01 nam shell euoag independent verification in uio t

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Copyright 2006 Shell Global Solutions International BV

L181 Basic Terinal !ngineering Course Topic or Session or "o#ule $ae

%th !&'(G ) *r# o+ ,uly 201-Copyright o+ .oyal /utch Shell plc

(sset Integrity an# Process Sa+ety "anageent (sset Integrity an# Process Sa+ety "anageent (sset Integrity an# Process Sa+ety "anageent (sset Integrity an# Process Sa+ety "anageent

) 0o1 it 2or3s 4aintaining the S!C!5s6

) Control an# (ssurance

) (u#its an# .e7ie1s

) In#epen#ent Veri+ication

Presentation to the

European Union Offshore Oil and Gas Authorities Group (EUOAG)*r# o+ ,uly 201-

1

(nte rens9 i 7an #en Berg

Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201- :::::::::::;;;; 2

Vision: “Our Assets are Safe, and we know it”

2





Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201- *

Agenda

Asset Integrity & Process Safety Management – How it Works

Asset Integrity & Process Safety Management – Assurance

Line of Defence – Audits and Reviews

Independent Verification

– 1st Party AssuranceTechnical Authority, Audits and Reviews

– 2nd Party InspectionAccredited Internal Inspection Body

– 3rd Party Verificationby Bureau Veritas (OneGas UK)

Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201-

Vision: “Our Assets are Safe, and we know it”

-

/esign Integrity /esign Integrity /esign Integrity /esign Integrity TechnicalTechnicalTechnicalTechnical

Integrity Integrity Integrity Integrity

'perating'perating'perating'perating


Integrity Lea#ershipIntegrity Lea#ershipIntegrity Lea#ershipIntegrity Lea#ership

(sset Integrity (sset Integrity (sset Integrity (sset Integrity

HSE Case & ALARP-statement



Copyright 2006 Shell Global Solutions International BV Page *



EXAMPLES of SECE’s

PERFORMANCE STANDARD of SECE’s

Instrumented Protection System (SIL rated)

– Trip setting of initiating element (e.g. 85% of set pressure relief valve)

– Right sequence of events (shutdown schedule)

– Fail safe

Shutdown Valve (upstream design pressure)

– Closing Time < ... seconds

– Leak Rate < ... m3 /hr

Pressure Relief Valve (set pressure to protect design)

– Opening Pressure > 110% Set Pressure (safety)

– Opening Pressure < 90% Set Pressure (environment)<

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Vessels9 Coolers9 Piping9 eaters9 Tan3s9 :::

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Hardware barriers and SCE groups (addresses Safety and Environment)

:::::::::::;;;; 6

• SC! S!C!D

SC!5s a##ress both Sa+ety an#

!n7ironent

• Sa+ety an# !n7ironent are

anage# in integral ay



Copyright 2006 Shell Global Solutions International BV Page -



/!V!L'PE P.',!CT P.'/&C!

SCE Management through the Asset life cycle

:::::::::::;;;; %

C""S CoputeriFe# "aintenance "anageent Systee

!!/ ront !n# !ngineering /esign

(I/ aFar# I#enti+ication

!"P aFar# an# !++ects "anageent Process

'.A( 'perational .ea#iness A (ssurance


Technical Integrity Management

2. Create / Update Maintenance,Inspection and Test plan

Planned maintenance, Inspection and Testing

routines automatically called by the CMMS

8

1. Identify SCEs and PerformanceStandards (using HEMP)

3. Execute Maintenance, Inspections

and Testing

4. Initiate CorrectiveTask

Risk assess and mitigate.

If not acceptable productionis stopped.

Facility Status Reporting

(FSR) with TA approval

Methodology & Strategy

Risk and ReliabilityManagement (RBI, WIMM,

PIMM, IPF, CMF, …)

$'$'$'$'

=!S =!S =!S =!S

SCE functionsOK

FSR monitoring of SCE groups

S. )acility Status .eporting

Pre7enti7ePre7enti7ePre7enti7ePre7enti7e

"aintenance tas3s

SC! Per+orance Stan#ar#s

Correcti7eCorrecti7eCorrecti7eCorrecti7eaintenance

4C"PT priority

CoputeriFe# "aintenance "anageent

Syste

SCE functionscorrectly ?



