Safety Case Arctic I_Transocean.pdf

Title:

Arctic 1 HSE SAFETY CASE

Revision Status:

Level: L3 Classification: Procedure Manual Number: AC1-HSE-PR-01 Issue Number: 01 Revision Number: 01 Revision Date: 2009

Transocean NONCONTROLLED

ARCTIC I HSE CASE PART 1

Introduction and Executive Summary

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Blade Offshore Services Ltd 2009

PART 1




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TABLE OF CONTENTS SECTION PAGE

1. HSE CASE; INTRODUCTION & EXECUTIVE SUMMARY ................................................... 3

1.1 INTRODUCTION ................................................................................................................. 3 1.1.1 Purpose of the HSE Case ...................................................................................... 3 1.1.2 Document Update ................................................................................................ 3 1.1.3 Abbreviations ....................................................................................................... 4

1.2 THE TRANSOCEAN HSE CASE FOR ARCTIC I ............................................................................ 5 1.2.1 HSE Case Overview .............................................................................................. 5

1.3 MANAGEMENT DEMONSTRATION............................................................................................. 5 1.3.1 Senior Management Commitment ....................................................................... 5 1.3.2 HSE Case Responsibilities .................................................................................... 6 1.3.3 HSE Case Reviews & Updates .............................................................................. 6 1.3.4 Continuous Improvement .................................................................................... 6

1.4 HSE CASE STRUCTURE ........................................................................................................ 7 1.4.1 IADC Template ..................................................................................................... 7 1.4.2 Part 2 Drilling Contractors Management System ............................................ 7 1.4.3 Part 3 MODU/Rig Description & Supporting Information ............................... 7 1.4.4 Part 4 Risk Management .................................................................................. 8 1.4.5 Part 5 Emergency Response ............................................................................. 8 1.4.6 Part 6 Performance Monitoring ........................................................................ 8

1.5 ARCTIC I CONSTRUCTION DETAILS ....................................................................................... 8 1.5.1 Design .................................................................................................................. 8 1.5.2 Operational intent ................................................................................................ 8 1.5.3 Class and Compliance .......................................................................................... 9 1.5.4 Accommodation ................................................................................................... 9 1.5.5 Major Modifications since new ............................................................................ 9

1.6 JUSTIFICATION FOR CONTINUED OPERATION ............................................................................. 9 1.6.1 Continued Operation ............................................................................................ 9 1.6.2 Management Systems ........................................................................................ 10 1.6.3 Process for Hazard Identification ...................................................................... 10 1.6.4 Management of Risk and ALARP ....................................................................... 10 1.6.5 HSE Compliance ................................................................................................. 11 1.6.6 Commitment to close CARs .............................................................................. 12 1.6.7 Statement of continued Operation .................................................................... 12 1.6.8 Management Commitment for continued compliance ...................................... 13 1.6.9 Areas for Continued Enhancement .................................................................... 14

1.7 REFERENCES ............................................................................................................... 15 1.7.1 Documentation................................................................................................... 15



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1. HSE CASE; INTRODUCTION & EXECUTIVE SUMMARY

1.1 Introduction

1.1.1 Purpose of the HSE Case

1.1.1.1 The ARCTIC I HSE Case provides the means for formally demonstrating how Transocean applies a systematic risk management approach to maintain and improve Health, Safety and Environmental operational performance.

1.1.1.2 The HSE Case will fulfil two primary functions;

Provide clear evidence of the systematic process of assurance within the Transocean organisation, that the systematic management system processes for reducing risk, are in place and effective, and meet the companys expectations.

Provide clear evidence to relevant third parties; Clients, necessary Regulatory bodies, Coastal States organisations, of the formal management system processes for reducing risk as applicable to the ARCTIC I operation

1.1.1.3 The HSE Case is documented as demonstrating the ARCTIC I and Transocean Compamy Management System status at a moment in time. However the Case demonstrates a dynamic process of continuous assurance that the HSE risks are effectively managed and provides assurance that risks associated with changes to equipment, activities or locations, as well as system weaknesses identified by incident analyses and audits will be effectively managed.

1.1.2 Document Update

1.1.2.1 The text within this section of the case has been updated in the light of the change of ownership of the ARCTIC I and the integration of the unit into the Transocean Management system. In some areas it is necessary to describe the original systems in place and where appropriate reference regarding sections of the Corporate Management system is reference in terms of the current system as applied.



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1.1.3 Abbreviations

1.1.3.1 As identified within the text. Abbreviation Definition ABS American Bureau of Shipping (Class Society) AIS Automatic Identification System ALARP As Low as Reasonably Practical API American Petroleum Institute BOP Blow Out Preventer CA Corrective Action Request CCTV Closed Circuit Television CDP Company Designated Person CMS Company Management System DNV Det Norsk Veritas (Class Society) GMDSS Global Maritime Distress Safety System GMS Global Management System HS&E Health and Safety Executive (UK Government body) IADC International Association of Drilling Contractors IMO International Maritime Organisation IRR Improvement Requirement Report ISM International Safety Management System ISO International Standards Organisation MODU Mobile Offshore Drilling Unit OIM Offshore Installation Manager PLC Programmable Logic Controllers SIEP Shell International Exploration and Production SOOB Summary of Operation Boundaries SSAS Ship Security Alert System USCG United States Coast Guard



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1.2 The Transocean HSE Case for ARCTIC I

1.2.1 HSE Case Overview

1.2.1.1 The ARCTIC I HSE Case as now amended identifies that since the ownership of the unit was transferred to Transocean in 2007 the level of risk management as identified within Rev 1 of the Case issued under the previous GlobaSantaFe ownership, continues to sustain a high level of risk management and control and this amended Case continues to demonstrate that the level of risk associated with the safe operation of the mobile offshore drilling unit is as low as reasonably practicable (ALARP). As a consequence the Case will also demonstrate compliance with the Transocean HSE management system which integrates the IMO International Safety Management System and the Shell Operating criteria for the operation in the Brazil locations.

1.2.1.2 The documentation will reflect the inclusion of the ARCTIC I workforce and external specialist throughout the Hazard Identification and Risk Assessment processes which were then developed onwards for 4 detailed SOOB/Bow Tie review for the conditions that were identified as being of a sufficient potential as requiring further analysis and investigation.

1.2.1.3 The Transocean health, safety and environmental management system recognizes the importance of loss control and risk management in achieving commercial success. To remain competitive there is a need to achieve continuous improvements in our ability to manage the risks associated with our business. It is the cornerstone of this management system that continuous improvements in risk management are derived from a motivated workforce, committed, from senior management level downward, to accepting responsibility for their own safety, that of their colleagues working alongside them and protection of the environment.

1.2.1.4 The Case and its contents are approved by the Managing Director and is considered an integral part of the ARCTIC I.

1.2.1.5 This Case remains valid for the ARCTIC I in a stand alone operating condition, in the event that the operation is extend to cover any Combined operations with other units, the case will be re-visited and the necessary management systems reviews and risks assessments made to ensure that the hazards presented by this new operation are suitable covered with full communication to both Management and Work force.

1.2.1.6 The Case outlines the safe operating envelope of the MODU and as such forms part of our management system documentation and may be revised in accordance with good industry practices and applicable legislation.

1.3 Management Demonstration

1.3.1 Senior Management Commitment

1.3.1.1 Management commitment is demonstrated at the highest level through the formulation, review and updating of Health and Safety, and Environmental Policy Statements and the involvement of the Transocean Corporate Management Team. The objectives of these policies are achieved through the development of related management strategies by the Brazil Management Team



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participating through the provision of personal leadership, based on the drive for continuous improvement.

