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API SPEC Q2 FOR AUDITING
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
Absence of a Corporate Management System
Inconsistency in Risk Mitigation
Lack of Implementation
Lack of Oversight
BUSINESS DRIVERS
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
Personnel Competency
Lack of or not Following
procedures
Lack of using history logs
Contingency planning
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
Life Cycle Management
API Spec Q2
API Spec Q1
Auditor Effectiveness
Min. Mfg. Requirements
Welding Monogram Program
TG2 TG1 TG3 TG4 TG5 TG6 TG7
SC18
CSOEM
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
CUSTOMER REQUIREMENTS CUSTOMER
SATISFACTION
INPUT OUTPUT
CONTINUAL IMPROVEMENT
PROCESS- AND RISK-BASED QMS (API Q2)
API SPEC Q2 FOR AUDITING
OVERLAP - API SPEC Q1 VS. API SPEC Q2
General Requirements
Quality Manual
Control of Documents & Records
Quality Policy
Quality Objectives
Planning
Management Review
Control of Monitoring and Measurement Equipment
Measurement, Analysis and Improvement
Training
Corrective and Preventive Action
API SPEC Q2 FOR AUDITING
SERVICE-SPECIFIC Additions - API SPEC Q2
No Claims to Exclusions
Competency of Personnel
Risk Management
Detection Equipment
Service Design
Contingency Planning
Control over Critical Suppliers
Service Quality Plan
Preventive Maintenance, Inspection and Test
Service Performance Validation
Management of Change
Corrective and Preventive Action resulting in a change of controls
Customer Notification
Traceability of Critical Services and SRP
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
• 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
COMPETENT
4.3.2 PERSONNEL COMPETENCE
NEW • Risk Based • Problem Solving
Competency = • Education • Training • Skills (OJT) • Experience
API SPEC Q2 FOR AUDITING
4.3.2 PERSONNEL COMPETENCE THE FOUR LEVELS OF LEARNING
Novice
Not expected to be able to perform
Competent
Expected to perform to
basic standards
Expert
Creates knowledge
and teaches others
Experienced
Beyond understanding of what must
be done
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
Planning Inputs Outputs Review Verification Changes API Q1 Products
Validation
Planning Inputs Outputs Verification Changes API Q2 Services
Final Review
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
• Actions required for significant risk
• Assignment of responsibility & authority
• Internal and external communications
Outputs
Integration
Disruption Prevention
Mitigation Measures
Spares
History Risk
Reliability
Contingency Planning
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
Design and
Development
Personnel
Competence
Contract Requirements Identification of
Equipment
Risk Assessment
Contingency Planning
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 Preventive
Predictive • Expensive
• Results in NPT
• Minimizes Corrective Maintenance
• Focus of API Spec Q2
• SRP Integrity and Reliability
API SPEC Q2 FOR AUDITING
5.7.8 PMITP
Corrective Preventive
Predictive • Expensive
• Results in NPT
• Minimizes Corrective Maintenance
• Focus of API Spec Q2
• SRO Integrity and Reliability
• Reports that document history use, repairs, modifications, remanufacturing, inspection and test activities that all direct verification for reuse of product;
• List of critical spare parts requirements by the customer and/or technical requirements including those by the OEM
• Controls that ensure equipment integrity to original performance requirements and design acceptance criteria are maintained
• 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
Management of Change
Process Execution Changes
Management System
Changes
SRP & Design Changes
Risk Assessment
Customer Notification
No
Yes
No
Customer Accepts?
Higher Risk? End of Process
End of Process
Change in Personnel &
Suppliers
Yes
5.11 Management of Change
API SPEC Q2 FOR AUDITING
Impact on Drilling Operations
Reso
urce
s
-90+ 0 40 10 20 160+ 80
Risk Assessment
Drilling Operations
Design of Service
PM Programs
Contingency Planning
Maintenance & Critical Spares
• Assembly Insp / Test
QA/QC
• Service Performance Validation
•BHA Inspections
•MOC
Critical Suppliers
Time ( rig days) (AFE) Spud
Operations Support
• Well Integrity Reduction of NPT
Contractor Influence
API S
pec
Q2
• Tool Insp @ delivery
Competency
Service Quality Plans
API SPEC Q2 FOR AUDITING
SUMMARY & BENEFITS
API SPEC Q2 FOR AUDITING
INDUSTRY IMPACT
Operators Service Providers
Suppliers Regulators and other Interested
Parties
API SPEC Q2 FOR AUDITING
It is not a template that you fill in and claim
compliance.
It is not a cross
reference between your management system and your customer’s.
It is not a manual with new buzz words that you present to your
customers.
WHAT API SPEC Q2 IS NOT
API SPEC Q2 FOR AUDITING
It is about service quality and risk mitigation supported by validation and actual service provider performance.
WHAT API SPEC Q2 IS
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 • 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 ?