Copyright 2006 Shell Global Solutions International BV Page <


Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201- H

Agenda









Independent Technical Authorities

TA0: EVP of Shell Upstream International Operated (UIO) and EVPUpstream Development (PTU)

Del-TA0: Engineering & Production is VP Global Production Excellence

TA1’s appointed by del-TA0:

ENGINEERING: Mechanical Static, Rotating; Electrical; Control & Automation;Pipelines; Inspection; Materials & Corrosion; Civil; Offshore Structures; Process Eng

HSSE SP: Technical Safety, Environmental

PRODUCTION: Production Operations; Maintenance and Reliability; ProductionTechnology (well integrity); Production Chemistry; Logistics

TA2’s and TA3’s are appointed by the TA1’s

Competences of all TA’s are formally assessed before beingappointed

10

TA0

TA1

TA2/TA3

TA0

TA1

TA2/TA3

P.',!CTS P.',!CTS P.',!CTS P.',!CTS

T!C$'L'G= T!C$'L'G= T!C$'L'G= T!C$'L'G=

4ell an#4ell an#4ell an#4ell an#

acility ProJectsacility ProJectsacility ProJectsacility ProJects

&PST.!("&PST.!("&PST.!("&PST.!("

'P!.(T!/'P!.(T!/'P!.(T!/'P!.(T!/

4!ngineering94!ngineering94!ngineering94!ngineering9

Pro#uctionPro#uctionPro#uctionPro#uction

(SS!T '$!.SP.',!CTS 4incl

!LLS






Technical Professional Foundation

11

• Structure# /e7elopent Prograes 4inclu#ing assessents are a7ailable +or all engineering #isciplines


Independent Technical Authorities

ASSET

co-locatedEngineers

/ TA2

Maint EngTL

VP NAM NL andOneGas UK

MaintMgr

DisciplineLead / TA1

Disc Eng

Mgr

Asset MgrProd Serv

Mgr

OpsMgr

Del-TA0

appointent an#

escalation

EVP Upstream International Operated (TA0)

Business

priorities

Technical

(ssurance

12



Copyright 2006 Shell Global Solutions International BV Page %



Independent Technical Authorities – Control and Assurance

Engineers, Operators, Maintainers, …

– Own the Delivery and Responsible for the Qualityof the Work

Kuality Control

Kuality (ssurance

Kuality or3

Technical Authorities 2 and 3 (TA2, TA3)

– Own the Quality Control and Sign off onDeliverables (Design Docs, Deviations; etc.)

Technical Authority 1 (TA1)

– Set / maintain the Standard for their Discipline

– Assess and appoints TA2s/TA3s – Approve Deviations from the Discipline Standard

Integrity Meeting at

Asset level(every month)

Integrity MeetingNAM & OneGas UK(every 6 months)

ManagementReview





IntegrityIntegrityIntegrityIntegrity

Lea#ershipLea#ershipLea#ershipLea#ership


1*

Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201- 1-

Agenda













ar#are 9 'rganisation9

Proce#ures9

'ps Contet

/C(/C(/C(/C( MMMM /iscipline Control an# (ssurance raeor3/iscipline Control an# (ssurance raeor3/iscipline Control an# (ssurance raeor3/iscipline Control an# (ssurance raeor3

Kuality Control an# (ssurance o+ Critical /eli7erablesD

/!P5s9 /!"19 /!"2/!P5s9 /!"19 /!"2/!P5s9 /!"19 /!"2/!P5s9 /!"19 /!"2

T(5s

Bla#es 10E12Bla#es 10E12Bla#es 10E12Bla#es 10E12 MMMM "I!"I!"I!"I!

"aintenance Integrity !LcutionD

Pre7enti7e A

Correcti7e

aintenance

copliance

/e7iation

"anageent

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.is3 A .eliability "gtD

etc::::::etc::::::etc::::::etc::::::

Bla#e 1HBla#e 1HBla#e 1HBla#e 1H MMMM '7erall !Nuipent'7erall !Nuipent'7erall !Nuipent'7erall !Nuipent

Con#itionCon#itionCon#itionCon#ition

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.is3 Base#

Inspection

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ar#arear#arear#arear#are

Barrier (ssessentBarrier (ssessentBarrier (ssessentBarrier (ssessent

ar#arear#arear#arear#are

Barrier (ssessentBarrier (ssessentBarrier (ssessentBarrier (ssessent

Asset Integrity & Process safety Assurance within UIO/T

Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie Process Sa+ety .e7ie

S! Case A

(L(.P )stateent

Bla#e 1*Bla#e 1*Bla#e 1*Bla#e 1* MMMM"oC"oC"oC"oC

"anageent o+ ChangeD

So )

Stateent o+

itness

or both peranent

A

teporary

changes





Integrity Lea#ershipIntegrity Lea#ershipIntegrity Lea#ershipIntegrity Lea#ership


Bla#e 2-Bla#e 2-Bla#e 2-Bla#e 2- MMMM iel# 'psiel# 'psiel# 'psiel# 'ps

'perations IntegrityD

)Perit to 2or3

) (lar "gt

) 0an#o7ers

) :::::

'I re7ie 'I re7ie 'I re7ie 'I re7ie 'I re7ie 'I re7ie 'I re7ie 'I re7ie

1<

The Line o+ /e+ence 4L'/ "o#el

LOD 1

Management controls give effect to Management

ownership, accountability and responsibility for

delivering business objectives and assessing,

controlling and mitigating associated risks, together

with maintaining effective internal controls.

