2012 Standards Conference SC18 Committee on Quality Standards Westminster, CO June 14, 2012 API Monogram Program Status Report W. Don Whittaker Manager Monogram Program/APIQR Aaron Duke Certification & Audit Program Development Monogram Program/APIQR

API Monogram/APIQR Program Status Report 1.Monogram Program Statistics 2.Audit Program 3.Monogram Standards Update 4.Fraud & Product Complaints 5.API Conference & Expo – Beijing

API Monogram/APIQR Certified Companies 5-12

3812 Active Certified Companies Licensed Companies Companies Certified with APIQR. 827 Companies With Both. 5-12

API Monogram Licensed Companies Top Countries 1.China – USA – India – S. Korea – Canada – 98 6.Italy – 92 7.UK – 71 8.UAE – 66 9.Indonesia – Japan – Germany – Mexico – Malaysia – Singapore – Brazil – Licensees. 77 Countries. 5-12

API Monogram Licenses Top Countries 1.China – USA – India – Italy – S. Korea – UAE –164 7.Canada – Indonesia – UK – Germany – Japan – Singapore – Mexico – France – Malaysia – Licenses. 5-12

Top Specifications 5-12

Top Licensed Products 5-12 API-6D Ball Valves 638 API-5L PSL 1 Line Pipe 552 API-5CT Threader 528 API-6D Gate Valves 486 API-6D Check Valves 483 API-7-1 Threading 475 API-6A Flanges 468 API-5L PSL 2 Line Pipe 452 API-6A Valves 429 API-6A Tees and Crosses 385

APIQR ISO 9001 Certified Companies Top Countries 1.China – USA – Canada – 57 4.India – 45 5.Indonesia – 34 6.S. Korea – 32 7.UAE – 25 8.Singapore – 24 9.Mexico – Russia – UK – S. Arabia – Venezuela – Egypt – Italy – Companies. 63 Countries. 5-12

APIQR API Spec Q1 Certified Companies Top Countries 1.China – USA – Canada – 51 4.India – 46 5.Indonesia – 33 6.S. Korea – 33 7.Singapore – 26 8.UAE – 25 9.Russia – Mexico – UK – Egypt – S. Arabia – Turkey – Italy – Companies. 64 Countries. 5-12

API Monogram Applications Top Countries 1.China – USA – 90 3.India – 48 4.Indonesia – 36 5.Italy – 30 6.S. Korea – 22 7.UAE – 19 8.UK – 19 9.Canada – Singapore – Germany – S. Arabia – Turkey – Mexico – Russia – Applications at 516 Companies. 5-12

APIQR ISO 9001 Applications Top Countries 1.China – 71 2.USA – 62 3.Canada – 17 4.Russia – 9 5.Malaysia – 7 6.Australia – 6 7.Singapore – 6 8.UK – 6 9.India – 5 10.Mexico – 5 11.Italy – 4 12.Romania – 3 13.S. Korea – 3 14.Spain – 3 15.UAE – Applications. 5-12

APIQR API Spec Q1 Applications 257 Applications. Top Countries 1.China – 73 2.USA – 62 3.Canada – 17 4.Russia – 10 5.Australia – 9 6.Singapore – 8 7.Malaysia – 7 8.UK – 6 9.India – 5 10.Mexico – 5 11.Italy – 4 12.UAE – 4 13.Romania – 3 14.S. Korea – 3 15.Spain –

Audit Nonconformities by Specification

Audit Nonconformities by Clause

2012 Standards Conference SC18 Committee on Quality Standards Westminster, CO June 14, 2012 Audit Program Status Report Aaron Duke Certification & Audit Program Development Monogram Program/APIQR

1045 Audits Performed Audits by Program:  Monogram Only – 433  Dual – 444  Registration – 144  Other – 24 Audits by Country:  China – 320 (30%)  USA – 228 (22%)  India – 54 (5%)  Canada – 44 (4%) 2012 To Date Total Certification Program Audits 5-12

API Monogram Audits by Type 5-12

Dual (API Monogram/APIQR) Audits by Type 5-12

APIQR Registration Audits by Type 5-12

2009 – 2012 Audits Performed Historical Comparisons 6-12

2012 Audits Due – Status 5-12

Audits Due 5/23/12

Active API Monogram/APIQR Auditors 143 Active Auditors 138 QMS-Monogram 20 Auditors in training 16 EMS-OHSAS 11TPCP 15 Perforator Witness 5/23/12

