process Safety Basic Requirements (DEM-2) DEM-2 deals with preventing (not repeating) known incidents that have occurred. PSBR 1Safe Siting of Occupied Portable Buildings PSBR 4Permit to Work PSBR 5Management of Change PSBR 6Avoid Liquid Release to Atmosphere PSBR 7Avoid Tank Overfill Followed by Vapour Cloud Release PSBR 8Avoid Brittle Fracture of Metallic Materials PSBR 9Alarm Management PSBR 10Sour Gas (H2S) Retrospective requirement Mixture operating procedures & retrospective engineering design requirements Change Management Siting Portacabins Relief to Atmosphere Tank Overfill Protection Brittle Fracture Alarm Management

43. Typical Audit Questions • Have applicable codes & standards for relevant projects / modifications been identified and documented? • Does the workforce (Especially TA-2’s) understand this requirement and are the relevant codes and standards easily available to those who need them? • Are variances to codes, standards and project specifications controlled in accordance with PR-1247? Have any deviations/derogations been requested and is the approval documented? – Check Variance Tracking Tool • Have facility Technical Authorities (TA-2s) been trained in the codes and standards requirements and are competent to execute the requirements? • Are contractors familiar with the codes and standards that govern their work? • Status of Assets PSBR (DEM-2) compliance? • Is PCAP available c/w Discipline Authorities Manual?

44. Element 6Process Knowledge Management Focal point : (UOI)

45. Aims & Objectives of PSK • The understanding of risk and the correct assessment of risk can only be done with accurate process safety knowledge • Process Safety Knowledge primarily focuses on information that can easily be recorded in documents, such as: • Written technical documents • Specifications • Engineering drawings • Calculations • Specifications for design, fabrications and installation of process equipment • Materials safety data sheets (MSDS) • Development and documentation of process knowledge should start early in the asset lifecycle (i.e. during design) and continue throughout the life cycle of the asset or process.

46. Process Safety Knowledge – Diagrams • Process Flow Scheme (PFS & PSFS) • Utility Flow Scheme (UFS) • Process Engineering Flow Schemes (PEFS) • Utility Engineering Flow Schemes (UEFS) • Cause and Effect matrix • Hazardous Area Classifications • Area Layout including, foundation, instrument , electrical, OHL. • Site plan (sub-field layout) - General arrangement drawings for piping, electrical, civil, instruments • Key Plan and Plot plan • Escape Routes Plan. • Safety Equipment Layout. • Critical Valve List (including locked open and locked closed valves) • Fire and Gas layouts • Electrical - Single line diagram • Instrumentation - List of alarms and trip setting • Wiring Diagrams including ICTDs, FLDs FCS/DCS configuration diagrams

47. Process Safety Knowledge – Documents • Process Safeguarding Memorandum • Operating Procedures including Standing Orders • Asset HSE Case • List of Safety Critical Elements (SCEs) with their Performance Standards (in the Computerized Maintenance Management System, CMMS) • SCE inspection program and preventive maintenance routines (in CMMS) • SCE maintenance history (in CMMS) • Alarm catalogue • HAZOP reports • Emergency Response Plan

48. Element 7HEMP Focal point : MSE4

49. Background to HEMP • The Hazards and Effects Management Process (HEMP) provides a structured approach to managing the hazards and potential effects of PDO’s activities. • There are numerous techniques to carry out HEMP, and the technique chosen should be aligned to the scope of work, risk scenarios in that work, etc. • Effective application of HEMP involves four steps: identify, assess, control, and recover, and all steps will generate records. The aim is to ensure that risk levels are tolerable and reduced to As Low As Reasonably Practicable (ALARP).

50. Scope of HEMP • The scope of HEMP applies to all PDO assets during all phases of the facility lifecycle (design, commissioning, start up, shutdown, operations and decommissioning) and through day-to-day operations to ensure that hazards are identified and risks are managed to a level that is demonstrably tolerable and ALARP. • Specifically, the following types of HEMP are within scope: • Design Integrity Reviews • Risk assessments supporting Process Safety Basic Requirements (DEM-2) • Operations HSE Case • HEMP in projects and FCPs • Operational risk assessments (MoC, FSR, etc)