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

Collaboration

Stacey Hagen, Drilling Materials Sr. QA Advisor – OCTG LeadChair, API Subcommittee on Quality

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Overview

• ExxonMobil Background

• ExxonMobil’s standards strategy

• API Q1/ISO 29001 Case Study

• Conclusions

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Company Background

• Formed in 2000 as the result of the merger of Exxon and Mobil corporations

• Now the world’s 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 China’s

first fully integrated refining, petrochemical and fuels marketing joint venture with foreign participation– Agreement between Sinopec, Fuijan Province,

ExxonMobil and Saudi Aramco

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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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• 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

Standards Strategy

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• 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

Standards Strategy

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Floating Structures

Subsea & Flexibles

Materials

Drilling

CementingCompletion Equipment

Drlg Equipment & Riser

Fire & Blast & Platform Reassessment

Metering

Field Bus Design (Process

Instruments)

Quality

Pipelines

Fixed Structures

Coiled Tubing

Subsea - Wellheads

Well ControlDerricks, Wind Loads

Drilling & Servicing Equipment

Steering Team

Civil / LNG

Germany ISO Coordination

Drilling Fluids

OCTG & Line Pipe

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• API has been developing standards since 1923 and is recognized as “de facto” international standards1

• Industry undergoes tremendous transformation and growth:– 1970’s North Sea Discoveries, 1980’s 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.

API Q1/ISO TS 29001 Case Study

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• 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 API’s 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

API Q1/ISO TS 29001 Case Study

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• 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

API Q1/ISO TS 29001 Case Study

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• 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 sector-specific document so that final API and ISO standards would be identical

API Q1/ISO TS 29001 Case Study

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• How best to align API Q1 and ISO as a sector specific quality standard?– API’s 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

API Q1/ISO TS 29001 Case Study

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• One standard accepted globally

• One assessment / certification body accepted globally– Ensures consistency in audits– Eliminates variances in interpretations

• Prerequisite for doing business

API Q1/ISO TS 29001 Case Study

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• Conclusions:– API and ISO can work together successfully if the

vision and commitment is agreed at the project’s 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.

API Q1/ISO TS 29001 Case Study

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Xie Xie (Thank you)

Contact Information:

Stacey HagenDrilling Materials Sr. QA Advisor – OCTG LeadExxonMobil Global Service Company16945 Northchase DrHouston, TX 77060stacey.w.hagen@exxonmobil.com

API – www.api.org, standards@api.orgISO – www.iso.org, central@iso.org

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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 ItemTC Technical Committee

Back-Up Slide

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Back-Up SlideExample clause – ensures that documented methods are available for audit

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Back-Up SlideExample clause – ensures independent review of designs

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Back-Up SlideExample clause – ensures final acceptance inspection of product