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APPENDIX H COMMENTARY ON UNITED KINGDOM AND NORWEGIAN INSPECTION REQUIREMENTS The committee reviewed the rules and regulations governing United Kingdom (U.K) and Norwegian inspection of drilling and production operations. These cannot be related directly to the U.S. outer continental shelf (OCS) requirements in the Gulf of Mexico and the Pacific Coast because of differences in environmental conditions in the different areas. North Sea operations typically utilize large, enclosed structures with a high concentration of personnel in an environment characterized by severe cold weather, high waves, and cold seas. It is not uncommon for a North Sea installation to have over 200 personnel and to contain wells, drilling equipment, producing equipment, and quarters. There are long periods of time when safe evacuation of platforms is not possible and survival of individuals who might be cast into the cold water would be highly uncertain. U.S. OCS operations typically utilize structures of open construction (being thus well ventilated) which are much smaller than North Sea structures and contain much smaller quarters (up to 75 people). The environment is relatively benign. There are only short periods of time when evacuation is not possible, and abandonment by jumping into the water is feasible with an expected high survival rate. Although the safety risks being addressed are much different, it is instructive to review U.K and Norwegian inspection philosophies. While both countries are faced with similar situations they have elected different approaches to operational safety inspection due, in part, to their societal differences as well as to the manner in which the offshore industry developed in the two countries. UNITED KINGDOM In the U.K system, independent certifying agencies approved by the Department of Energy carry out most of the certification and inspection functions. The certifying agencies (1) review the original design and construction; (2) check calculations, quality control procedures, and documentation to ensure that design and construction conform to both the standards of safety required by the Department of Energy and those required by the certifying agency; and (3) issue certificates of fitness. The certifying agencies perform inspections at least annually to ensure that the structure and equipment are maintained and operated in accordance with these standards. This philosophy parallels that applied by the U.K. to its maritime industry. Indeed, five of the six approved certifying agencies are the historic "classification societies" used to "class" ships (i.e., ensure they meet safety standards) for insurance purposes. These are American Bureau of Shipping, Bureau Veritas, Det norske Veritas, Germanisher Lloyd, and Lloyds Register of Shipping. Halcrow Eubank and Associates Certification Group is also approved by the Department of Energy. Based on requirements in force as of September 1987. 108

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109 It is the responsibility of the operators to contract with one of these organizations to provide the n~sary initial Certificate of Fitness" and the necessary annual renewals. The regulations state, The owner has a statutory responsibility for the sound design, proper construction, and effective maintenance of his installation, including adequate supervision and inspection necessary to achieve these ends, but a valid certlucate or bltness IS evidence that an independent and responsible organization believes the owner to have honored his statutory obligations. The Department of Energy issues Guidance Notes to aid certifying authorities in ensuring compliance. Some of these (particularly those pertaining to structural integrity) are very specific, while others are much broader in scope, allowing room for interpretation by the certifying authoribr. An example of a broad statement is the requirement that the installation equipment be reviewed to assess that There are included those items which are required to be incorporated, that all necessary safety features are incorporated and that all equipment is in accordance with recognized standards. Examples of more specific instructions which still allow considerable leeway are as follows: Each pressure vessel is required to be examined by the certifying authority "externally and internally and tested as appropriate at intervals of time to be determined by the certifying authority." . . , . _ "It is the responsibility of the owner to perform regular tests and inspection of the ESD system . . . to be agreed between the owner and the Certifying Authority." An example of highly specific guidance is that which is provided for electrical system inspection. A brief excerpt is set out below: 2.2.1 Annual surveys The recommendations contained in the IKE RECOMMENDATIONS and the D.En. CODE should be carried out. A general examination should be carried out of the electrical installation (generators, switchgear, cables, cable glands, machined, lighting, etc.~. Without prejudice to the generality of the above the following should be carried out during a subsequent survey: Cable runs should be examined for sheath or armor defects and to ensure that the means for supporting the cable is in good order. Sample checks should be made of equipotential bonding conductors to verify the earth continuity path. Electrical equipment located in hazardous areas should be examined to ensure that it is suitable for the application and that the integrity of the protection concept has not been impaired. Alarms and interlocks associated with pressurized equipment and spaces should be tested to ensure correct operation. The emergency source of power, its associated circuits and, where fitted, the transitional emergency source of power should be tested.