1.3.1.2 By virtue of the integration of the International Management system (for Safe Operation of Ships and Pollution Prevention) within their own CMS the Company demonstrate a commitment to compliance to this system through external audit by IMO approved bodies, in this case ABS. Hence the Transocean CMS stem is subject to the highest level of external audit and command a level of visibility that assures the highest level of commitment.

1.3.2 HSE Case Responsibilities

1.3.2.1 This Case and its contents are approved by Transocean Managing Director.

1.3.2.2 The ARCTIC I Rig Manager/Performance is the owner of the case and is responsible for reviewing and accepting that ownership. As the Custodian, the Onshore QHSE Manager and, in conjunction with the Rig Manager/Performance, is responsible for ensuring that the Case is implemented and complied with.

1.3.3 HSE Case Reviews & Updates

1.3.3.1 The ARCTIC I HSE case is a live document that reflects the ongoing operation of the unit the associated risk and the management of the risk mitigation process to provide a safe place of work at all times.

1.3.3.2 The case is deemed relevant at time of issue, however it is only normal that system and operational changes will occur that will effect the day to day risks and the management of those risks to one degree or another, hence review on the case will at the first instance depend on an assessment of the relevance of the existing documentation being made by the relevant personnel onboard ARCTIC I.

1.3.3.3 Development, maintenance and review of the Case in accordance with regulatory requirements, changes in corporate policies, or corporate standards is carried out by the Transocean QHSE Director who will determine whether a revision to the Case is required. The decision process to update the Case is primarily based on whether the proposed change affects, materially, the risk to individuals working offshore.

1.3.3.4 In accordance with the Company Management system the HSE Case for the ARCTIC I will be subject to periodic review in accordance with the Management of change process utilizing the START and THINK processes.

1.3.4 Continuous Improvement

1.3.4.1 Continuous review is an objective of the Transocean management system. The HS Manual reflects the broad band of these objectives which are devised to ensure that Transocean strives to continuously improve the safety performance of all aspects of operations through the observation identification and reduction of at risk behaviours and the elimination of incidents.

1.3.4.2 Within the Transocean units this policy is supplemented at the work place by the FOCUS process [HQS HSE PP 01 Sec 4 6.2] which provides the facility of formal recording either as a result of non conformity situation or as a result of a pro-active observation through the Focus system.



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1.3.4.3 Hence a broad spectrum for Continuous improvement of the Case exists through both management review and workforce involvement.

1.4 HSE Case Structure

1.4.1 IADC Template

1.4.1.1 The construction of the Case will reflect the template established in the IADC document Health, Safety and Environment Case Guidelines for Mobile Offshore Drilling units, Global Version 3.2, October 2006.

1.4.1.2 The Case is comprised of 6 sections, section 1 being this introductory section complete with executive summary. The 5 remaining sections are closely linked and form the core Case due to their relationship around the overall Risk Management section.

1.4.1.3 The schematic below identifies the 5 sections of the case.

Risk Management

Part 2Drilling Contractor's Management System

Part 3 Rig Description

& Supporting Information

Part 4 EmergencyResponse

Part 6 Performance

MonitoringHSE Management Assurance

1.4.2 Part 2 Drilling Contractors Management System

1.4.2.1 This section will describe the Transocean HSE management system and will identify the management objectives that will be met to demonstrate assurance that the HSE risks are reduced to a tolerable level. The methods of achieving the HSE management objectives are considered in Part 4.

1.4.3 Part 3 MODU/Rig Description & Supporting Information



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1.4.3.1 Section 3 will provide the equipment and systems necessary to meet the HSE management objectives described in Part 2 and to fulfil the requirements of the Transocean scope of operations. The equipment and systems mill be considered in Part 4

1.4.4 Part 4 Risk Management

1.4.4.1 This part of the Case will describe the Risk Management process for assuring that the risks associated with the scope of operations are reduced to a level that is tolerable to the owner and all other parties with an interest in the operation, e.g. the owners client. The Risk Management process will consider the HSE management objectives described in Part 2 and the systems and equipment described in Part 3.

1.4.5 Part 5 Emergency Response

1.4.5.1 Part 5 will describe the management objectives for emergency response to incidents which will mitigate the potential consequences/severity identified through the analysis work undertaken in Part 4. The HSE management objectives included in Part 5 are considered in Part 4 as a part of the iterative assessment analysis process.

1.4.6 Part 6 Performance Monitoring

1.4.6.1 Part 6 identifies the vessel specific arrangements for system monitoring to ensure that risk management measures identified in Part 4 are implemented, maintained and effective at the work place. Regular monitoring at the workplace is also a risk reducing measure considered in Part 4.

1.5 ARCTIC I Construction Details

1.5.1 Design

1.5.1.1 The ARCTIC I mobile offshore drilling unit (MODU) was built in by Rauma Repola Oy at Mantyluota Shipyard in Finland in 1983. The MODU is a Friede and Goldman model L907 series enhanced pacesetter design

1.5.2 Operational intent

1.5.2.1 The layout and mobility of the MODU make it well suited for drilling operations in connection with the following:

Exploratory drilling Appraisal drilling Development drilling Work-overs Well tests Early production Subsea completions High pressure/high temperature

1.5.2.2 The MODU can also be used for certain offshore construction operations and can be modified



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to allow it to be used as an accommodation vessel.

1.5.3 Class and Compliance

1.5.3.1 The ARCTIC I is classed and surveyed by the Det Norsk Veritas (DNV) society for compliance to the standard notation:

+1A1 Column-stabilised Drilling Unit CRANE HELDK Non-self propelled

1.5.3.2 This notation indicates compliance to the following class standards;

+ Vessel built under the supervision of DNV 1A1 Indicates that the hull, machinery, and equipment comply with the

relevant sections of the DNV class rules.

Column-stabilised Indicates vessel design concept CRANE Indicates the cranes are compliant to DNV Class construction rules HELDK Indicates the Helideck is compliant to DNV Class construction rules Non-self propelled The rig is not considered as a self propelled unit

1.5.3.3 The ARCTIC I is registered with the Flag State administration of the Port of Vila in Vanuatu

1.5.4 Accommodation

1.5.4.1 The crew accommodation is provided within the main superstructure block extending the full breadth of the vessel at the forward end. This places the location as far as reasonably practical away from the drill floor. Accommodation is provided for 116 persons.

1.5.5 Major Modifications since new

1.5.5.1 A number of major modifications have been made to the MODU since building, carried out in conjunction with the Certifying and Classification Authorities. These include

Upgrading the drilling facilities for high pressure high temperature drilling Installation of a Varco TDS-4H Topdrive and derrick extension KEMS system A Refined solids control system

1.5.5.2 In 1996 / 1997 further upgrades were carried out including: Installation of four column blisters to increase Rig stability Installation of starboard midship deck infill extensions to improve deck storage Installation of a 3rd Mud pump to provide back up and higher pumping

rates/volume

1.6 Justification for Continued Operation

1.6.1 Continued Operation

1.6.1.1 The case demonstrates the active Management System originally pursued by the former owner have been seamlessly transferred to Transocean for the safe operation of its global facilities and in particular the ARCTIC I. The application of this management system and in particular the pro



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active Hazard Identification and Risk reduction measures it employs are demonstrated within this Case as supporting the continued safe operation of the unit.

1.6.1.2 These systems in place are fully supported by Transocean management through their objectives for the continual enhancement of safe systems of work and the strategy of continual improvement through the management of change process.

1.6.2 Management Systems

1.6.2.1 The Company Management System provides managers and supervisors at all levels (corporate and installation) with expectations represented by principles, policies and procedures, which are intended to motivate people to execute work safely and effectively to achieve results. Managers and supervisors are responsible to ensure their people understand their responsibilities as described in the Company Management System.

