By A.R. Johansen, A. Loppinet, P.T.N. Reeve, G.A.N. Thomas, G. Thorp, R. Vanzini, the Oil Industry International Exploration & Production Forum (E&P Forum). Copyright 1995, Offshore Technology Conference Inc. This work may not be printed or copied, digitally or physically, without the permission of the Offshore Technology Conference. OTC Proceeding's volumes, including the complete set of OTC Proceedings 1969-1996 on CD-ROM, are available from OTC. For more information call 1-972-952-9494. Executive SummaryA single global market for procurement is of crucial importance to the E&P industry. The resulting benefits, including cost reductions and shorter delivery times, could even be the key to the economic development of marginal fields. International Standards that cater for the needs of users, manufacturers and the public at large can provide a common basis for companies to procure and provide goods and services that will deliver the required performance throughout the field life. The savings to industry could be billions of dollars per year. The Oil Industry International Exploration and Production Forum (E&P Forum) and the American Petroleum Institute (API) acted as the catalyst for the re-formation of ISO TC67 ‘Materials, equipment and offshore structures for petroleum and natural gas industries’. The initial work was on the development of ‘fast track’ ISO standards based on the widely accepted and used API standards. In the five years of concerted effort by the E&P industry 17 fast track standards have been published and a further 10 ISO standards have reached or passed the balloting stage and are about to be published. This process has also resulted in the development of a management procedure for the selection, processing and maintenance of standards for the E&P industry. The E&P Forum, on behalf of the industry, has developed proposals to increase the efficiency of this managerial procedure and to speed up the "internationalisation" of selected standards. Details are given at the end of the paper. It is argued that the E&P industry should rally to the cause of international standardisation. Companies should lend their full support by committing their valuable expert resources. It is in the interests of the industry to do this for, without suitably skilled expert representation in ISO and the elimination of duplication as well as waste of resources through performing similar work at company or national level, the large potential benefits of international standardisation will elude the E&P industry. The overall thrust may be neatly summarised by the adage:
[ References ] IntroductionThe E&P Forum has taken a leading role in encouraging and facilitating the internationalisation of oil and gas industries standards in the area of upstream exploration and production. The need for standards became evident to the expanding industry in the early 1920s. In the United States, the manufacturing industry began supplying oil field equipment not only for local developments but across the continent. The requirement for equipment to be safe and compatible was essential for obvious reasons. The need to be fit for purpose followed swiftly as production facilities became more sophisticated and fields with higher and higher pressures were developed. The American Petroleum Institute was formed, and in 1923 adopted the remit to provide the industry with standards for manufacturers equipment for use throughout the USA. At the same time, oil field development was expanding rapidly in other parts of the world, driven largely by American based companies who, naturally enough, purchased equipment from home sources according to API standards. By the end of the 1930's the American manufacturers were dominant and American standards were being used worldwide, though in some cases with local modifications. This continued into the 1960s, by which time offshore production had moved from estuaries and swamps into near-shore operations. The continued search for crude spurred offshore development into hostile environments and deeper and deeper water. Also, land production was being expanded to meet the increasing demand for crude. Manufacturers began to produce significant quantities of oil field equipment in parts of the world other than America. Europe, Japan and later Korea became important manufacturing centres. [ Ref 2 ] API standards were used as a basis for this expansion, and they served the industry well. With the major part of the manufacturing demand still coming from the United States, API standards were largely geared to meet the US demand. International operators used API standards as the basis of their design specifications but added more and more supplementary requirements to their purchase specifications to meet local environmental needs and increasingly stringent requirements. Whilst many of these individual supplementary requirements were more or less common to all purchasers, each specification was unique and this added cost to the orders. By the early 1980s Governments, aware of safety and environmental pressures, were demanding improved design and quality assurance. Engineers were ready to meet the challenges and they designed sophisticated and unique