Presented by on behalf of API by TIEC, Inc. A Review of API and the Monogram Program

Presented by on behalf of API by TIEC, Inc. API Monogram Program l Established by API’s Board of Directors on October 24, l Originally created “To facilitate the availability of safe, interchangeable, off-the-shelf equipment and materials for general use in the petroleum drilling and production industry”. l Identifies companies capable of manufacturing oilfield equipment, materials and services in accordance with API quality and product standards. l Established by API’s Board of Directors on October 24, l Originally created “To facilitate the availability of safe, interchangeable, off-the-shelf equipment and materials for general use in the petroleum drilling and production industry”. l Identifies companies capable of manufacturing oilfield equipment, materials and services in accordance with API quality and product standards.

Presented by on behalf of API by TIEC, Inc. API Monogram Program l Currently covers over 70 API Exploration & Production standards. l Recently expanding into the Downstream standards for refinery valves and refinery electric motors. l Designed to address the business need of equipment interchangeability, reliability and traceability l As needs have changed, program has changed –From “self-certification” to “on-site verification”. l Application of the API Monogram establishes a warranty between the equipment manufacturer, the equipment purchaser and API. l Currently covers over 70 API Exploration & Production standards. l Recently expanding into the Downstream standards for refinery valves and refinery electric motors. l Designed to address the business need of equipment interchangeability, reliability and traceability l As needs have changed, program has changed –From “self-certification” to “on-site verification”. l Application of the API Monogram establishes a warranty between the equipment manufacturer, the equipment purchaser and API.

Presented by on behalf of API by TIEC, Inc. API Monogram Program l Product standards describe the equipment manufacturing requirements. l API Spec Q1 describes the quality system requirements. l Product standards describe the equipment manufacturing requirements. l API Spec Q1 describes the quality system requirements. l License Agreement defines the relationship and responsibilities between API and the licensed manufacturer (licensee) l Oil companies order API- Monogrammed equipment l Oil companies report product non-conformances to API

Presented by on behalf of API by TIEC, Inc. API Monogram Program l Approved Functioning Quality System –Must meet API Spec Q1 l Three-Year Term with Interim Audits –Initial Audit –Unscheduled Periodic Audit –Renewal Audit l Approved licensees signify quality and conforming product with the Monogram l Approved Functioning Quality System –Must meet API Spec Q1 l Three-Year Term with Interim Audits –Initial Audit –Unscheduled Periodic Audit –Renewal Audit l Approved licensees signify quality and conforming product with the Monogram

Presented by on behalf of API by TIEC, Inc. API Spec Q1, 8th Edition l Contains all of ISO 9001 requirements l Contains additional elements of particular industry concern –Part 1 - quality requirements –Appendix A - Monogram Program Requirements l Expands the scope of the quality system to all equipment, materials and services l Retains core elements of the 7th Edition l Released December 15, 2008 following the release of ISO TS l Contains all of ISO 9001 requirements l Contains additional elements of particular industry concern –Part 1 - quality requirements –Appendix A - Monogram Program Requirements l Expands the scope of the quality system to all equipment, materials and services l Retains core elements of the 7th Edition l Released December 15, 2008 following the release of ISO TS-29001

Presented by on behalf of API by TIEC, Inc. API Spec Q1 l API Spec Q1 mirrors the ISO 9001 format.... but is more similar to AS 9000 and QS 9000 because it contains industry specific quality system requirements l An API Spec Q1 audit goes above and beyond an ISO 9000 audit: –Links quality system with product or service standards - this is what adds value and differentiates the program l API Spec Q1 mirrors the ISO 9001 format.... but is more similar to AS 9000 and QS 9000 because it contains industry specific quality system requirements l An API Spec Q1 audit goes above and beyond an ISO 9000 audit: –Links quality system with product or service standards - this is what adds value and differentiates the program

Presented by on behalf of API by TIEC, Inc. The Licensing Process Manual ReviewAuditor SelectionOn-Site AuditPanel Review Oil Company Purchases API-Monogrammed Equipment Q License Issued

Presented by on behalf of API by TIEC, Inc. l Directory of approved companies distributed quarterly –2000 purchasers –worldwide distribution –available on the Web at l Current program has: –Over 2300 Licensees, and over 3850 Licenses –over 60 Countries, with over 65% of Licensees Outside US l Directory of approved companies distributed quarterly –2000 purchasers –worldwide distribution –available on the Web at l Current program has: –Over 2300 Licensees, and over 3850 Licenses –over 60 Countries, with over 65% of Licensees Outside US API Monogram Program

Presented by on behalf of API by TIEC, Inc. API Monogram Program Total Licensees & Licenses (Jan. 14,2008) TOTALS  2301 Licensees  3842 Licenses  68 Countries 31% 20% 6% 4% 3% 3%3%2%

Presented by on behalf of API by TIEC, Inc. Industry Involvement l Monogram Program is industry-specific l Monogram Program is industry-regulated l Serves the Needs of the Oil Companies l Monogram Program is industry-specific l Monogram Program is industry-regulated l Serves the Needs of the Oil Companies

Presented by on behalf of API by TIEC, Inc. American Petroleum Institute Quality Registrar (APIQR)

Presented by on behalf of API by TIEC, Inc. APIQR Services l Provides RAB-accredited ISO 9001 and ISO registrations to the petroleum industry: –Specializing in: petroleum industry equipment manufacturers petroleum product testing laboratories l Performs ISO 9001 registration, ISO registrations and API Monogram licensing audits l “Dual Registrations” l Provides RAB-accredited ISO 9001 and ISO registrations to the petroleum industry: –Specializing in: petroleum industry equipment manufacturers petroleum product testing laboratories l Performs ISO 9001 registration, ISO registrations and API Monogram licensing audits l “Dual Registrations”

Presented by on behalf of API by TIEC, Inc. APIQR Services l “ DUAL REGISTRATIONS ” –1 AUDIT...2 RESULTS –API Monogram License and ISO 9001 registration with one combined audit l Saves time, money and increases efficiencies l “ DUAL REGISTRATIONS ” –1 AUDIT...2 RESULTS –API Monogram License and ISO 9001 registration with one combined audit l Saves time, money and increases efficiencies Q ISO 9001 API Monogram License

Presented by on behalf of API by TIEC, Inc. Comparison l ISO 9001 Program –International quality management system –Registration of system NOT product –Generic to fit all Industries and Services l ISO 9001 Program –International quality management system –Registration of system NOT product –Generic to fit all Industries and Services l Monogram Program –Includes quality system registration with over 65% international clientele –API Spec Q1 links to API product standards –Designed to meet petroleum industry needs –Written and guided by oil industry committees

Presented by on behalf of API by TIEC, Inc. Other Quality Programs l API’s other Quality Programs include: –Engine Oil Licensing and Certification System (EOLCS) –Inspector Certification Programs l API is expanding its services to increase value for the petroleum industry: –Tank Seals and Fittings Certification Program –Downstream Standards Monogram Program –ISO Registration through APIQR –Individual Personnel Certification l API’s other Quality Programs include: –Engine Oil Licensing and Certification System (EOLCS) –Inspector Certification Programs l API is expanding its services to increase value for the petroleum industry: –Tank Seals and Fittings Certification Program –Downstream Standards Monogram Program –ISO Registration through APIQR –Individual Personnel Certification