Auditors  Auditor Training Session – Singapore – February 2012  19 Auditor Observations Due in 2012  2012 Auditor Summit – Sanya, China – November 12-15, 2012  2013 Auditor Summit – Phoenix, Arizona – February 18-21, 2013  API Spec Q2 – training & resource planning  Continue to develop resources in key areas  Working to foster relationships with sub-contract providers  USA, Central Asia, Japan Audits  More audit questions and tools – all priority specs done end 2012  Develop better technical audit & training tools for auditors  New myCerts audit module implemented Q Audit Program 5/23/12

New / Revised Specifications API Spec Q1  Quality Programs for the Petroleum, Petrochemical and Natural Gas Industry, 9th Edition  Effective TBD API Spec 2C  Specification for Pedestal Mounted Cranes, 7 th Edition  Published March 2012-Effective September 2012 API Spec 5CT  Casing and Tubing, 9th Edition  Published July 2011-Effective Jan 2012

New / Revised Specifications API Spec 6AV1  Verification Test of Wellhead Surface Safety Valves and Underwater Safety Valves for Offshore Service, 2 nd Edition  Effective TBD API Spec 8C  Specification for Drilling and Production Hoisting Equipment (PSL 1 and PSL 2), 5 th Edition  Published April 2012-Effective October 2012 API Spec 11AX  Subsurface Sucker Rod Pumps & Fittings, 13 th Edition  Effective Fourth Quarter 2012/First Quarter 2013

New / Revised Specifications API Spec 11E  Pumping Units, 19 th Edition  Effective Fourth Quarter 2012/First Quarter 2013 API Spec 17E  Subsea Umbilicals, 5 th Edition  Effective TBD API Spec 20A  Carbon Steel, Alloy Steel, Stainless Steel and Nickel Base Alloy Castings for use in the Petroleum and Natural Gas Industry, 1 st Edition  Published March 2012

11IW Specification Withdrawn  Document will no longer be considered as active and maintained within the API Standards document list, but will remain as historical document  Ballot concluded May 3rd 2012  11IW licenses to be withdrawn on November 3rd, V1 – 19G1-G2 Transition  19G1 / 19G2 initial / transition audits still underway  4 facilities transitioned / 6 audited and under review / 6 facilities have not completed transition request  Transition period ends July 1, 2012 – 11V1 licenses to be withdrawn on July 1, 2012 Program Updates

myCerts 2 Q2 Application process /content changes Quality manuals Audit reports Composite list upgrade

Fraud and Complaints Overview

Number of Fraud Cases

Fraud Distribution

Actions Taken

2012 Recent Product Complaints  API Spec 6D Ball Valves with multiple leaks discovered after gas commissioning. Product inspection demonstrated that the Valves were not fitted with internal sealant injection fittings.  API Spec 5CT Pipe delivered with clear nonconformities identified in Mill Cert. Pipe tested and several defects found throughout pipe length (butt welds, jointers, cross welds, pipe length) When welding procedures were requested by client, they received no response. Periodic audits

Major Complaint  Tests performed to assess mechanical integrity yielded that in addition to poor finish, the impact strength of Pipe was far below requirements. Periodic Audit  API Spec 5L Pipe delivered with major signs of corrosion and rust which raised questions regarding quality of product. During the cleaning of corrosion, pieces of metal broke off from inner pipe surface. Corroded metal piece 

Major Complaint  API Spec 8A/8C/4F Facility with multiple complaints. One end user received 4F Mast which shipped with structural damage. Records were requested regarding structural and mechanical integrity of 4F Mast, API Licensee refused to release documentation.  One end user received 8A Bails that became bent in the field. Periodic audit Pad eye damage 

2012 Periodic Audit Outcomes  Two Facilities cancelled  Two 4F Facilities approached consultants affiliated with Monogram Program to provide designs and engineering for 4F products. Consultants alerted API that the facilities do not have capability nor equipment to test or assemble. One audit so far performed with early recommendation from auditor of immediate cancellation.  Potential client of 16A licensee performed an Audit as part of a purchase agreement, discovered evidence that licensee did not have minimum capability to Design, Weld, and Heat Treat 16A products. API notified, periodic audit yielded credible evidence to substantiate complaint. License now suspended.

Beijing Exposition and Conference Sept, 2013 Upstream Downstream Measurement Training – Q1 and Q2