STANDARDIZATION OF INDUSTRY
EXPECTATIONS FOR OIL AND GAS
Stacey W. Hagen
ExxonMobil Development Company
Drilling Services & Systems Team Lead
API Sub-Committee 18 Chairman - Quality
Bo Creek
Orion Drilling Company
Quality Assurance / Quality Control Manager
API SPEC Q2 FOR AUDITING
AGENDA
Objective
– Provide History and Industry Expectations on API Q2
Outline
– Brief History of API
– Business Drivers for New Industry Standard – API Q2
– API Q2 Overview
– Benefits
API SPEC Q2 FOR AUDITING
BRIEF HISTORY
API SPEC Q1
API SPEC Q2 FOR AUDITING
History of API and Spec Q1
• July 28, 1914 – November 11, 1918
• National Petroleum War Services Committee
• Pooling Program
• 1919 – American Petroleum Institute
• Program was transitioned into a third party audit
program in the mid 1980’s under the Specification
of Quality Programs, API Spec Q1 that is now in its
9th Edition
• Just as there were drivers for the Monogram
Program, one now exists for the certification of
services
API SPEC Q2 FOR AUDITING
BUSINESS DRIVERS
FOR API SPEC Q2
API SPEC Q2 FOR AUDITING
BUSINESS DRIVERS
Absence of a Corporate Management System
Inconsistency in Risk Mitigation
Lack of Implementation
Lack of Oversight
API SPEC Q2 FOR AUDITING
BUSINESS DRIVERS
Increasing complexity of wells
• Need for improved service technology and
equipment / tool reliability
Increasing spread rates on rigs
• Need for systems to ensure uninterrupted
operations
API SPEC Q2 FOR AUDITING
BUSINESS DRIVERS
Service centers have more than one
customer
• Additional requirements typically
specified by one or two customers
• A customer may only be 10% of total
business
• Implementation / compliance of
requirements only 10% of the time is
next to impossible
API SPEC Q2 FOR AUDITING
BUSINESS
DRIVERS
Perception
The
incident killed
11 workers- and
spewed more than 200 million gallons
of crude in what is touted as the
country’s worst oil spill ever.
Subsequently, a moratorium was
imposed on offshore drilling.
API SPEC Q2 FOR AUDITING
ROOT CAUSES OF NPT
LACK OF:
Service execution
planning
Lack of using history
logs
Personnel
Competency
Contingency
planning
Lack of or not
Following
procedures
Quality Checks,
Inspection and Test
Preventive Maintenance, Inspection, Test
Programs (PMITP)
API SPEC Q2 FOR AUDITING
INDUSTRY
RESPONSE
API SPEC Q2 FOR AUDITING
INDUSTRY RESPONSE
• Realization that ISO 9001 , ISO TS29001 and API
Spec Q1 apply to manufacturing
• API Task Group (TG) 5 developed under API
SC18
• Specification for QMS Requirements for Service
Supply Organizations
• Identify the expectations for execution of
upstream services including well construction,
intervention, production and abandonment
• Published December 15, 2011
API SPEC Q2 FOR AUDITING
API SUBCOMMITTEE 18
CSOEM
SC18
TG1
TG2
TG3
Auditor
Effectiveness
API
Spec Q1
Monogram
Program
TG4
Min. Mfg.
Requirements
TG5
TG6
TG7
API
Spec Q2
Welding
Life Cycle
Management
API SPEC Q2 FOR AUDITING
API TG5 MEMBERS
API SPEC Q2 FOR AUDITING
API SPEC Q2
HOW IS IT DIFFERENT?
