BP Shipping 2009

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					Quality Assurance and Risk
   Management in BP

      Catherine Hall
HSSE


BP Group HSSE Goals are simple…

     No Accidents
     No Harm to People
     No Damage to the Environment

Wherever BP have control or influence we will work with others, our
partners, suppliers, competitors and regulators to raise the standards
of our industry.


          Environment is an area that we (BP Group) have chosen
                             to be distinctive in.

                                                                         2
  BP Shipping
  Clean Seas, Safe Ships, Commercial Success

BP Shipping is the centre of shipping expertise for BP group
“ providing safe, environmentally responsible marine and shipping solutions in support of BP
  Group Strategy
“ providing assurance on ‘all that floats’
“ value adding through commercial operation of oil tanker assets, using a combination of spot,
  time charter and BP operated vessels.
“ technical operation of group controlled assets




                               the people
                               594 shore staff
                               1280 officers
                               120 cadets
                               960 ratings
   Current Fleet

                               SUEZMAX
BP operated                    3-1990’S BUILT H CLASS

4 x VLCCs
1 x Shuttle Tanker
8 x LNG
4 x LPG
20 x 100kdwt
12 x 47kdwt
7 x 37kdwt
21 Regional Vessels
       (US Flag, UK Coasters
       and East Med Fleet)

time chartered
101 Vessels

Total: 178 vessels
                                            BP Shipping carries 50% of group cargoes
               HYDROCARBON ON WATER




   45% of Group Cargo carried on Operated or TC tonnage


Total cargo volume shipped:                               283 m tons
                                                                                                                        US$5.5bln (est.)
                                                                                     Value of Owned Fleet:
Total number of voyages:                                  7,502                                                          Apprec. >30%
Utilization of OTC fleet on BP business                   50% (2000) to 82% (2008)
                                                                                                                         15 yrs (2000)
                                                                                     Average Age of Vessels (>9k dwt)
                                                                                                                         2.5 yrs (2006)
 It is all about reducing the risk to BP

Operated & Time chartered                                                     Spot

BP’s controls                                                                 tanker industry improve global tanker standards
      “ design
                                      tankers used by BP                      by influencing through
      “ build
      “ operation                                                                     “ oil majors
      “ procedures                                                                    “ Ship owners
      “ maintenance                                                                   “ legislation
      “ people
      “ deployment                                                             12,000 ships in database
      “ Disposal
      “ Tc assurance                                                          pool of vessels used by BP
                                                                              improve quality by
target                                                                            “ setting standards
                                                                                        ”   age
Approx 50% of group cargo                                                               ”   double hull policy
carried on operated and T/C vessels                                                     ”   operational requirements
                                                                                        ”   operating procedures
                                                                                        ”   manning training
objective                                                  2000-3000 ships       “ confirmed by
no accidents, no harm to people                              acceptable for             ” inspection
no damage to the environment                                   BP business              ” management audit
                                                                                        ” structural review
 Risk Management on a good Ship…

“ PROCEDURES - Management Systems and Guidance. E.g. ISM Code, SOLAS, MARPOL, ISGOTT,
  Company operating procedures (Procedural Risk Control)


“ PEOPLE - Experienced & Motivated staff committed to the management systems - both onboard the ship
  and ashore. (Active Risk Control)


“ SHORE MANAGEMENT - Providing self regulating audit and support functions. Ensuring adequate
  design and maintenance. (Procedural + Active + Inherent Risk Control).
Control of Shipping Risk


   Strategic                     Operational                   Influencing

                                                           OCIMF                 TSCF


                             Design-Operation-Audit

Shipping                            Owned                            IMO




 policies
                           Set standards-Audit-Vetting             Flag/Port
                                                                     State
                              Voyage chartered

                                                                   Legislation
                      Set standards-Operations-Audit

 Balance risk                  Time Chartered                Raise standards so
   reward                                                BP quality control not req’d
                       Control quality to minimise
                                  risk
Assurance Team - Role

“ To provide Assurance to the BP Group that the risk involved in moving oil/gas/dry bulk around the
  Globe has been minimised as much as possible.