LOD 2

Higher level controls and business assurance to assess the

effectiveness of business processes, operational controls and

management controls in ensuring compliance with processes,

controls and external laws and regulations.

LOD 3

Independent (internal and external) audit provides assurance

to the RDS oard and senior management on how effectively

the organisation assesses and manages its risks

LOD 3

Management !ontrols

LOD 1

"perational !ontrols and #rocesses

inance !ontrols "usiness !ontrols #alue !ontrols

Operational processes and controls are the

means by which business objectives are

achieved and many risks are managed on a day$to$

day basis, usually governed by documented %roup,

usiness and lower level standards and policies.

LOD 2

"usiness

$ssuranceLOD1 & 2support

Management

in Control

LOD 2 & 3 arepart of Annual

AssurancePlan

AUDITand

REVIEW Hardware Barrier Assessment

Process Safety Review

Integrity Assurance Sustain Review

Maintenance Execution Sustain Review

Operation Integrity Reviews

…

Shell Internal Audits (Asset Mgt, ...)

HSSE SP Audits



Copyright 2006 Shell Global Solutions International BV Page H


Copyright o+ .oyal /utch Shell plc %th !&'(G ) *r# o+ ,uly 201- 1%

Agenda









Verification: “a multi dimensional playing field”

SCE groups (Structures; Pressure Containment; Ignition Control; Emergency Response; ... )

Project Phase (Design, Construct, Commission) ....… Produce Phase (Maintain, Operate, Management of Change, Life Extension)

Management System level (processes, methodology, organisation, competences) …… Output level (Check Plans /Programmes; Condition of equipment, Witness Activities)

Sampling (100% … Random check ... Risk Based Methodology)

Level of Independence: 1st Party ….. 2nd Party … 3rd Party

Reporting of findings to Duty Holder … Competent Authority

Certificates of compliance …. Approved …. Accepted …. No further Questions

18

What is the right level of verification?






1st Party Assurance – Technical Authorities, Review and Audits

Hardware Barrier Assessment- HBA

Technical Authority team visits site and verifies effectiveness of hardware barriers

Each year several sites per Asset according to multi year plan

Close feedback loop: Which HBA-groups are effective and where are improvements required

(strategies; PM-routines; competence; ...).

Outcome HBA is input for PSR evidence at Asset level.

Process Safety Review - PSR

Technical Safety lead review to verify Asset at HSE case level.

Builds on findings of HBA’s, with focus on:

– Management of Changes: Ops Conditions; Hardware; legislation; LFI’s; Procedures; Technology and Organization

– Safety studies (e.g. HAZOP)

– ALARP statement

Operation Excellence Reviews

Integrity Assurance Sustain Review

Maintenance Execution Sustain Review

Operation Integrity Reviews

Audits and Reviews (LoD2 and LoD3)

Shell Internal Audits (e.g. Asset Management)

HSSE SP Audits

1H


1st Party Assurance - Strengths and Points of Attention

Strengths Points of Attention

Close to the business and linked withproduction and maintenance processes

Requires up-to-date standards andaccepted methodologies and processes

Integration of design, construction & producephase allows direct feedback andoptimization

Requires sufficient in-house capabilityand competences which are formallyassessed

Allows pro-active approach to anticipatefuture changes (operating conditions,modifications)

Needs special attention to keep up todate with legal requirements, standardsand technology developments

Gives higher efficiency and st imulates “pro-active” behaviour

Appropriate level of independence mustbe ensured

Stimulates ownership and cross learningbetween different assets and operations

Needs right leadership and behaviours ofboth asset line and Technical Authorities

Formal escalation to Shell EVP level (aboveVP NAM NL and OneGas UK)

Might be perceived as less independentby the community at large

20






2nd Party Inspection – Accredited Internal Inspection Body

For Pressure Equipment an accredited 2nd or 3rd party inspectionbody is required to meet NL legislation of pressure equipment

