Veritas Associates, Inc.

P.O. Box 7536
The Woodlands, TX 77387
281-362-0099 (Fax)

The following operations audit and rig inspection outline is furnished for information only. Our complete inspection procedures manual is more comprehensive and details a specific inspection procedure for each piece of equipment.

General Rig and Operations Audit Outline

This document is copyright 1999 and shall not be reproduced without the written permission of Veritas Associates



TABLE OF CONTENTS 1. Management Systems 2. Administration/Certification 3. Information Systems 4. Inventory Control Systems 5. Preventive Maintenance Systems 6. Manning Requirements 7. Drilling Systems 8. Engine Room/Power and Power Distribution 9. Engineering Systems 10. Safety Management Systems and Safety Equipment 11. Living Quarters/Accomodations 12. Deck Systems 13. Rig Evaluation 14. Rig Capabilities 15. Drawworks 16. BOP 17. BOP Control Systems 18. Mud Pumps 19. Choke and Kill System 20. Stand Pipe 21. Variable Deck Load and Stability Limitations 22. Rig Housekeeping 23. Third Party Installations OPERATIONS AUDIT INDEX 1.0 Management Systems 1.1 Quality assurance policy and system 1.2 Corporate objectives 1.3 Management responsibilities 1.4 Management systems 1.5 Planning and contract review 1.6 Document control 1.7 Purchasing 1.8 Purchaser supplied equipment 1.9 Identification and traceability 1.10 Process control 1.11 Inspection and testing 1.12 Repair and modification 1.13 Inspection, measuring and test equipment 1.14 Inspection and testing status 1.15 Non-conformance 1.16 Corrective action 1.17 Materials control, materials handling and storage 1.18 Records 1.19 Quality audits 1.20 Training 1.21 Statistical techniques 1.22 Safety management, audits, accident/incident reporting and investigation 1.23 Emergency response and crisis management 2.0 Administration and certification 2.1 Required certification 2.2 Operations manual 2.3 Records and logs 2.4 Drawing files 2.5 Rig files 2.6 Rig systems manuals and catalogs 2.7 Safety and training records 2.8 Safety procedures manual 2.9 Required licenses and certification 2.10 Contractual compliance (Rig specification, manning, tubulars and tools) 3.0 Information systems 3.1 Operational and technical 3.2 Policies and procedures manuals 3.3 Computerization 4.0 Inventory control 4.1 Policy and procedures manuals 4.2 Files and logs 4.3 Stores 4.4 Storeroom inspection 4.5 Vendor and repair facility selection 4.6 Identification and control of critical spares 4.7 Identification of operator equipment 5.0 Preventive maintenance system 5.1 Policy and procedures manual 5.2 Intrusive maintenance or reliability based 5.3 Off the shelf or custom 5.4 Records 6.0 Manning requirements 6.1 Flag required 6.2 Contractually required 7.0 Drilling systems 7.1 Circulating system Mud pumps Charge pumps Mixing and transfer pumps Mud Pits and agitators Solids control equipment Sack storage 7.2 Derrick and rig floor equipment Drawworks Top drive Rotary table Traveling block and hook Crown sheaves Braking systems Crown saver Driller's console and instrumentation SSTV Drawworks motors and ventillation Swivel Gooseneck .092 wireline unit Stabbing board Drill line and deadline anchor Sand line Iron roughneck and kelley spinner Rotary hose Kelley cocks Air hoists Monkey board air hoist Sub structure Rathole and mousehole Drive bushings IBOP Subs Slips, elevators, and safety clamps Elevator links Tongs Trip tank assembly Gas buster and venting Drill pipe Drill collars 7.3 BOP equipment Divertor Riser Accumulator BOP inspection Annular BOP inspection Control system and remote closing units Well control auxiliary equipment Control panels Choke and kill manifold Stand pipe manifold Manual choke Hydraulic choke Hydraulic power unit BOP transfer equipment 8.0 Power and power distribution 8.1 Main engines 8.2 Generators 8.3 SCR system or DC power conversion 8.4 Main switchboard and transformers 8.5 Emergency generator 8.6 Emergency switchboard 8.7 