1.6.2.2 The Company Management System establishes consistent standards across the companys worldwide operations and is the mechanism for promoting and sharing lessons learned and continuous improvement within the organization. The purpose of the Companys Management System is to provide the platform for people to create value and prevent loss, achieved by meeting expectations through applying appropriate controls (principles, policies and procedures) embodied within the management system.

1.6.2.3 The Company Management System communicates to employees the values and Company leadership expectations required to conduct business that lead to extraordinary service and performance excellence

1.6.2.4 These processes are fully documented and accredited through audit by internationally accredited bodies. These Management systems provide the elements that drive the daily management regime of the organisation. The ARCTIC I is full included within this Management system and through the inclusive verification process by the external bodies, its active compliance to the established standards will be confirmed.

1.6.3 Process for Hazard Identification

1.6.3.1 This HSE Case indicates the formal philosophy adopted for the process of Hazard identification. To ensure the process was location and vessel specific the formal process was undertaken through a set of formal objective discussions involving both ARCTIC I personnel, supporting Management and representatives from the client. This ensured full coverage of the work scopes to be undertaken and the Hazards attributable, in terms of the specific requirements of the ARCTIC I, and personnel involved.

1.6.4 Management of Risk and ALARP

1.6.4.1 The formal process of Hazard identification provided the initial stage in the Management of risk. The Hazard Registry was developed using the SIEP established format but extended where thought relevant to cover the specifics of the operations under evaluation.

1.6.4.2 The process of risk evaluation for each hazard within the context of each scenario was considered and evaluated using a standard Risk Matrix format. The Matrix based upon the IADC template but modified in line with SIEP and the owners criteria. Throughout this evaluation process the Matrix was used to define the severity of the consequence in relation to;



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People Asset Environment Reputation

1.6.4.3 The frequency of the event was considered under the realistic pragmatic approach of the recorded historical frequency of similar events. The basis of Consequence and severity was considered for all hazards and the rating indicated on the hazard registry sheet.

1.6.4.4 The process of determining risk in terms of status with regard to ALARP (A risk deemed to be as low as reasonably practical) required the identification of all necessary controls or Boundaries and the allocation and evaluation of the effectiveness of those controls.

1.6.4.5 The analysis identified four specific cases in need of further analysis and this was undertaken again through the convening of a formal working party. The format for the analysis being the Bow Tie principle.

1.6.4.6 These final extensive studies evaluated the integrity and consistency of the identified barriers evaluating the effectiveness against a declared standard for;

In place and being used Reliability Human factors

1.6.4.7 The final decision on meeting the ALARP standard being a declared rating of above a zero position indication.

1.6.4.8 The four hazardous criteria analysed were found to meet a standard indicating that;

Hardware and Supervision are in place and effective for greater than 75% of the time AND

Reliability was adjudged as in operation and effective for greater than 95% of the time AND

Clearly defined task, defined operating procedures, operator is trained and experienced, or errors conceivable but very unlikely.

1.6.4.9 On the basis of the formal studies that were undertaken using identifiable and established industry guidelines and procedures it was established that for the period of the operation in the Brazil Offshore sector operational risk had been adjudged as meeting the ALARP principle in all states for the vessel in its current operating configuration for the given location and client requirements

1.6.5 HSE Compliance

1.6.5.1 Transocean integrate the ISM management system to their core HSE Management system. The ISM system requires periodic verification of compliance by external bodies, hence compliance to the overall objectives of the management system will be assured through the mandatory internal and external audit processes.

1.6.5.2 Within this compliance evaluation process any areas of non compliance will be subjected to the FOCUS system and documented for processing and attention within that system.



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1.6.6 Commitment to close CARs

1.6.6.1 Any item identified and recorded within FOCUS as requiring a formal action is required to be assigned a suitable close out date.

1.6.6.2 The FOCUS Improvement Process incorporates a planning and tracking tool (FOCUS tool) located within the Global Management System (GMS) as a means to efficiently manage the steps of formulating the plan, organizing the resources, communicating the plan, undertaking the improvement/corrective opportunities and summarizing the results.[HQS HSE PP 01 Sec 4 6.2 4.1]

1.6.6.3 The FOCUS procedure enables the Company to identify, establish and document the cause(s) of any known nonconformity or potential nonconformity within the Management System (MS) and to apply the appropriate corrective/preventive action which best addresses the nonconformity and prevents occurrence or reoccurrence.

1.6.6.4 As the FOCUS system application is based in the Transocean Intranet Global Reporting System data posted on the system regarding ARCTIC I activities will be visible to the onshore and offshore management teams and to the layers of senior management with authority involving the unit. The ARCTIC I Rig Manager, OIM and Supervisors all have a responsibility to review this data and raise any issues at the relevant HSE meetings to ensure a suitable close out of any action items is required.

1.6.7 Statement of continued Operation

1.6.7.1 The Case demonstrates that through the application of the Transocean Management system, the expected day to day hazards associated with operations for SIEP at the location offshore Brazil, as analysed and assessed through a formal documented process, are found to be within a suitable level of acceptance, to enable operations to continue.

1.6.7.2 The Case demonstrates that ARCTIC I is compliant to all mandatory Class, Flag state and Coastal State legislation, and that the application of the Transocean Management system will continue the rig within that level of compliance to maintain its maritime occupation.

1.6.7.3 The application of the Company Management system ensures the vessel operational regime adopts the highest level of Industry practices, as supported by the clear mission statement of Transocean.

1.6.7.4 Transocean have established objectives which are endorsed at the highest level. The Management system is established in a framework that clearly supports the pursuit of these objectives which in turn will provide the fundamental basis for continuing the enhancement of safety at work through the reduction of risk. In the adherence to the company Management System ARCTIC I subscribes and pursues these objectives.



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1.6.8 Management Commitment for continued compliance

1.6.8.1 Within the declared management objectives set out in the Transocean Health and Safety Policies and Procedures Manual, the commitment for continued compliance is assured within the following declared intent;

HSE Policy;

Management at Transocean is fully committed to conduction operations in an incident free workplace all the time, everywhere. Proactive individual involvement, personal responsibility, accountability, and continuous improvement are expected of all employees, clients and subcontractors. The Health and Safety Management System is designed to align all stakeholders efforts to enable attainment of these objectives.

HSE Management is a line management responsibility. Visible management commitments and involvement is essential at all levels.

Quality Policy

Transocean is committed to providing high quality well construction services which meet or exceed the needs of our customers and comply with the requirements of the Company

The Company will manage systems and processes which are designed to deliver value and prevent deficiencies in quality. Quality means;

1. Compliance with applicable laws and regulations 2. Compliance with Company policies, procedures and standards 3. Conformance to agreed customer requirements

The quality system will promote and maintain service quality and facilities continuous improvement within each business section.

All employees are responsible for quality of services to internal and external customers. All Employees shall be familiar with and apply the policies and procedures of the Company.

Environmental Policy

Transocean is committed to conducting business and operational activities in a responsible manner which limits adverse impact to the Environment and promotes the effective use of resources and contributes to continual improvement



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1.6.9 Areas for Continued Enhancement

1.6.9.1 In line with the declared intent for the minimisation of risk onboard the ARCTIC I and the integration of new equipment and systems to promote the units continued operation, the following area of improvement were undertaken during a planned shipyard period in the third quarter of 2007.

Work Schedule Brief Details

Commissioning of New Ballast Control system Replacement of old PIU system with PLC Based redundant control Ethernet based system

Removal of Halon system In compliance with IMO requirements current system was replaced with Novec 1230 fire extinguishing system

Aft Deck Crane change out Aft crane was removed and replaced with new 100 Tonne SWL unit

Installation of CCTV system New PLC based CCTV system was installed with enhanced monitoring capabilities

Installation of additional Quarters Installation of additional temporary living quarters module for clients personnel.