– Pressure Vessels

– Heat Exchangers

– Storage Tanks

– Piping Systems

– Relief Systems

IQS (Inspection Quality System) is part of CMS(Corporate Management System)

Competency of inspectors are based on external certification

Shell Risk Based Inspection methodology is externally accepted

Inspection Department is formally accredited (Raad van Accreditatie) andappointed by the Dutch Authorities (Ministry of Social Affairs)

21


2nd Party Inspection - Strengths and Points of Attention -


Accredited 2nd party Inspection Body isaccepted alternative over 3rd party InspectionBody satisfy legal requirements for pressureequipment in NL

Needs to maintain an externallyaccredited “quality management system”and organisation

Builds on strengths, knowledge andexperience of 1st party assurance

Needs to maintain certified SKKcompetence levels of inspectors in NL

Seen as more independent than 1st partyassurance by community at large

Inspection techniques and sample sizedepend on full understanding ofdegradation modes/ rates and defectmorphology.Shell Risk Based Inspection methodologyis formally, externally accepted in NL.

22






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Role of 3rd Party Verification – Bureau Veritas

2*


3rd Party Verification - In OneGas UK by Bureau Veritas

In UK the Verification and Examination Scheme of the Duty Holder is requiredby the Offshore Installations Regulations (“Safety Case” and “Prevention of Fire and

Explosion and Emergency Response”)

The Verification and Examination Scheme is compiled by the Duty Holder inconsultation with the Verifier (Independent Competent Person, ICP)

The sampling is risk based aimed at all SCE groups. SCEs are ranked in termsof criticality and drives number of verifications and offshore visits. The criticalityis based on risk (consequence and likelihood of failure)

Verification and Examination comprises witnessing and checking. All findings are recorded in database (BV-net)

Findings are reported as Low, Medium or High priority.

– For OneGas West approx. 100 findings/year (80% Low; 20% medium; no highfindings in past 5 years).

Escalation (none received for OneGas UK in past 5 years):

– “Note of Concern”, when too many findings or insufficient follow-up

– “Note of Reservation”, when “Note of Concern” not satisfactorily resolved.

~3.5 man years to execute the operational (~2.5) and modifications (~1)verifications for OneGas UK

2-



Copyright 2006 Shell Global Solutions International BV Page 1*



3rd party verification - Strengths and Points of Attention


3rd party perceived as more independentthan 1st party and/or 2nd party

More distant from primary businessprocesses (e.g. projects, production andmaintenance) and as such reactive

Verification Scheme/ sampling is risk basedand agreed with Independent CompetentPerson

Independent Competent Person needs tobe competent to verify variety of SCEgroups in project and/or operate phase

Commercial interest of 3rd party verifier

could hamper cross learning betweenverifiers

When 1st party assurance functions properlythis could result in duplication of effort


3rd Party versus 2nd Party: Examples / Considerations

2nd Party Inspection of Pressure Equipment

– Corrosion and degradation rate depends on material selection, medium(CO2, H2S, acidity, salt, sand, ...), temperatures, flow regime, ...

– Heavily integrated with the primary production processes

– Business impact (shutdown duration and frequency)

3rd Party Inspection of Electric Systems – Less integrated with the primary process of exploring and producing

hydro carbons

– Mature and widely accepted industry practices

26



Copyright 2006 Shell Global Solutions International BV Page 1-



Independent Verification to prevent Major Accident

First party independent verification supplemented with reviews andaudits does provides the assurance required by the RDS board of itsrespective duty holders

In case additional verification is deemed necessary (e.g. in eye ofpublic) it would be most effective to focus on the primary barriers thatprevent high energy release top events potentially leading to MajorAccident scenario’s. Like:

– Pressure Containment

– Pressure vessels, Pipelines, ...

– Shutdown systems, Emergency Shutdown valves, Pressure Relieve valves, ...

– Structural Integrity

– Primary structure

At present member states impose different requirements

– “Inspection” NL: In depth on selected equipment - Pressure vessels; Life extension Primary

Structure; Cranes; Electric Installation; ....

– “Verification” UK: Risk based covering all SECE’s

2%


Concluding Remarks

The FOUNDATION is a solid Asset Integrity and Process Safetymanagement process, with:

– proactive Leadership

– Competent Staff

– independent Technical Autorities

Reviews and Audits (internal and external) assess the effectivenessof business processes, operational controls and management controlsin ensuring compliance with processes, controls and external laws andregulations

Goal setting, Risk Based and Tiered approach for inspection andverification

28

01 nam shell euoag independent verification in uio t

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