OGP background

1. Global Industry Response Group (GIRG)overview and post-GIRG contextInternational Offshore Petroleum Regulators and Operators Summit10th – 11th August 2011 Perth, Australia

2. OGP background International Association of Oil & Gas Producers • More than 70 members around the world • Integrated oil & gas explorers/producers • Small independent oil & gas companies • National oil companies • Service sector companies (associate members) • 15 national and other associations • Including API, IADC, APPEA, IPIECA, OLF, NOGEPA, IBP, O&G UK • Based in London with an EU office in Brussels

3. The GIRG response GIRG’s task To improve the industry’s well incident prevention, intervention and response capabilities. And by doing so,reduce the likelihood and impact of future well incidents. GIRG: Global Industry Response Group

4. GIRG organisation Prevention Intervention Response

5. The GIRG response cont’d Three dedicated teams developed recommendations to deliver: • Better capabilities and practice in well engineering design and well operations management • Improved capping response in the event of an incident and to study further the need for – and feasibility of – global containment solutions • Effective and fit-for-purpose oil spill response preparedness and capability

6. Well Engineering Design & Well Operations Management recommendations A 3-tier review process Promotion of human competence management systems Promotion of a culture that fosters adherence to standards and procedures Recognition of existing agreed standards – both international and national – as a baseline for industry improvements New and improved technical and operational practices for the overall governance of well construction A“two (independent and physical) barrier” policy during the life of the well

7. Implementation – Wells To deliver better capabilities and practice in well engineering design and well operations management, OGP has formed a Wells Expert Committee. It will: • analyse incident report data • advocate harmonised standards • communicate good practice • promote continued R&D

8. Progress – Wells The Committee has identified five work streams: • A global database and analysis of well control and operational events • BOP reliability and technology development • Training and competence management systems • International standards • Promotion of GIRG recommendations for implementation

9. Capping Response/Intervention recommendations The concept selection, design and development of caps and associated equipment that can be deployed internationally The concept selection, design and development of subsea dispersant hardware that can be deployed internationally Further study into the need for, and feasibility of, containment solutions Further investigation and development of procedures for specific operational issues related to the capping and containment of hydrocarbons released from a well blowout Activity is being co-ordinated with the MWC Project, OSPRAG and other equivalent initiatives

10. Implementation – Capping To deliver improved capping response readiness, the industry has formed a consortium* of nine major oil companies (BG Group, BP, Chevron, ConocoPhillips, ExxonMobil, Petrobras, Shell, Statoil and Total). It will also: • further study the need for, and feasibility of, global containment solutions; and • develop an operating model for any equipment

11. Progress – Capping Status of SWRP: • Team established – based in Stavanger, some 40 staff • Working on capping and subsea dispersant equipment is progressing well. Plan to go for tender in coming month • Further work on need for and feasibility of containment is progressing as well • In parallel, work is on-going to review possible deployment models for capping, dispersant hardware and/or containment

12. Oil Spill Preparedness & Response recommendations • Establish principles on dispersant use with key stakeholders • Reinforce the effectiveness and value of the use of surface, aerial and, in particular, subsea dispersants • Recommend how best to deploy dispersants subsea and monitor their effectiveness • Facilitate regulatory licensing for dispersant use • Evaluate alternatives for Airborne Dispersant Delivery Systems (ADDS) • Promote research that advances understanding and response methodologies and risk assessment models • Enhance existing recommended practices for in situ burning

13. Oil Spill Preparedness & Response recommendations • Verify the philosophy for Tier 2/Tier 3 response resource placement • Stress the benefits of real-time exercises to test national & industry oil spill response plans • Update the IPIECA Oil Spill Working Group “Good Practice” Series to provide a better balance for the upstream, creating an “OGP-IPIECA” Good Practice Series • Capture IT and technical advances enabling responders to benefit from a “common operating picture” • Set out best practice on mobilising, managing and integrating volunteers, civil protection, and military resources into mainstream responses

14. Oil Spill Preparedness & Response recommendations • Evaluate databases documenting oil properties – and how they change over time – looking to establish a response focused database • Set out guidelines on offshore decanting best practices • Review guidance on use of personal protective equipment in hot climates • Review techniques for surface surveillance of oil spills • Review techniques for subsea plume modelling and the potential to integrate with underwater vehicle sampling

15. Implementation – Oil Spill Response To deliver effective and fit-for-purpose oil spill preparedness and response capability, a Joint Industry Project ( JIP) is being formed. It will: • improve co-ordination between key stakeholders internationally; and • advance continuous improvements in oil spill preparedness and response capabilities

16. Progress – Oil Spill Response Status of JIP: Thirteen companies have indicated their intention to participate, with a further two expected The JIP legal agreement will be signed by the end of August 2011 Work has already started on a number of the recommendations. The first meeting of the JIP’s governance committee will take place on 20th October 2011, Singapore, alongside the OSRL board The JIP aims to hold its first technical committee meetings in December

17. Key conclusions • Action on prevention will yield the most effective outcomes • Implementation of these recommendations by OGP member companies and associate members will improve industry prevention and intervention capabilities • Rigorous adherence to standards and practices is key to prevention • With specific enhancements, current standards will be effective if applied and rigorously observed • Verification of adherence to standards and practices is essential • Analysing well incidents and sharing lessons learned are vital • An on-going commitment from the industry is required to work together for continuous improvement • Active international co-ordination and collaboration is crucial

18. Acronyms API – American Petroleum Institute IADC – International Association of Drilling Contractors APPEA – Australian Petroleum Production & Exploration Association IPIECA – The global oil and gas industry association for environmental and social issues OLF – Norwegian Oil Industry Association NOGEPA – Netherlands Oil and Gas Exploration and Production Association IBP – Brazilian Petroleum Institute O&G UK – Oil & Gas UK MWC Project – Marine Well Containment Project OSPRAG – Oil Spill Prevention and Response Advisory Group AIP – Australian Institute of Petroleum APPEA – Australian Petroleum Production and Exploration Association