“ To constantly improve that level of Assurance ahead of public expectations.


“ To work with the BP Group to facilitate business in a safe and proper manner by working with
  ‚owners‛ to develop their understanding and appreciation of our goals.


“ To work with the industry to raise standards.
Raising The Bar


“ A ship is considered unacceptable unless positively identified as
  otherwise.

“ The ship vetting team assesses ships for suitability for BP
  business, based on a range of criteria including management,
  operations, crewing and structural standards, using its own
  inspection reports combined with those shared across the
  industry.




“ BP Shipping conducts time charter executive CEO forums to improve the safety performance and standardize
  the reporting of the time chartered fleet
BP - Direction on Double Hull

The following changes to the BP Group shipping policy will apply to all sea-going movements which are subject to be
vetted(1).


From January 2008, all vessels greater than 600 dwt carrying hydrocarbons (i.e. including non-persistent or 'clean' oils)
shall be double hulled.


Notes:
(1) The policy applies to all vessels carrying hydrocarbons in bulk except barges (being vessels which are trading exclusively in inland waters, harbours and estuaries)
(2) In brief this will cover all crude oils, residual fuel oils, vacuum gas oil, atmospheric and vacuum residues, lubricating oil and lubricating base oils, but please consult the BP
Shipping Assurance team for further detail.
BP - Direction on Age

The following changes to the BP Group shipping policy will apply to all sea-going movements which are subject to be
vetted(1).


From January 2008, all vessels greater than 5,000 dwt shall be less than 20 years of age, and all vessels below 5,000 dwt
shall be less than 25 years of age.


Notes:
(1) The policy applies to all vessels carrying hydrocarbons in bulk except barges (being vessels which are trading exclusively in inland waters, harbours and estuaries)
(2) This date applies to the date on which the vessel is vetted, and not the date on which the voyage takes place.
(3) Excluding LNG carriers where the age limit will be 40 years, and all other gas carriers where the age limit will be 25 years, both age limits applying up to and beyond 2008.
Other BP Requirements

Vessels (ex. LNG) > 15 years of age and > 20,000 dwt
The vessel should hold a Condition Assessment Programme (CAP) rating of 1 or 2, issued under an acceptable
scheme. This should be obtained by the first dry dock after the vessel’s 15th anniversary of delivery date, and should
include a hull fatigue analysis. The CAP certificate will be acceptable to BP Shipping for three years. A three month
period is allowed after the relevant dry dock to allow the Classification Society to produce the documentation. An
extension to four months may be permitted on production of a Class attestation.


Tanker Management Self Assessment (TMSA)
Vessel manager must have submitted a TMSA to OCIMF to be considered for BP business.
 Making the decision
     OWNER REPUTATION


       OWNER AUDITS


      SHIP INSPECTIONS

       SIRE REPORTS

                                                                         YES
        CDI REPORTS
                                The Vetting
    TERMINAL FEEDBACKS           Decision                                NO
    CHARTER FEEDBACKS                                                More info
       CASUALTY DATA
                                                                     Required

       FLAG CHANGES

MANNING/MANAGEMENT CHANGES


CLASSIFICATION SOCIETY CHANGE
                                       Positive Information MUST be available on a
     MARKET INTELLIGENCE               vessel to allow an assessment to be carried out.
        STRUCTURAL ASSURANCE
Does Vetting Work ?


                                  Ship Vetting Casualty Ratio
                                                                               Jan 1994 to Date

100%
 90%
 80%                                           Vetting Ratio
 70%
 60%
 50%
 40%
 30%
 20%
 10%
 0%
                Jul-94



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                           Running 12 Monthly Vetting Ratio                                                                  Worst                                        Best