Installation of additional Helideck Foam Monitor Additional foam monitor to be installed enhancing ability for application of foam in event of Helideck incident

Upgrade of existing HP and Bulk Air compressors Installation of two larger capacity Air Compressors for Tensioner system

Installation of larger capacity Bulk air compressor

Installation of new GMDSS, AIS and SSAS systems New GMDSS installation with updated equipment

Installation of Automatic Identification system (AIS) sys

Installation of automatic Ship security Alert System (SSAS)

Surface BOP modifications/installation Modifications to Moonpool and Drill floor associated with installation of Surface BOP and associated control system



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1.7 REFERENCES

1.7.1 Documentation

HQS-CMS-GOV Iss 04 Jan 31st 2009 Transocean Company Management System

HQSHSEPP-01 Iss 03 August 2009 Health and Safety Policy and Procedures Manual

HQS-CMSPR02 Iss 03 Dec 31st 2008 Performance Monitoring Audit and Assessment Procedures

HQS-HSE-PR-01 Iss 01 Oct 31st 2007 Emergency Management Procedures Manual

HQS-HSE-PR-02 Iss 02 Oct 12th 2007 Medical Protocols Manual

HQS-HSE-PP-02 Iss 01 Sept 30th 2007 Environmental Management System

HQS-HRM-PP-01 Iss 02 Mar 1st 2009 Human Resources Policies and Procedures Manual

HQS-OPS-PR-01 Iss 02 Nov 1st 2007 Maintenance Manual

HQS-OPS-PP-01 Iss 01 Nov 1st 2004 Operations Policies and Procedures Manual

HQS-OPS-HB-03 Iss 02 Nov 11th 2004 Certificate and Survey Manual

HQS-OPS-HB 05 Iss 01 Nov 11th 2005 Field Operations Manual


Health, Safety and Environmental Management System.

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Blade Offshore Services 2009

PART 2




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TABLE OF CONTENTS SECTION PAGE

2. ARCTIC 1 HEALTH SAFETY & ENVIRONMENTAL MANAGEMENT SYSTEM ...................... 4

2.1 INTRODUCTION ................................................................................................................. 4 2.1.1 Purpose ................................................................................................................ 4 2.1.2 Document Update ................................................................................................ 4 2.1.3 Third Parties ......................................................................................................... 4 2.1.4 Abbreviations ....................................................................................................... 6

2.2 POLICIES AND OBJECTIVES ................................................................................................... 8 2.2.1 Policies and Principles ......................................................................................... 8 2.2.2 Quality Policy Statement ..................................................................................... 9 2.2.3 Health & Safety Policy Statement ..................................................................... 10 2.2.4 Environmental Policy Statement ....................................................................... 11 2.2.5 Objectives .......................................................................................................... 12 2.2.6 Corporate Goals and Objectives ........................................................................ 12 2.2.7 Corporate Department Goals and Objectives ................................................... 12 2.2.8 Unit Goals and Objectives .................................................................................. 12 2.2.9 Division & Installation Plans ............................................................................. 12

2.3 ORGANISATION RESPONSIBILITIES AND RESOURCES .................................................................. 14 2.3.1 The Organisation ................................................................................................ 14 2.3.2 HSE Responsibilities .......................................................................................... 16 2.3.3 Bridging Documents .......................................................................................... 16 2.3.4 Review ................................................................................................................ 17 2.3.5 Document Management ..................................................................................... 18 2.3.6 Workforce Participation ..................................................................................... 22 2.3.7 ARCTIC I Organization ....................................................................................... 23

2.4 RESPONSIBILITIES ............................................................................................................ 26 2.4.1 Senior Management ........................................................................................... 26 2.4.2 Line Management Responsibility ...................................................................... 28 2.4.3 Individual Responsibility ................................................................................... 28 2.4.4 Regulatory Requirements .................................................................................. 29

2.5 RESOURCES .................................................................................................................... 29 2.5.1 HSE Resources ................................................................................................... 29 2.5.2 HSE Committee Representation ........................................................................ 31 2.5.3 Support ............................................................................................................... 33 2.5.4 Clients................................................................................................................. 35 2.5.5 Clients Third Parties ........................................................................................... 36 2.5.6 Catering & Accommodation ............................................................................... 37 2.5.7 Medical Support ................................................................................................. 38

2.6 COMPETENCE .................................................................................................................. 40 2.6.1 Selection of Personnel ....................................................................................... 40 2.6.2 Selection and Control of Contractor Personnel ................................................. 41 2.6.3 Competence Assessment & Records ................................................................. 41 2.6.4 Training .............................................................................................................. 43 2.6.5 Induction Program ............................................................................................. 48

2.7 STANDARDS AND PROCEDURES ............................................................................................ 49 2.7.1 Planning and Risk Management ........................................................................ 49 2.7.2 Management of Change ..................................................................................... 52



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2.7.3 Emergency Response ......................................................................................... 55 2.7.4 Permit to Work System ...................................................................................... 56 2.7.5 Safe Working Practices ...................................................................................... 59

2.8 ENVIRONMENTAL STANDARDS AND PROCEDURES ....................................................................... 60 2.8.1 Environmental Management ............................................................................. 60 2.8.2 Environmental Protection .................................................................................. 64 2.8.3 Management of Wastes ..................................................................................... 65 2.8.4 Occupational Health .......................................................................................... 66

2.9 HSE STANDARDS AND PROCEDURES ...................................................................................... 67 2.9.1 HSE Procedures .................................................................................................. 67 2.9.2 HSE Communication .......................................................................................... 67 2.9.3 HSE Alerts ........................................................................................................... 69 2.9.4 Rig Security ........................................................................................................ 69

2.10 OPERATIONAL STANDARDS AND PROCEDURES .......................................................................... 70 2.10.1 Drilling and Well Control Operations ................................................................ 70 2.10.2 HSE, Client Management Interfaces ................................................................. 71 2.10.3 Simultaneous & Combined Operation Risk Assessments ................................. 71 2.10.4 Marine Operations & Site Assessment .............................................................. 72 2.10.5 Support Vessels .................................................................................................. 73 2.10.6 Engineering Management .................................................................................. 74 2.10.7 Lifting Operations & Material Handling ............................................................ 75 2.10.8 Personnel Tracking ............................................................................................ 76 2.10.9 Helicopter Operations ........................................................................................ 76 2.10.10 Hazardous and Radio-Active Substances ...................................................... 77 2.10.11 Procurement Management ............................................................................. 78 2.10.12 Maintenance Management ............................................................................. 79 2.10.13 Contractor Management ................................................................................. 81

2.11 ADVERSE WEATHER .......................................................................................................... 82 2.11.1 Adverse Weather ................................................................................................ 82 2.11.2 Responsibility ..................................................................................................... 83 2.11.3 Weather Forecasts ............................................................................................. 83 2.11.4 ARCTIC I Operational Limits ............................................................................. 83 2.11.5 Helicopter Operations ........................................................................................ 84 2.11.6 Over-the-side Work ........................................................................................... 85 2.11.7 Crane Operations ............................................................................................... 86 2.11.8 Launching of TEMPSC ........................................................................................ 86

2.12 PERFORMANCE MONITORING ............................................................................................... 88 2.12.1 Periodic Monitoring ............................................................................................ 88 2.12.2 Incident Reporting & Analysis ........................................................................... 89 2.12.3 Behaviour Based Observation Systems ............................................................. 90 2.12.4 Environmental Monitoring and Measurement .................................................. 91 2.12.5 Audit and Audit Compliance .............................................................................. 92 2.12.6 Verification of HSE Critical Tasks/Activities/Equipment/Systems .................. 93 2.12.7 Certification ....................................................................................................... 94

2.13 MANAGEMENT REVIEW AND IMPROVEMENT .............................................................................. 94 2.13.1 Review ................................................................................................................ 94

2.14 REFERENCES ............................................................................................................... 96 2.14.1 Documentation................................................................................................... 96



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2. ARCTIC 1 HEALTH SAFETY & ENVIRONMENTAL MANAGEMENT SYSTEM

2.1 Introduction

2.1.1 Purpose

2.1.1.1 Part 2 of the ARCTIC I HSE case will describe the Transocean Company Management system and present the management objectives that have been established to reduce the level of HSE risk to a suitable acceptable level.

