API Q2 for the Petroleum Natural Gas Industry

API Q2 FOR THE PETROLEUM & NATURAL GAS INDUSTRY

Learning Outcomes By the end of this learning event, you will be able to:

• Summarize the events that led to the development of API Spec Q2. • Discuss the operator and service provider business drivers. • Explain how the industry responded to the specification. • Summarize API Q2 with a brief overview. • Brief overview of results from data being collected over the past 2 years.

WHAT WERE THE DRIVERS THAT LED TO API Q2?

TG5 formed prior to the Macondo Incident for the development of API Q2 to Reduce NPT.

Activity 1: API Spec Q2 Controls

DISCUSSION POINT! How do you think the requirements called out in API Q2 can help mitigate the risks of such incidents from occurring?

OPERATOR BUSINESS DRIVERS

Your Trusted Advisors in the Oil and Gas Industry

Inconsistent Global Quality

Reasons for Inconsistent Controls • Absence of a corporate management system

• Failing to implement the management system • Application inconsistency • Partial compliance • Lack of corporate oversight

Activity 2: Top 3 Causes of NPT

DISCUSSION POINT! What do you think the top 3 causes of NPT is according to Service Supply Organizations internal investigations and root causes provided to the operators?

Activity 3: Root Causes of NPT Service execution planning Competency / Training Lack of procedures Not following procedures

Lack of using history logs No contingency planning Lack of inspection/ test Lack of a Preventive Maintenance, Inspection, Test Programs (PMITP)

The root causes for NPT are within the Service Providers control, according to their own internal investigations!!

Service Supply Organization Business Driver BEFORE

AFTER

100 Employees

100 Employees

Results of Actual Beta Test Site after 12 months of concentrated on API Q2 implementation.

Business Drivers: Government-Related Protection of:

Protecting our Community

Protecting our Environment

Protecting our Marine & Wildlife

Protecting our Workers

INDUSTRY RESPONSE

API Subcommittee 18

CSOEM

SC1 8 TG1

TG2

TG3

Auditor Effectiveness

API Spec Q1

Monogram Program

TG4 Min. Mfg. Requirements

TG5

TG6

TG7

API Spec Q2

Welding

Life Cycle Management

Evolution of API Spec Q2

DEVELOPED

PUBLISHED

BETA TESTING

CONFORMANCE

COMPLIANCE

COMPLIANCE

2015

API Spec Q2 was developed in 2010 through 2011.

API Spec Q2 was published in December 2011.

A combination of operators and service providers participated in the beta test.

Service providers start getting their QMSs in compliance with API Spec Q2.

Service providers may apply for Certification.

TO PRESENT

INDUSTRY EXPECTATION IS CONFORMANCE & COMPLIANCE NOT CERTIFICATION

Benefits of Standardization

Consistency Risk mitigation Improved communication Reduction in NPT & Injuries Identification of critical aspects, impacts and controls

Efficiency improvements

SPECIFICATION OVERVIEW AND EXCLUSIONS

WHAT IS THE SAME? WHAT IS DIFFERENT?

Your Trusted Advisors in the Oil and Gas Industry

Similarities: API Spec Q1 and Q2

Differences: API Spec Q1 and Q2

ISO 9001 and API Q1 have always permitted a service organization to exclude design. API Q2 does not permit this exclusion to any organization claiming compliance to the specification.

Exclusions

“When an organization performs activities addressed by this document, including the provision of service-related product, all requirements shall be performed and no claims to exclusion of those requirements shall be permitted.”

1.2 Exclusions

3.1.16 Service-Related Product Materials, equipment, and software used in the execution of a service.

WHAT API Q2 SPECIFICATION IS AND IS NOT

Your Trusted Advisors in the Oil and Gas Industry

3rd Party Certification

What API Spec Q2 is Not

What API Spec Q2 is

It is about risk mitigation, service quality, and SRP reliability, that is supported by validation and performance.

COOPERATION, IMPACTS & RESULTS

API Q2 Cooperation

IMPACTS

RESULTS – 2014 to Present

Average of 40% Reduction in NPT • Segments, Service Lines & Product Lines Implementing • Normalized – Downturn Average of 24% in Safety Improvements • Reduction in Injuries Average of 26% Improvement in Efficiencies Average of 39% COPQ Improvement • Rework, Scrap • Delays due to Planning • Supplier Improvements

QUESTIONS?

Your Trusted Advisors in the Oil and Gas Industry