Shell UAD OPS0077-Temporary Equipment

1. Shell UAD OPS0077-Temporary Equipment Use this area for cover image(height 6.5cm, width 8cm)

2. Agenda

3. Why are we here? • Why do we need a Temporary Equipment Standard? -The Increasing frequency of hydrocarbon gas releases in conjunction with electrical audit findings in recent years means increased exposure to fire and explosion events. -An ALARP study conducted by Shell in 2001 confirmed a high risk of gas ignition from temporary equipment. Temporary Equipment such as diesel engine skids, pumps, electrical equipment, etc. have many sources of ignition, and barriers to control these ignition sources needed improvement. -An alarming number of gas ignition events have occurred in our industry with great loss of life. The following list is short and covers the more notable events, however the list of gas events with ignition is virtually endless.

4. History of gas ignition disasters: • Piper Alpha 1988 -168 deaths- $3.4B in asset damage • C.P. Baker Drilling Barge 1964- 22 deaths1st major offshore diaster in world • Perforadora Central Usumacinta Jack-Up 2007 -10 deaths-18 missing (unknown status) • Mumbai (Bombay) High North 2005- 11 deaths-11 missing- total loss of asset • Bombay High India 1999- 22 -$195MM- total loss of asset • Steelhead Platform Marathon 1987- 300ft fire, extensive damage to new asset • Lake Maracaibo, Venezuela 1993- 11 deaths- $122B total lost revenue • Gulf of Mexico, USA March 19, 1989- 7 deaths- ARCO Platform B total loss • Enchova Central Offshore Brazil 1988- 42 deaths- $461M damage/ clean-up • Petrobras P36 Offshore Brazil 2001- 14 deaths- total loss of asset (SEMI sunk) • GSF Adriatic IV Jack Up Egypt 2004- Total loss of asset- fire more >7 days

5. These requirements are not new and are required by these regulatory bodies (BOEMRE, API 14F, NEC 500, Etc). Due to recent events in the industry regulators are more focused on elimination of  ignition sources from temporary equipment • Ask yourself how effective are the barriers you’ve been using to control ignition sources from temporary equipment. Do all personnel at your location have awareness knowledge of this REAL hazard? What do I mean by REAL hazard? From Jan 08 till July 08 our industry averaged one gas release per week!

6. If an incident happened tomorrow, how motivated would you be? We need that motivation now, be proactive by taking ownership in this standard

7. Temporary Equipment Standard Intro and Review • Temporary Equipment Standard • Temporary Equipment Checklists (4) • Associated Documents • Temporary Equipment Website

8. Temporary Equipment Standard- How do I get a copy? • UA Contractor website (www.uacontractor.com) • Standards/ Procedures/ Guidelines Section (top right pane) • Contact Kevin Hoffman (985 628 6099) to gain access to S/P/G section • Drilling/ Production Matrix • Shell C&P Rep • Shell CSMP Rep • Shell Internal: UAD Standards page / Temporary Equipment Website

10. Temporary Equipment: What to expect • T.E. Standard and Implementation Plan: • ROBUST ONSHORE SCREEING: • Dedicated Electrical Inspector joined TE implementation team (Perry Scioneaux) • Built curriculum and conducting Skilled level training (offshore inspectors included) • Will be part of numerous 3rd party inspections as support for OTC (3rd party) • T.E. Standard has been Signed by UAD and Wells Organization (18-Nov-2010) and published for implementation. • Focal Points for Producing / Developing assets have been NAMED and communicated to. • SOU Training Profile created for FPs • Drilling to be included in Focal Point training (each rig to supply FPs) • Training Modules Completed (Knowledge and Skilled CBTs) • Multiple Training Session Conducted with OTC (face-to-face; over the shoulder training/ support continues)

11. Changes (cont.) • Focal Point Training • FPs will be required to obtain Knowledge-Level training – CBT • Inspector Training • Skilled-level CBT required for offshore inspectors • Inspections/ Function Testing • Function Testing will take place @ vendor’s yard with 3rd party inspector present • Commissioning-type function tests will still be required of the Offshore Inspector (Fire & Gas, ESD, Grounding, etc…) – NOT NEW • Temp Equip Website

12. Reasons for manning Temporary Equipment: • Equipment doesn’t meet Regulatory or Area Classification requirements • Equipment does not provide required fire & gas detection • Equipment does not accept required ESD shutdown • MOC required for each TE: • Required MOC be requested and approved for each piece of TE • MOC will have marked up GA drawings depicting the lay down area of the TE. • Temporary Equipment Time Requirements • all TE on-board for more than 45 days has to have a new checklist filled out and inspection conducted. • After 60 days, the GA/ Elec. Class drawings for your location must be updated to reflect the TE.

13. Temp Equipment Focal Points

14. Sustainability • Q2 – Spot Audit: Perry Scioneaux to conduct offshore spot audit (s) to gauge implementation / compliance. • Local Audit Process: Temporary Equipment has been added to the asset Local Audit Process (LAP) which is cyclical and conducted annually. Temporary Equipment is slotted for the 4Q. (Fabre) • Audits (M&I Standing Audits/ Independent Audits) • Internal Audit team (Doyle Galloway) as a subject/ topic for focused/ internal/ independent audits. • Will train auditors on requirements of TE. Will also be a major topic of Electrical Hazardous Location (HazLoc) audits.