2013 Standards Conference SC18 Committee on Quality Standards Washington, DC June 27, 2013 API Monogram Program Status Report W. Don Whittaker Manager Monogram Program/APIQR Aaron Duke Certification & Audit Program Development Monogram Program/APIQR

API Monogram/APIQR Program Status Report 1.Monogram Program Statistics 2.Fraud and Misuse 3.Q1 & Q2 Updates 4.Audit Program 5.License Format Changes 6.API Conference & Expo – Beijing – myCerts Update

API Monogram/APIQR Clients 6-13

4738 Active Clients 4218 Licensed Companies Companies Certified with APIQR Companies With Both. 6-13

API Monogram Licensed Companies Top Countries: 1.China – USA – India – S. Korea – Italy – Canada – 90 7.UAE – 75 8.Indonesia – 74 9.UK – Japan – Germany – Mexico – Singapore – Malaysia – Russia – Licensees. 78 Countries. 6-13

API Monogram Licenses Top Countries: 1.China – USA – India – Italy – S. Korea – UAE –184 7.Canada – Indonesia – Germany – UK – Singapore – Japan – Mexico – Malaysia – France – Licenses. 6-13

Top Specifications 6-13

Top Licensed Products 6-13 API-6D Ball Valves 666 API-5L PSL 1 Line Pipe 542 API-5CT Threader 534 API-7-1 Threading 512 API-6A Flanges 510 API-6D Gate Valves 506 API-6D Check Valves 501 API-6A Valves 460 API-5L PSL 2 Line Pipe 452 API-6A Tees and Crosses 430

APIQR ISO 9001 Certified Companies 1192 Companies. 66 Countries Top Countries: 1. China USA Canada61 4. India54 5. Indonesia38 6. Singapore31 7. UAE30 8. Russia28 9. S. Korea Mexico25

APIQR API Spec Q1 Certified Companies 1214 Companies. 68 Countries Top Countries: 1.China329 2.USA303 3.Canada58 4.India55 5.Singapore41 6.Indonesia39 7.S. Korea30 8.UAE30 9.Russian27 10.Mexico24

API Monogram Applications 918 Applications at 638 Companies Top Countries: 1. China USA India61 4. Indonesia33 5. S. Korea31 6. UAE28 7. Canada28 8. Singapore18 9. Italy Romania15

APIQR ISO 9001 Applications 340 Applications Top Countries: 1. China USA88 3. Singapore19 4. Canada17 5. UAE13 6. Russia12 7. India11 8. Indonesia8 9. Malaysia5 10. Italy5

APIQR API Spec Q1 Applications 373 Applications Top Countries: 1. China USA89 3. Singapore25 4. Canada15 5. Russia13 6. UAE13 7. India12 8. Indonesia8 9. S. Korea6 10. Malaysia5

Fraud and Complaints Overview

27 cases received to date 11 open / 16 closed New trend towards investigative audits as resolution rather than issuing simple notices to facilities 9 cases have been handed to auditors for investigation in Fraud Cases

Product Complaints 18 total product complaints received in 2012/ Clients/End Users 2 API Affiliates 2 Ex- employees

Product Complaints Complaint outcomes 4 total were unsubstantiated 3 resulted in suspension 1 resulted in cancellation 3 resulted in scope changes/reduction

Product Complaints Complaint Details: 7F Roller Chain manufacturer Chains that break after minimal use Complaining party was certain facility performed nonconforming manufacturing practices Investigation Result: Facility exposing products to corrosive liquids Facility performed analysis and issued warning to all clients Complaint dismissed

Product Complaints Complaint Details: Report from potential client as a result of a customer audit Concerns that facility did not have minimum capability to design, weld, and heat treat 16A products Investigation Result: Total of 19 findings Incomplete design packages Missing acceptance criteria for calibrated equipment Production not performed under controlled conditions Some missing evidence of final inspections Immediate Suspension

Product Complaints Complaint Details: Report facility operated out of an office block Facility also lacked capability to design, fabricate, manufacture, assemble or test Derricks, Masts and Substructures Investigation Result: Facility had a sub-site where they assemble, test, and Monogram Procedures did not explain or reference activities Facility forced to switch Monogram location to sub-site and switch main office to APIQR

Product Complaints Complaint Details: 5L manufacturer delivering corroded pipes with low impact strength, poor finish, and inaccurate mill test reports Investigation Result: Facility had been subcontracting manufacturing Only possessed capability to process pipe 5L scope immediately reduced from manufacturer to processor