Motor control centers 8.8 Cold start system 8.9 Fuel transfer system 8.10 Emergency lighting system 8.11 Obstruction lights 8.12 Fixed fire system 8.13 Emergency shutdown system 8.14 Fuel oil shut downs 8.15 Daytanks 9.0 Engineering systems 9.1 Jacking system 9.2 Ballast system 9.3 Raw water system 9.4 Drill water system 9.5 Potable water system 9.6 Bilge alarm and discharge system 9.7 Sanitary/sewage treatment systems 9.8 Pollution control system 9.9 Fire main and deluge systems 9.10 Tanks and vents 9.11 Sounding system 9.12 Pre-load system 9.13 Jacking control system 9.14 Ballast control system 9.15 Low pressure air system 9.16 High pressure air system 9.17 Bulk air system 9.18 Mooring system 9.19 Welding and cutting equipment 9.20 Propulsion/thruster systems 9.21 Navigational equipment 10.0 Safety management and safety equipment 10.1 Personal protective equipment 10.2 Emergency response equipment (hoses, extinguishers, SCBA?s, etc.) 10.3 Emergency response teams and training 10.4 General alarm system 10.5 Communication systems (internal and external) 10.6 Mustering philosophy and areas (safe refuge) 10.7 Escape route marking 10.8 Life boats (TEMPSC) 10.9 Life rafts 10.10 Life jackets and work vests 10.11 Fire and gas detection systems 10.12 Helideck equipment, including fueling system 10.13 Foam system 10.14 Helicopter operation procedures 10.15 Operational safety equipment 10.16 Safety administration (meetings, toolbox talks, accident and incident investigating and reporting) 10.17 Color coding and flow markings 10.18 Washdown stations 10.19 General safety signs and notices 10.20 COSHH 11.0 Accommodation and offices 11.1 POB 11.2 Staterooms 11.3 Offices 11.4 Messroom 11.5 Galley 11.6 Dry storage 11.7 Coolers and freezers 11.8 Recreation facilities 12.0 Deck systems 12.1 Cranes 12.2 Towing equipment 12.3 Slings, shackles, etc. 12.4 Lifting gear inspection and certification 12.5 Mud logging 12.6 Wire line logging 12.7 Electrical cabling and wireways 13.0 Rig evaluation 13.1 Job requirement Hole sizes Casing sizes Expected mud weights TVD MD Frac gradient Casing weights in air and mud 13.2 Set back requirements Depth Hole size Mud weight Drill collars size and weight Drill pipe sizes and weights Total expected weights 13.3 Hydraulic requirements Depths Hole sizes Minimum AV Pressure requirements GPM requirements HHP requirements 14.0 Rig capabilities 14.1 Hook load limitations (12/14 lines) 14.2 Safety factors 14.3 Maximum hook load 14.4 Maximum wind load 14.5 Crown block 14.6 Maximum number of lines 14.7 Traveling blocl 14.8 Hook 14.9 Swivel 14.10 Drill line 14.11 Substructure 14.12 Rotary 14.13 Top drive 14.14 Cantalever limitations 15.0 Drawworks 15.1 Maximum single line pull 15.2 Power available 15.3 Auxiliary braking 16.0 BOP ratings 17.0 BOP control unit 18.0 Mud pump hydraulics 19.0 Choke and kill system limitations 20.0 Stand pipe limitations 21.0 Variable deck load and stability limitations 22.0 Rig housekeeping 23.0 Third party installations 23.1 Third party installation control 23.2 Cementing unit 23.3 Mud logging unit 23.4 Centrifuge 23.5 Wireline logging unit

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List of Services Performed and Furnished by Veritas Associates, Inc 1. Drilling Rig Inspection Services 2. Drilling Rig Audit Services and Safety Systems Audits and Inspection 3.   Jack-up, Land Rig, Semisubmersible, Platform, Drill Ship and General MODU Inspections and Audits 4. Legal Consulting and Expert Witness Services, Personal Injury, Contract Disputes, Arbitration Cases, Oilfield Oil and Gas Related 5. Project Engineering and Project Management for rig newbild, construction, repair and refit projects 6. Rig Acceptance Testing and Rig Commissioning 7. Accident and Incident Investigations, 8. Drilling Contractor Management Systems Audits 9. Tug Boat, Supply Vessel, Anchor Handling and Towing Vessel Inspections, Audits and On Hire Surveys 10. Environmental and Pollution Control Surveys and Audits