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110 Even more detail is included for inspection and documentation of material and fabrication of structural members, and drilling and production components. For example: 3.6.4 Material Documentation and Identification Major load bearing and pressure retaining parts of drill through equipment should be manufactured with supporting documentation that ensures traceability through the manufacturing process. Components requiring traceability should be identified by lot number or individual serial number to maintain traceability throughout remanufacture. The component parts should be identifiable within the assembly. The owner should ensure that the manufacturer is responsible for maintaining this documentation on file and upon request for providing this information to the owner for his retention, for a period of not less than 5 years after shipment. Traceability documentation may include, but is not necessarily limited to the following: A. Material source report Chemical and mechanical properties for each heat Heat treatment temperatures and time at temperature Charpy temperature and impact values Hardness test readings (verification to NACE MR-01 -75) B. Manufacturing processes - Welding - Post weld heat treatment - Hardness test results (verification to MACE MR-01 -75) Hydrostatic pressures tests Dimensional check results 3.6.5 Documentation of Component Assemblies The manufacturer of assembled components should document the supporting information as related to the purchaser's requirements and maintain the same for his file. The owner may request the manufacturer to prepare a manufacturing report consolidating the documentation into a "data books for retention by the manufacturer. Specific data may be issued to the owner upon request. The manufacturing report should include the following documentation as appropriate: A. Purchase order number/sales order number B. Basic design criteria C. Assembly arrangement drawing with material identification and where used D. Manufacturer's statement of compliance E. Material documents - see Sub-Section 3.3 F. Welding procedure qualification Welder and operator qualification H. NDE operator qualification 1. NDE results - see Sub-Section 3.6.3 Assembly and pressure test report (including certified charts) K. As built overall dimensions and actual weights L. Independent design review document

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111 Although addenda to the Guidance Notes tend to add more detail (perhaps as specific problems are identified), there still is considerable leeway for the certifying authority to determine items to be inspected, inspection frequencies, and standards for inspection. The Department of Energy audits the certifying authorities to ensure that they are performing their responsibility in a competent and consistent manner. However, operators report that differences exist. It is said to be common, in inviting bids from certifying authorities to perform the work for a certificate of fitness, for the operator to receive a cost spread of 3 to 1 in the bids. This could indicate that the scope of the inspection effort may vary significantly among the approved certifying authorities. The nature and amount of effort expended by the Department of Energy in auditing compliance of certifying agencies was not determined by the committee. NORWAY The Norwegian Petroleum Directorate (NPD) uses it own personnel to monitor safety and requires that operators set up and comply with an approved internal control plan. The Norwegian regulations are more detailed than U.K regulations in regard to the overall work environment (e.g., standards of hygiene, medical equipment, work rules, quarters requirements, etch. The operator is required to develop and follow detailed safety instructions, contingency plans, and safety drills. A Safety Delegate Committee and a Work Environment Committee are required, with membership (which includes employees) and authority defined by the regulations. Detailed qualifications are prescribed for all drilling personnel, including service company personnel. The requirements for the internal control plan, on the other hand, are not specified in detail. For example: The drilling rig shall be inspected at "short intervals." BOP equipment shall be pressure tested and operated at "regular intervals." There shall be a Fire fighting plan." Licensee shall ensure that the platform and equipment are in "proper working condition at all times." nNecessary" safer system shall be installed and maintained in accordance with "good oilfield practice." However, because of the critical nature of the internal control plans in terms of their impact on operational safety, maintenance, and inspection, they are thoroughly reviewed by the NPD. Many operators hire "classification societies" (especially Det norske Veritas) to help them develop detailed internal control plans acceptable to NPD. However, it is the licensee's responsibility under threat of criminal penalty to ensure that the plan is implemented and followed. The amount of effort expended by NPD in auditing licensees was not determined by the committee.