Chip Evans Global Services Manager 480 North Sam Houston Parkway, East Houston, TX USA

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1 Presenter: Chip Evans Global Services Manager 480 North Sam Houston Parkway, East Houston, TX USA

2 Today s Presentation API s Origins API Today API Standards Development API Training Activities API s Certification Programs Application Process Global Participation and Trends Certification Benefits API in the Europe

3 API s Origins During WWI, the United States needed to improve its delivery of petroleum products to its armed forces in Europe A committee of experts was gathered, consisting of oil company executives to address the issue They found that drilling delays caused by incompatible equipment at drill sites led to inconsistent oil production and delivery. More standardization was introduced. After WWI, the oil and gas industry realized that its collaborative efforts had been successful and decided to continue working together In 1919, the American Petroleum Institute was formed in New York City

4 API s Origins For API s first 10 years, its primarily focus was on three specific areas: 1. Gathering of vital industry statistics 2. Proposing an acceptable tax code 3. Standardizing oilfield equipment Standardization provides uniformity of pipe sizes, threads, couplings and other equipment in the field. Standardization allows for equipment interchangeability. With interchangeability comes more sources of the standardized equipment.

5 API Today API is the primary trade association for the oil and natural gas industry. API is member-driven API s primary mission is to influence public policy in support of a strong, viable US oil and gas industry essential to meet the energy needs of consumers in an efficient and environmentally responsible way. API lobbies the federal and state legislative and regulatory bodies API is based in Washington DC and has a staff of approximately 250

6 API Today API provides an industry forum to develop consensus on policies and collective action on issues impacting its members API provides the opportunity for standards development, technical cooperation and other activities to improve the industry s competitiveness API represents more than 440 companies in every facet of the industry, including exploration and production, transportation, refining and marketing

7 API Today API divided into segments Upstream focuses on regulatory and legislative issues, industry standards and practices. API works to ensure industry operations are conducted in a safe, efficient and environmentally responsible manner Downstream focuses on refining, marketing and transportation of petroleum products to service stations Marine focuses on transportation of petroleum and petroleum products, marine terminal operations and the impact of federal, state and international regulations, industry standards and practices. We promote safe, environmentally sound and efficient marine transportation

8 API s Responsibilities to Industry Pipeline focuses on regulatory activities that directly affect the operators of petroleum pipelines. We provide a forum for the development of pipeline standards and the sharing of technical and operational information General focuses on domestic and international issues, particularly international trade issues since many members in this segment supply products and services worldwide API covers the entire industry.

9 API Standards Development API is a Standards Development Organization (SDO), and is accredited by the American National Standards Institute (ANSI) API maintains approximately 550 standards along with other publications API standards are in great demand globally, and many API standards have been adopted by ISO and others Who actually writes API standards? API standards are developed through an API organized, collaborative process that includes users, manufacturers and technical consultants

10 API Standards Development API solicits participation from ALL corners of the world, from all disciplines within the industry API convenes standard conferences for measurement, upstream, downstream and others twice annually. All meetings are open to public

11 API Training Activities Until recently, API training has been fairly limited in scope and in its availability outside of North America. The new APIUniversity includes: API sponsored training courses API & ABS (American Bureau of Shipping) joint courses Technomedia, providing Internet and computer based training

12 API Certification Programs

13 API s Certification Programs Monogram Program Perforator Design Registration Program Training Provider Certification Program API Spec Q1 Registration ISO/TS Registration Engine Oil Licensing and Certification System ISO 9001 & ISO Registration

14 Certification Programs Objective Certify the Individuals Individual Certification Programs Training Courses Certify the Management Systems Spec Q1 & ISO TS Registrations ISO 9001 Registration ISO Registration Certify the Products and Services Monogram Licensing Engine Oil Certification Comprehensive Coverage

15 Certification Programs Individual Certification Individual Certification Programs

16 Certification Programs Individual Certification Created to ensure a qualified supply of inspectors Based on API Standards: API Pressure Vessel (1989) API 653 Tank Inspection (1992) API Pipe Inspection (1996) Qualification of Ultrasonic Examiners API 936 Refractory Personnel Tank Entry Supervisor Service Station Contractors Safety Qualification Program (2006) OCTG Inspector Certification (? )

17 Certification Programs Individual Certification Exam takers must first qualify to take the test Most are pen and paper; one is practical exam Exams scheduled annually, wherever we find concentrations of interest Thousands of ICP Inspectors worldwide (None in Romania)

18 Certification Programs QMS Programs APIQR ISO 9001 Registration ISO TS Registration API Spec Q1 Registration

19 Certification Programs APIQR ISO 9001 Registration Started in late 1998 Built on API s quality successes Answered calls from industry Consistent with API s charge and core-competencies Expanded user-sources for good products and services Simplification / consolidation with other API certifications Fewer audits & less cost. APIQR Dual Registration & API QualityPlus

