2011 Standards Conference SC18 Committee on Quality Standards San Francisco June 30, 2011 API Monogram Program Status Report W. Don Whittaker Manager Monogram Program/APIQR Laura Levandoski Senior Associate Monogram Program/APIQR Cristina Gillespie Senior Associate Monogram Program/APIQR Aaron Duke Audit Program Manager Monogram Program/APIQR

API Monogram Program Status Report 1.Monogram Program Statistics 2.Fraud & Product Complaints 3.Monogram Standards Update 4.What’s happening with myCerts 5.Audit Program 6.Center for Offshore Safety 7.API Conference & Expo – Singapore 2012

Monogram Statistics Monogram ProgramEnd of 2009End of 2010Growth Licensees % Licenses %

Monogram Applications o 821 Applications o 689 New Facilities o 125 License Additions Top Countries:  China – 360  USA – 94  India – 53  South Korea – 28  Italy  Canada – 21  Canada - 24 June 2011

Monogram Licensees o 3287 Licensees o 76 Countries Top Countries:  China – 1,343  USA – 550  India – 199  South Korea – 117  Canada – 96  Italy – 86  United Kingdom – 65 June 2011

Monogram Licenses o 5423 Licenses o 76 Countries Top Countries:  China – 2,101  USA – 821  India – 375  Italy – 191  South Korea  Canada – 149  UAE – 144 June 2011

We’re in 78 Countries June 2011

Top Ten Specifications Licensees for 65 Different Specifications June 2011

APIQR Apps and Registrations June 2011

Fraud and Complaints Overview

Number of Fraud Cases

Note: 4 Withdrawn applications were also listed in the NLO Actions Taken

2011: 2 product complaints to date 1 – API Spec 16C Choke and Kill lines with 7K hose used as based material Suspended pending results of a full system periodic audit. 1 – API Spec 5D tool joint shoulder configuration per purchase agreement Action pending the SC5 written interpretation 2010: 4 product complaints 3 – Performed periodic audits No objective evidence supporting complaints found during audits 1 – API Spec 5CT T/C tubing leaking on the pin connections. Performed periodic audit Audit findings included problems related to threading of couplings and misuse of the API Monogram. Suspended pending results of a full system audit. Product Complaints

New / Revised Specifications New / Revised Specifications  API Spec 6A – Wellhead Equipment, 20 th Edition, published Oct 2011, Effective Apr 2011  API Spec 6AV1 – Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service, 2 nd Edition, Effective TBD  API Spec 6D – Addendum 2 – Pipeline Valves, 23rd Edition, Effective TBD  API Spec 7-1 – Addendum 3 – Rotary Drill Stem Elements, 1 st Edition, Effective Oct 2011  API Spec 5L – Addendum 3 – Line Pipe, 44 th Edition, published Jul 2011 / effective Jan 2012  API Spec 5CT – Casing and Tubing, 9 th Edition, published Jul 2011 / effective Jan 2012  API Spec 8C – Drilling and Production Hoisting Equipment, 5 th Edition, Effective TBD  API Spec 9A – Wire Rope, 26 th Edition, Effective Nov 2011  API Spec 10A – Cements and Materials for Well Cementing, 24 th Edition, Effective Jun 2011  API Spec 11AX – Addendum 1 – Subsurface Sucker Rod Pumps & Fitting, 12 th Edition, Effective TBD  API Spec 11E – Pumping Units, 19 th Edition, Effective TBD  API Spec 17D – Design and Operation of Subsea Production Systems-Subsea Wellhead and Tree Equipment, 2 nd Edition, Effective Nov 2011  API Spec 17F – Subsea Production Control Systems, 2 nd Edition, Reaffirmed  API Spec 19G3 – Running Tools, Pulling Tools, and Kick-over Tools and Latches for Side-pocket Mandrels, 1st Edition, No Effective Date Noted (Future Monogrammable Spec)

11V1 – 19G1 / 19G2 Transition Taking applications for 19G1 & 19G2 Existing 11V1 licensees must submit by January 1, G1 / 19G2 initial / transition audit scheduled Transition period ends July 1, V1 licenses withdrawn on July 1, 2012