2.1.1.2 The Company Management System provides managers and supervisors at all levels (corporate and installation) with expectations represented by principles, policies and procedures, which are intended to motivate people to execute work safely and effectively to achieve results. Managers and supervisors are responsible to ensure their people understand their responsibilities as described in the Company Management System.

2.1.1.3 The Company Management System establishes consistent standards across the companys worldwide operations and is the mechanism for promoting and sharing lessons learned and continuous improvement within the organization. The purpose of the Companys Management System is to provide the platform for people to create value and prevent loss, achieved by meeting expectations through applying appropriate controls (principles, policies and procedures) embodied within the management system.

2.1.1.4 The Company Management System communicates to employees the values and Company leadership expectations required to conduct business that lead to extraordinary service and performance excellence.

2.1.1.5 The implementation of the Companys principles, policies and procedures is essential to the Companys ability to manage operations safely, efficiently and effectively. It enables our people to:

Understand and meet Company expectations.

Achieve operational, safety and environmental goals.

Achieve performance excellence.

Provide value-added services and benefits to all stakeholders.

Meet or exceed customer requirements.

Meet regulatory requirements

2.1.1.6 Through the application of the company principles, policies and procedures onboard the ARCTIC I, risks will be reduced to an acceptable level, and effective HSE management will be proven.

2.1.2 Document Update

2.1.2.1 The text within this section of the case has been updated in the light of the change of ownership of the ARTCTIC I and the integration of the unit into the Transocean Management system. In some areas it is necessary to describe the original systems in place and where appropriate reference regarding sections of the Company Management system is reference in terms of the current system as applied.

2.1.3 Third Parties

2.1.3.1 The Company periodically engages third parties on its behalf to perform services in support of



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its global activities. Throughout the corporate management system such personnel as these agents or subcontractors are considered totally within the definition of the term All Personnel .

2.1.3.2 It is incumbent upon all personnel to comply with the written requirement of the Company management system and participate in the wide scope of activities to ensure to achieve corporate HSE success. The Management system identifies the required contribution required of all third parties to align with Managements aspirations for the safe operation of the ARCTIC 1. In a clear and concise manner.



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2.1.4 Abbreviations

2.1.4.1 As identified with the text. Abbreviation Definition ABS American Bureau of Shipping ALARP As Low as Reasonably Practical API American Petroleum Institute ASA Advanced Safety Auditing AVL Approved Vendors List CDP Company Designated Person (ISM Corporate Manager) CEO Chief Executive Officer CMS Company Management System DNV Det Norsk Veritas EAM (Area) Environmental Affairs Manager FAC First Aid Case FAT Fatality GMS Global Management System HLO Helicopter Landing Officer HP/HT High Pressure/High temperatureHSE Health Safety and Environmental IADC International Association of Drilling Contractors IATA International Air Transport Association Code IMDG International Maritime Dangerous Goods Code IMO International Maritime Organisation IMP Installed Medical Person ISM International Safety Management (System) ISO International Standards Organisation ISPS International Ship and Port Facility Security Code LQ Living Quarters MODU Mobile Offshore Drilling Unit MS Management System MSDS Material Safety Data Sheets MTC Medical Treatment Case OIM Offshore Installation Manager OJT On the Job Training PC Personal Computer PIC Person in Charge POB Personnel On Board PPE Personal Protective Equipment PTW Permit To Work QA Quality Assessment RMR Rig Modification Request RSA Rig Security Assessment RSTC Rig Safety Training Coordinator RWC Restricted Work Case SIC Serious Injury Case SIEP Shell International Exploration and Production (The Client) SOOB Summary of Operation Boundaries



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SRMR Subsequent Remedial Measures Report SSEs Short Service Employees RSTC Rig Safety Training Coordinator STEA Safety Training and Environmental Affairs (department) TEAM Total Environmental Awareness Management USA United States of America VP Vice President



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2.2 Policies and Objectives

2.2.1 Policies and Principles

2.2.1.1 The Company Management System manual uses principles, policies and procedures to describe the responsibilities and requirements on how Company leadership expectations are to be achieved. These expectations are documented and organized within the Company Management System manual so that:

Management expectations are communicated effectively through a standard and consistent approach

Individuals can understand their responsibilities and align their efforts to achieve desired results

2.2.1.2 Principles embody the core values and leadership expectations that lead and guide behaviour within the Company organization. Performance excellence requires individual and collective commitment to these principles.

2.2.1.3 Principles provide direction to people in their decision-making, behaviour and conduct. This ensures that people meet leadership expectations by acting within a given or defined process for which they are responsible and accountable

2.2.1.4 The corporate policies and procedures section includes high-level policies and procedures to support the Company Management System. These policies and procedures cover:

- System Management and Review Team (SMART) Process

- Management System Document Structure

- Document Control

- FOCUS Improvement Process

- Management of Change

- Performance Monitoring Audit & Assessment (PMAA)

- Service Quality Appraisals (SQA)

- Code of Business Conduct and Ethics

- Insider Trading and Confidential Information

- Contracts

- Records Management Program

2.2.1.5 The Corporate Quality, Health & Safety and Environmental Policy Statements represent the Companys commitment to provide clients, employees and suppliers with a safe environment and clear expectations and values that enable people to achieve desired business results.

2.2.1.6 The Companys Corporate Policy Statements, as outlined in the Company Management System, identifies fundamental expectations of how leadership requirements are to be met.



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2.2.2 Quality Policy Statement



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2.2.3 Health & Safety Policy Statement



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2.2.4 Environmental Policy Statement



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2.2.5 Objectives

2.2.5.1 Annual goals and objectives support the Companys strategic plans and enable the Company to execute its mission and achieve its vision. Corporate departmental goals and objectives are developed to support, and are aligned with, corporate goals and objectives. Unit goals and objectives are developed to support, and are aligned with, corporate departmental goals and objectives.

2.2.5.2 Goals are expectations against which results are measured. Goals should be developed to be measurable (quantitative) if possible. Objectives are performance measures that are used to determine the degree to which a goal has been achieved. Not all performance measures can be clearly quantified, due to the nature of a changing business environment. In exceptional cases they may be qualitative (subjective).

2.2.5.3 Goals and objectives are developed within 4 main areas of responsibility;

Corporate Goals and Objectives Corporate Department Goals and Objectives Unit Goals and Objectives Division & Installation Plans

2.2.6 Corporate Goals and Objectives

2.2.6.1 Executive Management sets corporate goals and objectives annually based on short and long-term strategies designed to achieve the mission and vision. These goals are related to key result areas established by Executive Management after reviewing the global environment and Unit-specific strategies. The goals and objectives are aligned with the annual budget and approved by the Board of Directors.

2.2.7 Corporate Department Goals and Objectives

2.2.7.1 Corporate departmental goals and objectives support Corporate goals and must be specific and measurable. These goals and objectives are interdependent with the Unit goals and objectives and represent aligned performance standards and measures.

2.2.7.2 Each Corporate department develops its own goals and objectives to enable it to contribute to achieving the corporate goals. In some cases, it may be necessary for a corporate department to translate or extrapolate a corporate goal in order to achieve some clear and measurable objective.