20 Certification Programs APIQR ISO 9001 Registration Scope Categories 02 Mining and Quarrying 10 Coke and Refined Petroleum Products 12 Chemicals 14 Rubber and Plastic Products 15 Non-metallic Mineral Products 16 Concrete and Cement 17 Basic Metal and Fabricated Metal Products 18 Machinery and Equipment 19 Electrical and Optical Equipment 20 Ship Building 28 Construction 29 Wholesale and Retail Trade 32 Renting of Machinery and Equipment 34 Engineering Services 35 Other Services (Testing and Analysis)

21 API Spec Q1 Registration ISO TS Registration the O&G sector-specific quality management standard.

22 Certification Programs API Spec Q1 & ISO TS Registrations Can we get API certified? No became YES! API Spec Q1 Registration says that the QMS meets API Spec Q1 for API and/or non-api products ISO TS Registration says that the QMS meets ISO s QMS for oil and gas equipment (e.g. QS 9000) API Spec Q1 and ISO TS are identical Includes 33 requirements beyond ISO 9001 that are valuable to industry

23 Certification Programs Spec Q1/TS Registration Scope Categories All products and services in the oil and gas industry

24 Certification Programs QMS Registrations Summary Apply for one registration or all three! APIQR ISO 9001 Registration API Spec Q1 Registration ISO TS Registration API QualityPlus

25 Certification Programs EMS Program APIQR ISO Registration

26 Certification Programs ISO Registration Intended to provide organizations with the elements of an effective Environmental Management System to achieve environmental goals Can be integrated with quality management requirements Improves API s ability to operate as a one-stop shop for industry registrations

27 Certification Programs Product Certifications Monogram Program Engine Oil Licensing and Certification

28 Certification Programs Monogram Program Since years! Originally created to: facilitate the availability of safe, interchangeable equipment and materials for general use in the petroleum drilling and production industry Based on compliance to API Spec Q1 and at least one API Product Specification Move from self-certification to third-party certification

29 Product Licensing Scope Series 1 Belting Series 2 Offshore Structures Structural Steel Pipe Offshore Cranes Steel Plate Series 4 Derricks & Masts Drilling and Well Servicing Structures Series 5 Tubular Goods Pipe Casing and Tubing Threading Series 6 Valves & Wellhead Equipment Series 7 Drilling Equipment Drill Bits Series 8 Hoisting Tools Series 9 Wire Rope Series 10 Oil Well Cements Cements Casing Centralizers Series 11 Production Equipment Sucker Rods and Pumps Pumping Units Series 12 Production Vessels Tanks, Dehydration Units Heaters, Separators Series 13 Drilling Fluid Materials Series 14 Offshore Safety Equip. Subsurface Safety Valve Equipment Series 15 Plastic Pipe Series 16 Well Control Systems BOPs, Choke, Kill and Control Systems Series 17 Subsea Systems

30 Certification Programs Monogram Program The Monogram Program is an Industry Program: Created by industry Standards drafted and maintained by industry Regulated and directed by industry

31 Certification Programs Monogram Program What does the API Monogram mark on a product mean? Licensee has QMS compliant with API Spec Q1 Licensee met the applicable API Product Specification requirements Invokes a warrantee between the licensee and purchaser, meaning that products meet the API Product Specifications

32 Certification Programs Monogram Program Use of the Monogram mark Only for approved, current Licensees (see Composite List) Only when API Spec Q1 & API Product Specifications are met License number & date of manufacture must be included Applied at any time during the manufacturing process, but must be removed if product is found to be nonconforming Can only be applied at the licensed facility

33 Certification Programs Monogram Program 70 API Products Specifications in the Monogram Program mostly Upstream segment of Industry API Committee on Refinery Equipment approved standards for Downstream inclusion: 547 & 548 electric motors All API valve standards More coming soon!

34 Certification Programs EOLCS Certifies that blenders and marketers of engine oil used in automobiles meet latest API standard for product quality Applicants submit detailed information about the base oils they use and other various chemical calculations, etc. Later, engine oil from these licensees is purchased from a shop and sent to a lab for testing 500+ certified lube companies. (None in Romania)

35 API Application Process

36 Application Process Application submittal Application documents, Quality Manual, Application fee Application process QM review and acceptance Schedule on-site audit Perform audit. Full each location. Audit length is based on many factors: scope, number of employees, existing QMS, etc. Non-conformance redress Issuance of applicable certificate

37 Global Participation and Trends

38 Global Participation Monogram Growth March 02, Licensees 248 Applicants 3037 Licenses 363 Applicants 76% Non-USA 67 Countries

39 API Monogram Program Licensees / Licenses by Country Country Licensees Licenses USA China India Canada Italy United Kingdom Japan 53 99

40 API Monogram Program Licensees + Applicants by Country Country Licensees Licensees + Applicants USA China India Canada Italy United Kingdom South Korea 53 61

41 API Monogram Program Licensees + Applicants by Region Jan-02 Nov-03 Mar-06 North America Asia Pacific Europe South Asia South America SE Asia Middle East