Colour Code Product Questions All 19 – 19G1/G2/G3 – series specs completed 5CRA with SC5 WG API Spec 7K, 5 th Edition Proposed Monogram Specs ISO / Spec 19S1 - ISO / API Spec 19BV API Spec 6A, 20 th – end of July 2011 Working on establishing “full” time contracts with available subject matter experts

myCerts Update Laura Levandoski Senior Associate Monogram Program/APIQR

myCerts  1400 client audits are using the site since December 2010  The review time is an average of 52 days  Clients are able to view their status and audit history  An administrator account can be set up for clients with multiple facility sites  API provides IT helpdesk support 5 days a week 24 hours a day -

What’s Next  Audit Pilot July 2011  Audit scheduling  Auditor communication  Guest-Host relationships  Send feedback to API

Audit Program Update  2011 Audits To Date  Expectations for 2012 Audits  Auditor & Audit Program Updates Aaron Duke Audit Program Manager Monogram Program/APIQR

2011 Audits Audits Performed – January to June Audit Performed Audits by Program:  Monogram Only – 493  Dual – 441  Registration – 130  Other – 27 Audits by Country:  China – 377 (35% of total)  USA – 191 (17%)  India – 58 (5%)  Canada – 54 (5%)  South Korea – 32 (3%) June 2011

mid-June 2011 Monogram Total 493 Renewals256 Initials162 Re-Audits57 Other Monogram Audits

mid-June 2011 Dual Total 441 Periodics - Surveillances171 Renewals - Recertifications131 Initials124 Re-audits9 Other Dual Audits June 2011

2011 – 2009 Audits Historical Comparisons June 2011

Audit Expectations June 2011

Auditor Needs Assessment

Auditors and Audits Auditors  114 QMS – Monogram Auditors / 28 Countries  6 fully qualified in first half of 2011  120 total certification auditors  18 auditors in process  USA / China / Japan  Continue to source more local resources  Fall 2011 – plan for fall 2012 auditor summit  Auditor competencies – 5CRA / 10A Audits  Added staff member to process audits – audit assignments  Continue to work to get ahead of assignments  myCerts improvements to get audits done on time  Improving audit product questions

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Promote the highest level of safety for offshore drilling, completions, and operations through leadership and effective management systems addressing communication, teamwork, and independent third-party auditing and certification Mission:

15 Elements / Principles 1.Governance 2.Guiding Principles 3.Mandatory Adoption of RP 75 4.Outreach Program 5.Regulatory Interface 6.Audit Protocols 7.3 rd Party Audit & Certification 8.API Accreditation 9.Incidents & Lessons Learned 10.Leading & Lagging Indicators 11.Continual Improvement 12.Critical Job Functions 13.Safety Case 14.Technical Assistance 15.Toolkit

API GIS Committee API Upstream Committee API Executive Committee External Advisory Group Government entities Academia reps Others as appropriate Independent 3 rd Party Auditors Center for Offshore Safety Governing Board Up to 17 members Chairman (API-member company rep) Producing/Operating companies (6 max) Drilling Contractor companies (3 max) Service & Supply companies (3 max) Industry Association representatives (3 max) COS Executive Director Center for Offshore Safety Executive Director Technical Support and Administrative Staff 3 rd party auditor certification program API Global Industry Services operations 1 - Governance

COS ORGANIZATION CHART (August 1, 2011) Other API GIS Resources - Law - Accounting - Etc. Industry Loaned Professionals API Staff COS Staff 3rd Party Consultants 3rd Party Auditors

March 6, 7, 8, 2011 – Technical Sessions + Exposition Raise global awareness about API and API Standards Looking for experts to present – local operations Upstream – Monogram Technical sessions Benefits of API Monogram Program – Panel International material standards – use & compatibility Well construction & well control topics Offshore structure design – hurricane / weather considerations HSE / SEMS implementation offshore – RP75 HPHT topics OR anything else current in Upstream world

FOR MORE INFORMATION CONTACT Aaron Duke – – Matthew Cunningham – –

2011 Standards Conference SC18 Committee on Quality Standards San Francisco June 30, 2011 Thank You W. Don Whittaker Manager Monogram Program/APIQR Laura Levandoski Senior Associate Monogram Program/APIQR Cristina Gillespie Senior Associate Monogram Program/APIQR Aaron Duke Audit Program Manager Monogram Program/APIQR