2.2.8 Unit Goals and Objectives

2.2.8.1 Unit goals and objectives support and will be aligned with corporate goals. In some cases, Units may develop Unit-specific goals to meet regional business conditions. Because of the diversity of the business environment, measurement and evaluation of the Key Step Measures (KSMs) is critical. (See Figure 2.3.1.)

2.2.9 Division & Installation Plans

2.2.9.1 Divisions and installations develop plans to achieve unit goals and objectives. In some cases, divisions may develop Division-specific goals to meet local business conditions. Division and Installations are instrumental in planning and achieving Unit goals and objectives.



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2.2.9.2 Development of Annual Corporate/Unit Goals and Objectives



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2.3 Organisation Responsibilities and Resources

2.3.1 The Organisation

2.3.1.1 Transocean Inc is the world's largest offshore drilling company, specializing in technically demanding segments of the offshore drilling business, including industry-leading positions in deepwater and harsh environment drilling services.

2.3.1.2 In order to manage a large fleet effectively and to achieve the Companys mission, Executive Management developed a management organization based on principles of leadership, essential management processes and personal accountability.

2.3.1.3 The Companys worldwide operations consist of international and deepwater drilling services.

2.3.1.4 The Company organization is depicted on the following organization chart, which shows the relationship between corporate and business unit offices.



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2.3.1.5 The organisation chart showing the



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2.3.2 HSE Responsibilities

2.3.2.1 HSE management is a line management responsibility. Visible management commitment and involvement at all levels is essential for successful HSE performance. As identified within section 2 of the corporate Health and Safety Policies and Procedures Manual [HQS-HSE-PP-01] All Company personnel at all levels of the organization have the responsibility to comply with policy and procedures and participate in the achievement of annual HSE goals. Participation fosters positive, proactive attitudes and behaviour to help meet HSE goals .

2.3.2.2 The Chief Executive Officer is ultimately responsible for the safe and efficient operation of the Company. The President and Chief Operating Officer is responsible for the day to day operations of the Company. The Vice President QHSE is responsible for the activities of QHSE Department to achieve global QHSE management objectives. The Director of QHSE is responsible for the overall planning, maintenance and implementation of the HSE Management System in order to achieve QHSE objectives

2.3.2.3 The Corporate Director QHSE, also nominated as the Designated Person in charge with regard to ISM issues, provides the link between personnel on the installation and the highest level of Corporate management. He is supported through the Division QHSE Manager who will maintain a direct link with the OIM of the ARCTIC I [Ref section 2 1.6 HQS-HSE-PP-01]

2.3.2.4 The responsibility for ensuring implementation of Health, Safety and Environmental policies within Brazil will lie with the Managing Director [Ref section 2 1.5 HQS-HSE-PP-01]

2.3.2.5 The OIM of the ARCTIC I is designated as the person responsible for the development of the HSE Plans to achieve the Company Safety Vision, and he is required to;

Monitor execution of installation HSE plans and provide a consistent approach to achieving the Company Safety Vision.

Lead by positive example. Implement HSE policies and procedures on their assigned installation Develop installation-specific procedures. Ensure installation class and statutory documentation is current. Assist with incident analysis as required. Authorize specific personnel for various circumstances (for example, responsible

person for work permits, authorization for specific equipment operation, and so on).

2.3.3 Bridging Documents

2.3.3.1 The Company recognise the need for co development with their global clients for documentation to cover the integration of the asset within the HSE system of their clients in such a manner as to maximise the benefit to both parties and minimise both the operational risk and administrative demands. The benefit of the consultative approach being the integration of both parties regimes of the HSE management together with the experienced personnel involved at the work site.

2.3.3.2 The Interface or Bridging document will ensure all aspects of contracts are planned, understood and communicated effectively, the client and the company. These plans are developed to address the following areas:



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Rig modification or upgrade projects (usually referred to as Project Management Plans.)

Mobile Unit/Drilling Services contracts (usually referred to as Operations Management Plans).

2.3.3.3 As an aid to such a Bridging document the ARCTIC I HSE Case provides a key component as the summary for the assessment and management of the operational risk associated with the completion of the operations within Brazil.

2.3.4 Review

2.3.4.1 The Company have extensive Performance Monitoring and Assessment Procedures document within Manual HQS-CMS-PR-02.

2.3.4.2 The Policy [Section 1 Para 1] documents the requirement that Management conducts audits and assessments to verify compliance and evaluate performance of people in achieving the expectations and requirements described in the Company Management System. The Frequency of audit is identified as a 30 month minimum period but may be conducted more frequently at the discretion of;

Executive Vice Presidents Asset and Performance for Corporate Level 1 and Business Unit Level 2 PMAAs

Business Unit Senior Vice President or Division/Sector Manager for Division/Sector Level 2 or Installation Level 3 PMAAs.

2.3.4.3 The definition of the hierarchical levels being;

Level 1 Corporate Level 2 Division/Sector Level 3 Installation (Installation-specific procedures)

2.3.4.4 The purpose of this policy is to:

Ensure managers and supervisors monitor, evaluate and take appropriate action to maintain or improve Company performance through an effective Performance Monitoring Audit and Assessment (PMAA).

Facilitate in the development of a performance culture. Ensure people have the understanding and ability to execute and deliver

required results. Ensure key Company risk-reducing controls that contribute to safe and reliable

performance have been implemented and are effective. Verify compliance with the Company Management System.

2.3.4.5 Level 1 Policy and Procedure PMAA criteria are determined by Corporate departments and are contained in the applicable section of the PMAA Criteria Standard, HQS-CMS-STD-01. Any additional Division-specific policies and procedures require the Business Unit and Division departments to develop the necessary audit key elements and criteria for Level 2. The development of Division policy and procedure key elements and the process for how they are audited must follow the PMAA Criteria Standard.

2.3.4.6 The Core PMAA Scope consists of assessing the eight management and three personal principles as well as auditing selected policies contained in Corporate Level 1 policy and procedure manuals



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2.3.4.7 Follow-up and Close-out is the final step in the PMAA process. Follow-up ensures the Locations performance is optimized by carrying out the Improvement and Corrective Actions to completion. Close-out is a management responsibility which is carried out after verifying follow up has been satisfactorily completed.

2.3.4.8 Within the PMAA process all levels of management are allocated responsibilities within the PMAA process from decisions with regard to audits frequency to recording the audit follow up and ensuring items are closed out. [HQS-CMS-PR-02. Sec 1 9]

2.3.5 Document Management

2.3.5.1 The Corporate Management System is shown in the figure below. This document management hierarchy describes the relationship between the Company Management System (GOV) manual and the corporate department management system and support documents.[HQS CMS GOV Sec 5 2]

2.3.5.2 Management system documents are organized in a hierarchy from Corporate to Installation. The organization provides a method for locating and retrieving documents in ways specific to how information is required to carry out work, either by function (discipline) or by category (type).



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2.3.5.3 The management system document structure is divided into three levels as follows:

Level 1 Corporate Governance. Level 1 documents define executive management expectations and requirements. Level 1 is subdivided into 2 levels:

Level 1A Corporate Department Policies and Procedures. Corporate department policies and procedures define explicitly the expectations and requirements for each core management function (discipline) within the organization.

Level 1B Corporate Department support documentation. These documents provide additional direction and/or guidance in achieving the requirements specified in the Level 1A manuals.

(Together, these Level 1 documents represent governance, i.e. expectations and requirements that apply worldwide)

Level 2 Unit Manuals are Unit-specific documents deemed by the Unit Senior Vice President necessary to address local specific business process requirements, local regulatory authorities and/or local client requirements not already covered in Corporate Levels 1A and 1B. They follow the Management System Document Classification System and must not conflict nor contradict Level 1A and 1B corporate requirements.