42 API Monogram Program Licensees + Applicants by Region ` 348 No. America So. America SE Asia So. Asia Europe Middle East 100 Asia Pacific 0 Jan. 02 Nov. 03 Mar. 06

43 API Monogram Program Licensees + Applicants by European Country Country Licensees Licensees + Applicants Italy UK Germany Russian Federation France Romania Spain Turkey Ukraine 9 11 Poland/Czech Republic 7 8 Austria/Greece 4 4 Hungary 3 3 Slovak Republic 2 2 Belgium, Macedonia, Croatia, Slovenia 1 1

44 API Certification Benefits

45 Certification Benefits Benefits to Purchasers API s programs help purchasers locate suppliers capable of producing to API quality and product specifications Improves quality of products Reduces or eliminates the need for 100% purchaser on-site audits. Saves purchasers time and money

46 Certification Benefits Benefits to API Certified Companies API s name carries a strong reputation in the industry API is supported and guided by our industry with direct and immediate feedback from its committees API provides a consistent review. Other registrars sometimes have varying interpretations. API staff review every QM, every audit, every non-conformance, worldwide. That promotes fairness and consistency. This is especially relevant to companies with multiple facilities API auditors are qualified, calibrated and evaluated. Auditor Summits are held every 2 years Marketing support: API Composite List, How to Purchase Monogram Equipment

47 Certification Benefits The API Composite List Identifies certified companies: API Monogram Licensees APIQR ISO 9001 Registrants API Spec Q1 Registrants ISO TS Registrants Registered Perforator Designs Registered Training Course Providers Describes the scope of applicable API / ISO certification

48 Certification Benefits The API Composite List Includes all contact information Company name Physical address Phone, Fax, , Website Published and distributed to over 3000 purchasers, API certified companies and other interested parties annually

49 Certification Benefits The On-line Composite List Search by company name, API Spec, key word, certification number, others Advanced search options add country, region and others Highlights with Top 10s Applicants Auditors Updated weekly

50 Helping You Get The Job Done Right.SM

51 Search Criteria

52 Helping You Get The Job Done Right.SM

53 Helping You Get The Job Done Right.SM

54 Helping You Get The Job Done Right.SM

55 Helping You Get The Job Done Right.SM

56 Certification Benefits How to Purchase API Monogram Equipment To educate the consumer and the Monogram licensee. Presented in 4-hour or 8-hour workshops Focuses on a methodology that reduces the risk of inadequately specifying API Monogram equipment Presentation includes informative, easy-to-understand lecture materials and workshop exercises to improve under-standing of the API Composite List, the API Monogram Licensing Program requirements, the purchasing guidelines in API product specs and API Non-conformance Reporting system

57 Certification Benefits How to Purchase API Monogrammed Equipment API Monogram and Licensing overview The history of the API Licensing Program Requirements for API Monogram Licensees Application Process Requirements to follow when accepting API Monogram orders Overview of oilfield equipment purchasing The standard purchasing process is explained with specific emphasis on the petroleum, petrochemical and natural gas industry Discussion will be encouraged to provide specific cases or activities that may be involved for individual organizations We will tailor to the specific purchasing processes of the host organization

58 Certification Benefits How to Purchase API Monogrammed Equipment Choosing appropriately licensed manufacturers The API Composite List (explanation and exercises on-line) Exercises include determining and selecting Licensees for applicable specifications, geographic locations, and product types Specifying appropriate technical and quality requirements Process for determining and specifying the appropriate technical and quality requirements for API Monogram products Exercises to familiarize participants with the API Monogram Purchasing Guidelines Handbook Handbook includes Purchasing Guidelines from each applicable API Specification in the API Monogram Licensing Program

59 Certification Benefits How to Purchase API Monogrammed Equipment Verification of technical and quality requirements Methods to verify the specified purchasing requirements Information includes monitoring, inspection and testing of products and verification of the corresponding documentation Tailored for specific organizations Field nonconformance reporting Licensee requirements for processing field nonconformances Recommended reporting practices for the purchaser API responsibilities API Field Nonconformance Reporting website is visited and the methodology for reporting field nonconformances is demonstrated

60 Certification Benefits How to Purchase API Monogrammed Equipment The best part?.it s free.

61 API in Europe and beyond API Certification Programs and Moody International have agreed to jointly promote API in Eastern Europe. API will increase the number of qualified auditors. API will participate in more regional events, interact more regularly with the end-user community, and endeavor to provide better service to its clients. API will open its first overseas office this year in China, followed by India and the Middle East by The offices will focus on the promotion of API Certification Programs, Training, and Standards.

62 Summary API represents the entire oil and gas industry. API standards are vital to the industry. API certification programs are vital to the industry. API has a proven record in the certification business. API certifications are recognized and respected worldwide. API s aim is to be a fully integrated source of quality: to certify personnel who work within certified management systems that manufacture certified products

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