API SPEC Q2 FOR AUDITING
PROCESS-BASED QMS (ISO 9001, 29001 & API Q1)
API SPEC Q2 FOR AUDITING
PROCESS- AND RISK-BASED QMS (API Q2)
CUSTOMER
REQUIREMENTS
CUSTOMER
SATISFACTION
CONTINUAL
IMPROVEMENT
INPUT
OUTPUT
API SPEC Q2 FOR AUDITING
OVERLAP - API SPEC Q1 VS. API SPEC Q2
General Requirements
Control of Monitoring and
Measurement Equipment
Quality Manual
Control of Documents &
Records
Measurement, Analysis
and Improvement
Training
Quality Policy
Quality Objectives
Corrective and Preventive
Action
Planning
Management Review
API SPEC Q2 FOR AUDITING
SERVICE-SPECIFIC Additions - API SPEC Q2
No Claims to Exclusions
Preventive Maintenance, Inspection and
Test
Competency of Personnel
Service Performance Validation
Risk Management
Management of Change
Detection Equipment
Service Design
Corrective and Preventive Action
resulting in a change of controls
Contingency Planning
Customer Notification
Control over Critical Suppliers
Traceability of Critical Services and SRP
Service Quality Plan
API SPEC Q2 FOR AUDITING
Elements Requiring Procedures
•
•
•
•
•
•
•
•
•
•
•
Personnel Competency / Training
Document Control
Control of Records
Risk Assessment
Service Design
Contingency Planning
Purchasing
Verification of Purchased Services &Service
Related Product
Execution of Service
Identification & Traceability
Service Related Product Status
•
•
•
•
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•
•
•
•
•
•
•
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Customer Property
Preservation of Service Related Product
PMIT
TMMDE
Service Performance Validation
Nonconformities
Management of Change
Monitoring, Measuring & Improvement
Internal Audit
Analysis of Data
Improvement
Corrective Action
Preventative Action
API SPEC Q2 FOR AUDITING
1.2 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.”
Service-related products (SRP): Materials, equipment, and software
used in the execution of a service.
API SPEC Q2 FOR AUDITING
4.3.2 PERSONNEL COMPETENCE
Competency =
• Education
• Training
• Skills (OJT)
• Experience
NEW
• Risk Based
• Problem Solving
COMPETENT
API SPEC Q2 FOR AUDITING
4.3.2 PERSONNEL COMPETENCE
THE FOUR LEVELS OF LEARNING
Novice
Competent
Experienced
Not
expected
to be able
to perform
Expected to
perform to
basic
standards
Beyond
understanding
of what must
be done
Expert
Creates
knowledge
and teaches
others
API SPEC Q2 FOR AUDITING
5.3 RISKS Management
Immediately
1 years
5 years
10 years
API SPEC Q2 FOR AUDITING
5.3 RISK MANAGEMENT
Maintain Procedures to controls Risk
throughout Service Execution
• Identify service related risk
• Implement controls
• Notify customer of remaining risk
API SPEC Q2 FOR AUDITING
5.4 Design & Development
Every Service includes Design and Development
API Q1
Products
API Q2
Services
Planning
Inputs
Outputs
Planning
Inputs
Outputs
Review
Verification
Verification
Validation
Final
Review
Changes
Changes
Failing to understand what is and is not critical will impact the service design
which will result in increased risks, lack of controls and potential for loss.
API SPEC Q2 FOR AUDITING
5.5 CONTINGENCY PLAN
Contingency planning shall be
integrated into services and
supporting processes between
the organization, its suppliers
and the customer”.
API SPEC Q2 FOR AUDITING
5.5 CONTINGENCY PLAN
Risk
History
Disruption
Mitigation
Contingency
Prevention
Measures
Planning
Spares
Integration
Reliability
Outputs
• Actions required
for significant risk
• Assignment of
responsibility &
authority
• Internal and
external
communications
API SPEC Q2 FOR AUDITING
5.6 PURCHASING & CONTROL OF SUPPLIERS
• Determine criticality of the
services and SRP
• Evaluation & Onsite audits
for critical suppliers.
Critical – That deemed by the organization or customer as indispensable or essential,
needed for a stated purpose or task, and requiring specific action
API SPEC Q2 FOR AUDITING
5.7.2 SERVICE QUALITY PLAN
Customer Specific for the
Service being performed
Takes into account
Environmental &
Operational Conditions
Risk
Assessment
Personnel
Competence
Contingency
Planning
Contract
Requirements
Design and
Development
Identification of
Equipment
API SPEC Q2 FOR AUDITING
5.7.3 IDENTIFICATION AND TRACEABILITY
• Identification controls must be
put into place to clearly identify
all stages of delivery,
installation, repair
(maintenance), and redress
• Service-related product shall be
identified.
• Critical service-related product
shall be identified and
traceable.
API SPEC Q2 FOR AUDITING
5.7.8 PMITP
Is applicable to Service Related Product (SRP)
Equipment Maintenance is handled under Work Environment.