Level 3 Rig procedures are Rig-specific documents which describe the steps, activities, tasks, and work processes required to safely, responsibly, consistently and reliably execute work to meet Corporate, Unit, client, operational and regulatory requirements.

2.3.5.4 The responsibility for the issuing and control of documents is as follows;

CORPORATE DEPARTMENT VICE PRESIDENT Determines the need to develop any new documents to support

the corporate department management system. Reviews and approves changes to department management

system documents. UNIT SENIOR VICE PRESIDENT

Determines the need to develop any new documents to support the Unit management system.

Reviews and approves changes to Unit management system documents.

CORPORATE DEPARTMENT HEAD Ensures documents to support corporate department management

system manuals as specified by the Corporate Vice President are developed.

Notifies the corporate Quality department of any proposed and/or final changes to the corporate department management system documents.

Ensures department management system manuals are developed and controlled as prescribed in this policy

CORPORATE DIRECTOR, QHSE Ensures that Corporate and Unit management system documents

meet the defined document control requirements.



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DIVISION QHSE MANAGER Ensures that Unit documents meet the defined document control

requirements. RIG MANAGER

Approves Level 3 documents under their jurisdiction. Ensures their Level 3 documents meet the defined document

control requirements. OFFSHORE INSTALLATION MANAGER (OIM)

Submits Level 3 documents to Rig Manager for approval. Develops Level 3 documents according to defined document

control requirements

2.3.5.5 Change to the Company Management System is formally captured, reviewed, communicated and executed through the System Management and Review Team (SMART) process.

2.3.5.6 The SMART process [HQS CMS GOV Sec 5.1] enables people at different levels in the Company (corporate, unit, division and installation) to propose and implement change to the Company Management System categorized by the core management functions; shown below;

Health, Safety & Environment Engineering & Technical Services (Operations) Operations Performance (Operations) Supply Chain Management (Operations) Human Resources Finance Information Technology Legal Services Investor Relations & Communications Marketing & Planning

2.3.5.7 Corporate and Unit management use the SMART process to make changes to the Company Management System through their existing organizations and resources. SMART is also the means to communicate and implement change to the management system (represented in manuals and other documents) to corporate, unit and field personnel.

2.3.5.8 The SMART process is initiated by a SMART request. SMART requests require an action from the receiving organization. The action may involve review, feedback communication and/or execution of change to the management system. SMART requests are initiated at the Corporate or Unit level.

2.3.5.9 Unit SMART requests originate from the Unit and requires action (change or clarification request regarding the corporate/unit management system) from either unit or corporate.

2.3.5.10 Feedback is the means by which improvement to the Company Management System is captured. Feedback related to the Company Management System is SMART feedback. The most common source of SMART feedback is through corporate or Unit SMART Reviews. An alternate source of feedback may also be submitted through the FOCUS protocol.

2.3.5.11 The SMART Monitor is a log that formally captures SMART feedback requiring action. To ensure feedback is properly reviewed, approved and captured in the respective SMART Monitor, all feedback must be forwarded to the Division QHSE Manager. For feedback related to corporate Level 1 documents, the Division QHSE Manager forwards the approved feedback to the corporate Quality Manager.



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2.3.5.12 For feedback related to Level 2 (Unit) documents, the Division QHSE Manager facilitates review and actions taken by Unit Process Owners.

2.3.5.13 Corporate and Division SMART members are individuals who have the experience and responsibility to develop and maintain the Company management system manuals and support documentation. They also have the authority to make and/or approve changes to processes within their area of responsibility.

2.3.5.14 Their primary responsibility as SMART members is to ensure that management expectations as described in their management system documentation are clearly defined, understood and communicated. Their secondary responsibility is to respond and act on Corporate and Unit feedback.

2.3.5.15 Corporate SMART Members are chosen by their respective corporate department Vice Presidents (who also determines the number of members required). Corporate SMART members are usually the corporate department head. As often as possible, SMART members should be the defined Process Owner of a given departments management system.

2.3.5.16 Unit SMART members are chosen by the Unit Senior Vice President (who also determines how many members are needed). Unit SMART Members are usually Unit department heads. At his discretion, the Unit Senior Vice President may select additional members who directly report to the Division department heads and have a functional reporting relationship to corporate departments, e.g., Division Technical Field Support Manager and Division Materials Manager.

2.3.5.17 The Corporate QHSE Director and Corporate Vice President establish the Corporate SMART Contact List. The Corporate Quality Manager maintains the Corporate SMART Contact List. The Division QHSE Manager and the Division Senior Vice President establish the Unit SMART Contact List. The Division QHSE Manager maintains the Division SMART Contact List.

2.3.5.18 The Corporate Quality Manager uses the SMART contact list to select SMART Members to review changes to the management system based on the possible impact the change may have on the others management system. Corporate department process owners can use the SMART contact list in the same way

2.3.5.19 The corporate SMART process is initiated when change to the Company Management System, originating from corporate departments, requires Unit review, feedback, commissioning (where applicable) and implementation. (Minor revisions may be made without a Division SMART review).

2.3.5.20 The Division SMART feedback request is initiated when change/clarification to the Company Management System originating from the organization (which includes Division, Sector, Branch and/or Installation) requires corporate action.

2.3.5.21 In both Corporate and Division case the initiation of a SMART request will then follow the established protocol as shown below;

Step Corporate SMART Division SMART

1 Corporate SMART Review Corporate ensure ramifications understood

Division submits feedback to the appropriate Unit SMART Team member(s) for approval. (Refer to Unit SMART Contact List).

2 Division SMART review Changes communicated to Unit and within unit ensure changes understood at site

Division SMART feedback are logged and tracked in the Unit SMART Monitor by the Division QHSE Manager.

3 Commissioning - Executive management delegates responsibility to Division management for the commissioning of corporate documents. This is

Division SMART member(s) either reject or approve the submitted feedback for submission to corporate SMART.



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intended to ensure that responsible individuals (i.e., managers, supervisors and department heads) are aware of and understand key changes to the Company Management System.

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Implementation - If commissioning is necessary, it is followed by implementation. This involves applying the specified changes in the workplace to achieve compliance. Compliance is achieved either by immediately applying change or by applying an interim action until a permanent change can be applied

The Division QHSE Manager forwards the feedback to the corporate SMART member(s) who reviews the feedback and responds accordingly. The corporate SMART member decides if action is necessary and captures his decision and comments in the corporate SMART monitor. Any decisions that require action will follow the corporate SMART process.

Feedback is maintained throughout the process using the Corporate SMART Monitor.

2.3.6 Workforce Participation

2.3.6.1 The Company have an established philosophy for ensuring the involvement of the workforce at all levels of the Safety Management System. This includes the SMART system and FOCUS.

2.3.6.2 Installation communications involving the full range of the ARCTIC I personnel encompass formal shift handovers, correspondence, emails, daily meetings and reports that relate to the installations safety and performance. Rig management (Rig Manager and OIM) are responsible to participate in the process of information exchange and communication to ensure the safety and integrity of the operation and installation is achieved.