equipment to meet them. Meanwhile many field developments had been undertaken in the harsh environment of the North Sea, and by the mid 1980s some had reached maturity. Subsea development and floating production systems were now being introduced to meet the challenges presented by operations in very deep water and by recovery from small reservoirs. These developments were largely beyond the scope of API standards and were heavily influenced by the requirements of the host governments. There was little feedback into API standards, which accordingly remained largely attuned to US conditions. The Internationalisation of API StandardsDuring the mid eighties, the international oil companies realised that a significant amount of common effort was being wasted by individual companies developing supplementary requirements which were in close conformity with those of other operators. Under the influence of the E&P Forum’s Standards Subcommittee, the first moves were made towards developing standards more suitable for the changing needs of the international industry. API and the E&P Forum supported by parts of the industry in Europe began (in API Committees -2, -5, -8, and -17) to add elements that would facilitate the use of API standards internationally. Apart from some resistance from US manufacturers, this work was progressing well until the introduction of the Single European Act in 1985 changed the situation. European Community legislation appeared, with requirements to have European Standards compiled by the European Standards body (CEN). At about the same time, the ISO Central Secretariat in Geneva took an initiative to restart standardisation for the oil and gas industry. Later the European Commission mandated CEN to develop a programme of European standards for the upstream oil industry, and have them in place as soon as feasible [ Ref.1 ]. This action posed a serious concern that a further set of industry standards might be developed. To mitigate this the industry, through the E&P Forum and keeping API fully informed, explored the reactivation of the International Standards Organisation’s Technical Committee 67 (ISO/TC 67) (oil field materials and equipment) on the assumption that good international standards would be accepted by CEN as European standards. This activity focused the view that there was a real need for a set of standards which could fulfil the industry’s needs internationally [ Ref. 2 ]. API’s E&P Committee also saw the need and offered API’s full support. So, in July 1989, through the reactivated ISO/TC 67, the international oil industry embarked upon the development of a selected set of international standards for the use of the industry, initially based on API standards, but to become stand-alone standards supported by the industry and in some cases replacing API standards. By cooperation with CEN, the hope was to develop standards that could also serve the needs of the European Commission. Industry and the International Standard ProcessThe ISO process has been well covered by the paper given at the Offshore Technology Conference of 1994, titled ‘International Standards for the Oil and Gas Industries, A Review Paper’ by P.T.N.Reeve, A.R.Johansen, and J.Lautier [ Ref. 3 ] This paper outlined the complexities of the work within ISO and its individual committees, its formal structure, and the relationship with constituent members, the National Standards Associations. Briefly the areas of responsibility of the many standards bodies are:
[ Ref 3 ] API put forward a selected number of industry standards for approval by ANSI, which then became National Standards rather than de facto industry standards. API’s E&P Department fully supports the internationalisation of selected API standards, and through ANSI’s position as secretariat of ISO/TC 67 is committed to continue with the maintenance of these standards within ISO. The API’s adage of :
is very appropriate. The Industry Working in ISOThe activity range of the ISO is awesome. At the end of 1993 there were 182 Technical Committees (TC) reporting to the Technical Management Board. Under the TCs there were some 630 Subcommittees and 1918 Work Groups There were 76 member international standard associations each with the right to sit on the committees and partake in the development of standards. Each member in a committee has the option of being a Participating (P) member or an Observer (O) member. P-members are expected to participate actively and are obliged to vote on draft standards; Observer members are circulated draft standards and have a reduced voting configuration. Business is carried out in French and English and in Russian where necessary, with interpretation provided at many meetings. There is also a rigid procedure for calling meetings, as explained in the ISO Directives. With such complexities, it may be surprising that progress is obtainable. However, by the end of 1993 ISO had published 9178 standards and had some 4000 further standards on the current work programme. CEN is set up along a similar pattern to ISO and is of slightly less awesome proportions, but with a larger current work programme driven by the Single European Act. In 1991, ISO and CEN concluded the ‘Vienna Agreement’ that provides for technical cooperation, and the transfer of work from CEN to ISO with parallel voting in both organisations. The oil and gas industry’s work on standards for the exploration and production industry is undertaken through ISO TC 67-Materials, Equipment and Offshore Structures for the Petroleum and Natural Gas Industries. This TC currently has seven Subcommittees and 42 Work Groups. As of February 1995 TC 67 has published 17 ‘fast track’ standards, fundamentally API standards modified to ISO editorial requirements. An increasing number of standards primarily based on API are in the process of adaptation for international use prior to approval and publication. The current work programme amounts to some 100 work items. The oil and gas industry with its supporting suppliers and manufacturers is contributing significant manpower to this effort. As an example of this, ISO/TC 67 Subcommittee 7 (Offshore Structures) typically meets twice a year with an attendance of about 25 national experts representing the national standards associations. About ten of these are oil company staff. The primary function of the Subcommittee is planning, goal setting, stewardship of the work programme, and administration. The SC7 has 5 Work Groups which often meet contiguously with SC-7 to save expense, and attendance is typically 10–25 people. Most of the technical work is endorsed at these meetings which generally last no more than four days. Intermediate meetings are arranged to coincide with other technical conferences, such as this current OTC conference. Between meetings, work continues via fax, e-mail and exchange of floppy disks. The commitment to SC7 by the industry alone amounts to an estimated $ 1 million/year in time and travel expenses, for the delivery of a six-part ISO Standard on Offshore Structures by 1999. The first two parts, General Requirements and Fixed Structures, have passed the voting stage. Controlling the cost of developmentAll operators, national and international, have experienced the increasing costs of development and operation over the last decade, coupled with continuingly depressed prices. As a result, there has been a strong drive to reduce costs. Two major initiatives have been undertaken in Europe by the industry, namely CRINE and NORSOK. These two projects have a similar aim, on a broad basis to reduce the cost of field developments. CRINE (Cost Reduction Initiative for the New Era) is a UK-based project funded by industry partners and led by The United Kingdom Offshore Operators Association. Several cost reduction initiatives have been identified and developed. The one relevant to this paper is the development of 25 common industry functional specifications for a short list of commonly used equipment packages. It was recognised that variety in specifications wasted design time and added costs. The specifications are based on industry standards and provide as much scope as possible for the use of vendor's standard products. The timing is to complete the task of 25 specifications in 1995. Work is well on the way to meet this stiff target, with six documents being issued in 1994. CRINE supports the work to improve and internationalise the industry standards in the ISO. [ Ref 4 ] NORSOK was initiated by Norwegian operators at approximately the same time and with the same objective, to reduce the cost of field developments. Like CRINE, one of the areas identified for cost reduction was in the use of common specifications. In the NORSOK initiative efforts were directed to harmonising and replacement of the company standards of the major Norwegian operators and on gaining industry acceptance for use of the new NORSOK standards on the Norwegian continental shelf. At end 1994, some 88 NORSOK Standards had been developed to replace relevant company in-house specifications. Parts of the NORSOK standards are relevant for assimilation into the ISO suite at an appropriate time. Both projects recognized that variety in standards was not cost efficient and not always necessary. Members of the E&P Forum’s Standards Subcommittee are involved with both projects and helped to influence the work to align with the ISO standardisation efforts. Both groups recognised that to improve efficiency, operators and manufacturers had to work together towards an agreed goal. The results of these efforts are encouraging and represent no less than a cultural change in current attitudes. The way ahead — the E&P Forum’s positionThe E&P Forum, through its Standards Subcommittee, takes the view that the international oil and gas industry should:
If these goals are to be achieved, a changed attitude to standards within the industry will be needed. In particular:
A fuller description of the E&P Forum’s position is given in ref 4. AcknowledgementThe authors acknowledge the resources provided by their organisations to prepare this paper and their permission to publish under the name of the E&P Forum. The authors also acknowledge the time and expertise given by the many participants in the international standardisation process to further the cause of internationalising standards. References
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