Q1 & Q2 Update

API Spec Q1, 9 th Edition Transition June 1 through November 1, 2013 Audits conducted to 8 th Edition Auditor and Staff training to new requirements July 8, 2013 Send “Conformance Matrix” to all participant Organizations December 1, 2013 through May 1, 2014 Audits conducted to 9 th Edition Findings raised against new requirements will be “Concerns” Applicants Only: Beginning on March 1, 2014, any finding raised against new requirements will be considered a full nonconformance June 1, 2014 Conformance to Spec Q1, 9 th Edition mandatory “Conformance Matrix” due

API Spec Q2 – Program Implementation March 2013 Beta Assessments completed July 29 th – August 2 nd 2013 Mock audit planned – Halliburton, Bakersfield Full test of audit process, planning and reporting Fall 2013 Accepting applications for certification Train and qualify auditors and staff First Quarter 2014 Audits to API Spec Q2

Audit Program Status Report

1286 Audits Performed Audits by Program:  Monogram Only – 583  Dual – 480  Registration – 207  Other – 19 Audits by Country:  China – 455 (35%)  USA – 247 (19%)  India – 68 (5%)  Canada – 50 (4%) 2013 To Date Total Certification Program Audits 6-13

API Monogram Audits 6-13

Dual (API Monogram / APIQR) Audits 6-13

APIQR Registration Audits 6-13

2009 – 2013 Historical Comparisons

2013 Audits Due – Status 6-13

Active API Monogram/APIQR Auditors 151 Active Auditors 146 QMS-Monogram 16 Auditors in training 15 EMS-OHSAS 11 API-U 15 Perforator Witness 6-13

Local Auditors in 31 Countries. 1-13

Audit Program - Auditors 16 Auditors-in-training / 10 more started process Focusing on USA Auditor Training-Qualification Sessions Houston-Longview & Carrollton Training sessions with mock audits Auditor Training-Qualification Plans API Spec Q2 & API Spec Q1 – training API Spec Q2 – qualify auditors for fall 2013 Still working on 5CRA and 20A plans 10 auditor observations complete – 20 more scheduled for

Audit Program - Audits Product Spec Questions In place for 34 product specs – all up-to-date 12 more to be in place by mid-August Periodic Audits – Goals Established for scheduled or completed in 2013 Goal – perform 100 in 2013 Testing of revised audit report Using SC5 draft audit tools – positive feedback to date Adding operational resource in Houston office 6-13

API Monogram Program Proposed Changes to License Format Product listings getting longer and more complex More grades, groups, PSLs, FSLs, quality levels, etc. Cannot effectively be displayed on a 1 page License document Looking at a 2 page format for the License Page 1 general license and scope information Page 2 specific product scope with applicable details Example follows 6-13

Questions Comments OTHER OPTIONS 1 page Monogram License document (see page 1 of example) Only show generic scope with reference to API Composite List Details included on API Composite List 8 ½ x 14 format? Any comments or concerns? 6-13

Upstream Track Conference Schedule – September 11 th, 12 th and 13 th, 2013 Health, Safety & Environmental Charlie Williams–Center for Offshore Safety Standards & Regulations Aaron Swanson–Baker Roland Quality & Reliability Zhang Hanliang–Petro Rennie Van Drilling & Production – 2 Sessions Jim George Terry Lechinger–Stress Upstream Track

myCerts myCerts.api.org Laura Levandoski Sr. Associate –Project Manager Global Industry Services

myCerts What is myCerts? myCerts-2013 Release Testing

myCerts Today myCerts.api.org myCerts is our secure web site Resolve audit findings

myCerts Applications will only be accepted on-line Electronic legal agreements Contacts will be managed by the clients Include product details Audit resolution New composite list

Migration Plan Pilot - Fall 2013 Application process Continuous review of business process Full Launch – Late 2013 Migrate all clients Only migrating address

System Requirements All common browsers will work – Internet Explorer Version 8 or higher – Firefox Version 3.5 or higher – Chrome – Safari No additional plug-ins

Volunteers - Testing July 2013 – client testing API if interested – Expectations: – 2-3 hours – Complete application and review audit response process – Document comments with screen shots and notes – Screen share with API

Helpdesk Helpdesk Information myCerts will have a new helpdesk suggestions and issues

Questions? Thank you………. W. Don Whittaker Manager Monogram Program/APIQR Aaron Duke Certification & Audit Program Development Monogram Program/APIQR Laura Levandoski Sr. Associate –Project Manager Global Industry Services