2.3.6.3 Supervisors are required to ensure effective communications are achieved in the following areas:

Conversations with people Conversations with people about safety Formal Shift Handovers Reports/ Logbook for all Supervisors Client Daily Communications Crew change Handovers Daily Standing Instructions to Drillers Daily Standing Instructions to Crane Operators QHSE Feedback Daily review of well performance Service Quality Appraisals PMAA close-out meetings HSE Alerts Equipment Alerts FOCUS Action Plans Incident reporting

2.3.6.4 Onboard the rig a wide range of HSE based meeting will for the core of communicating HSE matters. Company personnel, client personnel and all subcontractor personnel will attend and participate in relevant HSE meetings as determined by the OIM. These meetings will be in the format of;

Weekly Departmental HSE Meeting General HSE Meeting Pre Tour Meeting Pre Task



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Daily Operations QHSE Steering Committee

2.3.6.5 The scope of this policy is applicable to all personnel onboard the ARCTIC I.

2.3.6.6 In addition all employees will participate in the FOCUS observational safety system as a pro-active means of demonstrating their own commitment to occupational safety onboard the ARCTIC 1.

2.3.6.7 The FOCUS Improvement Process is the Companys approved method for developing and tracking corrective and improvement action plans, and capturing lessons learned to improve Company performance. The FOCUS Improvement Process provides a consistent means to improve Company performance through effective planning. FOCUS is used with Management of Change to develop plans, obtain approvals, and monitor and track the progress of plans to completion. It is incumbent upon all personnel to improve Company performance through the effective use of the FOCUS Improvement Process.

2.3.6.8 All personnel onboard the ARCTIC 1 also have a responsibility to participate in the START process. The START process must be actively led by all supervisors and supported by all Company personnel. All Company personnel are responsible for their own safety and behaviour. All Company personnel are obligated to interrupt any unsafe operation and correct any at-risk/unsafe behaviour or unsafe condition. [HQS-HSE-PP-01 Section 4 5.1].

2.3.6.9 The START process contains 5 specific elements to be undertaken by all personnel as a part of their proactive duties whilst undertaking any work onboard the ARCTIC I. These elements being;

SEE THINK ACT REINFORCE TRACK

2.3.6.10 A Proper implementation of the START process by all personnel provides an effective method of preventing injuries, safeguarding equipment and avoiding operational exposures by all personnel.

2.3.6.11 The completion of the Start record cards will be overseen by departmental supervisors. The OIM is required to ensure that an effective system is in place and that the system is fully operational from review through to communicating, and trending of the observations and tracking of the results and finally acting upon if deemed an action is required.

2.3.7 ARCTIC I Organization

2.3.7.1 An organisational chart of the ARCTIC 1 is shown below;



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ARCTIC I MANAGEMENTORGANISATION

2.3.7.2 As shown above the ARCTIC I management system organisation is led by the OIM, who supports the position of Barge Engineer onboard the unit. The OIM is supported by his management team consisting of;

Performance Toolpusher Maintenance Supervisor Toolpusher

2.3.7.3 The OIM is identified as having the following general role within his Rig Management remit. (Operations Job Description Manual)

The OIM has the overall charge and responsibility for the health, safety and welfare of all persons, and activities onboard the ARCTIC I and on any unit within the associated 500 meter zone.

As such, the OIM is fully authorized and obliged to take whatever actions are considered necessary to prevent injury, loss of life, damage to equipment/structure and/or loss of drilling integrity.

The O.I.M. manages the rig by establishing goals and objectives (consistent with the Company's stated mission) in pursuit of satisfying the requirements of both the client and shore based management.

Management of key areas either directly or indirectly through designated



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department head supervisors appointed.

Safety Environment Rig Management Operations Personnel and training Information Regulatory compliance Budget management

2.3.7.4 Within the HSE remit the OIM is identified to have the following responsibilities; (ISM302.00)

Develop installation HSE plans to achieve the Company Safety Vision. Monitor execution of installation HSE plans and provide a consistent approach

to achieving the Company Safety Vision. Lead by positive example. Implement HSE policies and procedures on their assigned installation. Develop installation-specific procedures. Ensure installation class and statutory documentation is current. Assist with incident analysis as required. Authorize specific personnel for various circumstances (for example, responsible

person for work permits, authorization for specific equipment operation, and so on).

2.3.7.5 In addition, the OIM has the authority to; (ISM 302.00)

The OIM/PIC has the authority to request assistance from shore-based management as necessary.

The OIM/PIC has the authority to issue instructions and orders to crewmembers.

The OIM/PIC has the authority to assign special duties to the crewmembers. 2.3.7.6 The Performance Toolpusher supervises the work activity of the entire drilling department personnel to include carrying out objectives established by onshore rig management and/or the Offshore Installation Manager (O.I.M). Essential functions include planning, scheduling, problem solving, conducting inspections and operational meetings, interacting with other rig department heads, and communicating directions to the Toolpusher. The ultimate objective of this position is to complete successful offshore oil and/or gas wells to the satisfaction of the Client, Company management and within compliance of applicable regulation

2.3.7.7 The Maintenance Supervisor is responsible for the management, the maintenance, repair and operation of all mechanical and electrical equipment on board the unit. He has to maintain documentation in compliance with regulatory and Company requirements. The Maintenance Supervisor is responsible for the preventative maintenance system on board. He advises the O.I.M. on all engineering, maintenance and repair matters.

2.3.7.8 The Night Toolpusher supervises the work activity of the on tour drilling department personnel to include carrying out objectives established by the Toolpusher and/or the Offshore Installation Manager. Essential functions include planning, scheduling, problem solving, conducting inspections and operational meetings, interacting with other rig department heads, and communicating directions to the Driller. The ultimate objective of this position is to complete



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successful offshore oil and/or gas wells to the satisfaction of the Client, Company management and within compliance of applicable regulations.

2.4 Responsibilities

2.4.1 Senior Management

2.4.1.1 At Corporate level, the Vice President QHSE has the following HSE responsibilities

Ensuring adequate resources are available to support Business Unit Senior Vice Presidents on HSE issues that are applicable worldwide.

Participate in the annual review of HSE performance to identify gaps and any needed modification of HSE plans to achieve the Company Safety Vision.

Review and give approval of Company QHSE policies applicable to worldwide operations.

Review and give approval of the Company Quality, Health and Safety, and Environmental Policy Statements applicable to worldwide operations.

Be responsible for the activities of QHSE Department to achieve global QHSE objectives

2.4.1.2 The Corporate Director QHSE (Designated Person ISM) has the following HSE responsibilities;

Provide a link between personnel on the installation and the highest level of Corporate management.

Review results for Corporate and Business Unit internal and external ISM audits of all applicable offices and installations.

Ensure all applicable ISM audit results, including the OIM/Masters review for ISM Code, are reported to the highest level of corporate management through the QHSE Steering Committees.

Serve as Designated Person (ISM Code). Serve as Company Security Officer (ISPS Code).

2.4.1.3 In the Brazil, the Managing Director has the following HSE responsibilities;

Be responsible for safe and efficient operation in their assigned area of operations.

Participate in the annual review of HSE performance to identify gaps and any needed modification of HSE plans to achieve the Company Safety Vision.

Ensure that adequate resources are dedicated to effectively support line management with regard to HSE issues within their Business Unit.

Assist with the analysis of incidents as required. Provide authorization to Business Unit, Division, Sector and Branch department

heads for development of respective manuals. [Ref HQS-CMSGOV Section 5, Subsection 2.]

Establish approval authority limits for policies, procedures and standards applicable only within their Business Unit. [Ref HQS-CMS-GOV Section 6.)

Assure implementation of Company HSE policies and procedures in their area of operations.

Support and monitor installation HSE plans to achieve the Company Safety Vision.

Recognize effective performance and execution of installation HSE plans.



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2.4.1.4 The Division QHSE Manager (Designated Person ISM) based in the Area office has the following responsibilities;

Providing a link between personnel on the installation and the highest level of Corporate management.

Serving as Designated Person (ISM Code) in their assigned area of operations. Serving as Company Security Officer (ISPS Code) in their assigned area of

operations. Ensuring an alternate Designated Person (ISM Code) is named and

communicated in their assigned area of operations.