API Q1 and ISO/TS 29001 A Case Study in Successful Collaboration

Stacey Hagen, Drilling Materials Sr. QA Advisor OCTG Lead Chair, API Subcommittee on Quality

Overview
ExxonMobil Background ExxonMobils standards strategy API Q1/ISO 29001 Case Study Conclusions

Company Background
Formed in 2000 as the result of the merger of Exxon and Mobil corporations Now the worlds largest publicly owned oil company 2006 net income of $39 billion US: Total liquid and gas production available for sale was 4.2 million oil-equivalent barrels per day Refinery throughput of 5.6 million barrels per day On March 30, 2007 announced participation in Chinas first fully integrated refining, petrochemical and fuels marketing joint venture with foreign participation Agreement between Sinopec, Fuijan Province, ExxonMobil and Saudi Aramco 3

Standards Strategy
ExxonMobil has long been active in national and international standardization
Member of the American Petroleum Institute (API), the leading oil industry standards developing organization since 1919 Chairman and CEO Rex Tillerson currently serves as Chairman of the API Board Involvement in ISO activities since 1947, providing the chair of TC28, Petroleum Products and Lubricants since its inception and holding a variety of other positions in TC28 as well as TC67, Oilfield Equipment, Materials, and Offshore Structures and TC193, Natural Gas
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Standards Strategy
Participation is based on business / industry need Resource cost assessed against standards added value Standards value combination of business benefits, priority, and spend Provide leadership where ExxonMobil has resources and expertise Standardization vehicle to improved performance Improved safety Improved reliability Reduce costs and enhanced supplier base
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Standards Strategy
ExxonMobil participation in Upstream oil & gas 50 technical professionals actively participate on API/ISO committees Annual prioritization of standards activities and proposals Steering team reviews accomplishments and forward plans

Steering Team

Pipelines Subsea & Flexibles Civil / LNG

Floating Structures
Cementing

Drilling
Completion Equipment Coiled Tubing Subsea Wellheads Well Control OCTG & Line Pipe

Quality Fixed Structures

Drlg Equipment & Riser Drilling Fluids Derricks, Wind Loads

Drilling & Servicing Equipment

Materials Field Bus Design

(Process Instruments)

Metering

Germany ISO
Coordination Fire & Blast & Platform Reassessment

API Q1/ISO TS 29001 Case Study

API has been developing standards since 1923 and is recognized as de facto international standards1 Industry undergoes tremendous transformation and growth: 1970s North Sea Discoveries, 1980s frontier areas including China, Africa, Middle East TC 67 reactivated in 1989, API assumes secretariat on behalf of ANSI in 1995
1 Standards & Competitiveness: Coordination for Results removing

Standards-Related Trade Barriers Through Effective Collaboration, US DOC report, May 2004.
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API Q1/ISO TS 29001 Case Study

API Q1, Specifications for Quality Systems first published in 1985, two years prior to initial publication of ISO 9000 series API Q1 and API product specifications form the basis of APIs Monogram Program API Monogram Program is the leading industry conformity assessment program, with 2120 licensed facilities worldwide China has largest number of licenses issued to date, 560
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API Q1/ISO TS 29001 Case Study

Why does oil and gas industry need more than ISO 9001:2000? Failure of goods and services can have severe consequences Need for consistency in manufacturing API Q1 contains 9001 text in its entirety and 45 additional requirements Control Features Independent Design Review Final Acceptance Inspection
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API Q1/ISO TS 29001 Case Study

Oil industry determined need for a sector-specific solution similar to automotive Standard to be developed in liaison with the TC 176 to ensure harmonization
Q1 was recognized as model for an international sectorspecific document so that final API and ISO standards would be identical

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API Q1/ISO TS 29001 Case Study

How best to align API Q1 and ISO as a sector specific quality standard? APIs Subcommittee on Quality proposed a NWI to align a revision of API Q1 and the development of sector specific quality requirements in March, 2002 Draft Technical Specification January 2003 Publication June 2003

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API Q1/ISO TS 29001 Case Study

One standard accepted globally One assessment / certification body accepted globally Ensures consistency in audits Eliminates variances in interpretations Prerequisite for doing business

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API Q1/ISO TS 29001 Case Study

Conclusions: API and ISO can work together successfully if the vision and commitment is agreed at the projects onset ExxonMobil and the international Oil and Gas industry will continue to push frontier boundaries in the search for oil and gas, requiring more stringent quality assurance requirements API Q1/ISO TS 29001 will continue to help the oil and gas industry ensure consistency in manufacturing and reliability of products.

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Xie Xie (Thank you)

Contact Information:
Stacey Hagen Drilling Materials Sr. QA Advisor OCTG Lead ExxonMobil Global Service Company 16945 Northchase Dr Houston, TX 77060 stacey.w.hagen@exxonmobil.com

API www.api.org, standards@api.org ISO www.iso.org, central@iso.org

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Back-Up Slide

Definitions:
API Spec Q1 Specification for Quality Programs for the Petroleum, Petrochemical and Natural Gas Industry ISO TS29001 Petroleum, Petrochemical and Natural Gas Industries Sector Specific Quality Management Systems Requirements for Product and Service Supply Organizations NWI New Work Item TC Technical Committee

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Back-Up Slide
Example clause ensures that documented methods are available for audit

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Back-Up Slide
Example clause ensures independent review of designs

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Back-Up Slide
Example clause ensures final acceptance inspection of product

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