Corrective
• Expensive
• Results in NPT
Preventive
• Minimizes Corrective
Maintenance
• Focus of API Spec Q2
Predictive
• SRP Integrity and
Reliability
API SPEC Q2 FOR AUDITING
5.7.8 PMITP
• Reports that document history use, repairs,
modifications, remanufacturing, inspection and test
activities that all direct verification for reuse of
product;
Corrective
• List of critical spare parts requirements
by the
Preventive
customer
and/or technical requirements including
• Expensive
those by the OEM
• Minimizes Corrective
• Results in NPT
Maintenance
• Controls that ensure equipment
integrity to original
performance requirements and
design
acceptance
• Focus
of API
Spec Q2
criteria are maintained
Predictive
• SRO Integrity and
Reliability
• Original performance requirements that cannot be
met shall undergo the MOC process
API SPEC Q2 FOR AUDITING
5.7.8 PMITP
• OEM
• Application, use, environments
• PMIT = OEM Recommendations + Owner
of the equipment
API SPEC Q2 FOR AUDITING
5.9 SERVICE PERFORMANCE VALIDATION
Validation must be:
• Differs from Validation for
manufactured product
• Validations occur during and
after execution of service(s)
• Carried out in accordance with
Design (5.4), SQP (5.7.2) and
acceptance criteria
API SPEC Q2 FOR AUDITING
5.10.4 CUSTOMER NOTIFICATION
• Customers shall be notified:
– When service execution,
does not conform to
requirements
– When SRP does not
conform which has been
delivered or used in the
execution of a service
API SPEC Q2 FOR AUDITING
5.11 Management of Change
Change in
Personnel &
Suppliers
Management
of Change
Process
Execution
Changes
Management
System
Changes
SRP & Design
Changes
No
Risk
Assessment
Higher
Risk?
No
End of Process
Yes
Customer
Notification
Customer
Accepts?
Yes
End of Process
API SPEC Q2 FOR AUDITING
Impact on Drilling Operations
Contractor Influence
Drilling Operations
Risk
Assessment
API Spec Q2
Resources
QA/QC
Design of
Service
Contingency
Planning
Competency
-90+
(AFE)
Maintenance
& Critical Spares
Operations Support
Service
Critical
Suppliers Quality Plans
0
Spud
• Assembly
Insp / Test
• Tool Insp
@ delivery
• Well Integrity
• Service
Performance Reduction of NPT
Validation
•MOC
•BHA Inspections
10
Time ( rig days)
20
PM
Programs
40
80
160+
API SPEC Q2 FOR AUDITING
SUMMARY & BENEFITS
API SPEC Q2 FOR AUDITING
INDUSTRY IMPACT
Operators
Service
Providers
Regulators
and other
Interested
Parties
Suppliers
API SPEC Q2 FOR AUDITING
WHAT API SPEC Q2 IS NOT
It is not a manual with
new buzz words that
you present to your
customers.
It is not a cross
reference between your
management system
and your customer’s.
It is not a template that
you fill in and claim
compliance.
API SPEC Q2 FOR AUDITING
WHAT API SPEC Q2 IS
It is about service quality and risk mitigation supported by
validation and actual service provider performance.
API SPEC Q2 FOR AUDITING
Benefits of Standardization
• Improves service related product reliability
• Minimizes risk through identification, planning & controls
• Identifies critical tasks that impact quality, safety and the
environment
• Minimizes service related risk and improves efficiencies
• Improves communication between service providers and their
suppliers and operators.
API SPEC Q2 FOR AUDITING
INDUSTRY
COLLABORATION
API SPEC Q2 FOR AUDITING
Industry Collaboration
Beta Test Site Assessments:
•
•
•
•
Gaps, hurdles and milestones for auditing to Q2
Identify competencies / training for API Staff / Auditors
Identify needed resources
Types of certifications needed to meet industry needs
•
•
•
•
•
Baker - Completed
Schlumberger – Completed
Weatherford – Completed
Halliburton – Completed
Orion Drilling – Completed
API SPEC Q2 FOR AUDITING
Industry Collaboration
API Spec Q2 Mock Audit:
• Halliburton – Bakersfield, CA
• July 29th – August 2nd 2013
PSL Covered
•
•
•
•
•
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Drilling Fluids & Solids
Cementing
Completion Tools
Production Enhancement
Directional Drilling / MWD / LWD
Wireline and Perforating
API SPEC Q2 FOR AUDITING
Industry Collaboration
API Spec Q2 Reviews:
•Orion Drilling
•Maersk Drilling
•Akita Drilling
•Parker Drilling
•Transocean
•MI Swaco
API SPEC Q2 FOR AUDITING
EVOLUTION OF API SPEC Q2
DEVELOPED
PUBLISHED
BETA TESTING
COMPLIANCE
CERTIFICATION
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
become certified in
API Spec Q2.
EXPECTATION
Service providers shall
be in compliance in
order to bid on jobs
requiring API Spec Q2.
API SPEC Q2 FOR AUDITING
QUESTIONS ?
API SPEC Q2 FOR AUDITING