STASCO - STS/4 (Global Trading Assurance) February 2014 1

Ship Quality Assurance

Ship Assessment For Employment

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Agenda

• Safety briefing/introduction

• Why do we need Ship Quality Assurance?

• Who are we?

• Industry stand

• Quality Assurance Process

• What else does the team do?:

• Benchmarking

• Management reviews

• Structural assessments

• Incident investigations

• Inspections

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Our Values

Sustainable Development

Responsibilities

Principle 1 - Economic

Principle 2 - Competition

Principle 3 - Business Integrity

Principle 4 - Political Activities

Principle 5 - HSSE

Principle 6 - Local Communities

Principle 7 - Communication & Engagement

Principle 8 - Compliance

Shell General Business Principles

Introduction

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Why do we need Ship Quality Assurance?Erika – 12th Dec 1999

Prestige – 13th November 2002

Elli - 28th Aug 2009

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Why do we need Ship Quality Assurance?

Doola No.3 - 15th Jan 2012

STOLT VALOR” – March 2012

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Why do we need Ship Quality Assurance?Media coverage – February 2000

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SQA Team Functional Organisation March 2014

February 2014STASCO – STS/4 (Global Trading

Assurance)

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• Shell Vetting is an expertise based system

• Vetting decisions are made only by marine professionals

Who are we?

SAFETEAM Contact Details:

• Email: safeteam@shell.com

Primary contact for all vetting issues. This email is a common address and monitored by all offices.

• Telephone: +44 (0) 207 546 7600

London Safe team – office hours only, but rolled to a duty telephone out of hours for emergencies only.

• Singapore Telephone: +65 6384 8984

• Urgent Out of Hours Tel: +44 (0) 207 546 7600

London Safe team or duty member of the London team.

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Business and Regulatory Environment

Quality Pull

EUFlag StateInspection

Port StateControlClassification

Societies

OCIMFSIRE

ChartererVetting

USAOPA 90

UNIMO

• Ship owner responsible for safe management, manning and maintenance• Classification societies set standards of construction and assess

condition• Flag states regulate the standards of ships under their registry• Port state control administrations inspect vessels and may detain them

But some sub-standard tankers still escape the net

The majority of the world tanker fleet is safely operated. But a significant minority is not.

Industry Stand

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• All oil majors have their own quality assuranceschemes

• Schemes vary due to company size, scope &diversity of activities, attitude to marine risk, use ofreal time information and the level of marineexpertise employed

• All companies input/extract factual ship inspectionreports (SIRE) from Oil Companies InternationalMaritime Forum (OCIMF) database

• Vessel acceptability solely at each company’sdiscretion

• Liability concerns dictate individual companyapproach

Industry Stand

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Ship Quality Assurance is “Mandatory”

Quality Assurance Process

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Objective: to avoid Shell using or being associated with a substandard ship, thus minimising risk of

– Harm to people or the environment– Damage to Shell’s reputation– Financial claims

whilst facilitating business in accordance with Shell General Business Principles

Quality Assurance Process

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The Vetting Process

Risk Assessment Tools available for Vetting Decisions

ManagerAssessment

SIRE Inspections / Right Ship database

for Bulk carriers

Operational Performance

Casualty Record

Terminal Feedback Flag History

Class History

Port State Inspections

Change in Status

Owner Fleet Profile Industry

Information

SIRE/CDIHistory

Structural Analysis/ CAP

ShipProposed

ShipAcceptance

Y/N

Quality Assurance Process

LOA

Summer draught

Load Port

Discharge PortCargo

STASCO – STS/4 (Global Trading Assurance) February 2014

Quality Assurance Process

• Scoring of SIRE Reports

Based on risk score when allocating a risk rating for each observation raised during the inspection

• Crew Matrix Compliance

Based on matrix requirements.

Includes:

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STASCO – STS/4 (Global Trading Assurance) February 2014

Quality Assurance Process

All Risks quantified….

Actual “Observation”, and “Final” risk assessed by Team for each observation….

SIRE Questions Risk assessed to Standard for Ship Quality Assurance...

SIRE Report Risk RankingOBJECTIVEMinimising the risk of:•harm to people or the environment•Damage to Shell’s reputation•Financial claims on Shell

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Quality Assurance Process

SHELL TIME CHARTER SHIP’S - CREW MATRIX REQUIREMENTMaster/Chief Off. (combined)

2nd /3rd Off. (combined)

Years with Operator >2 Calendar Years >1 Calendar YearYears in Rank >3 Time served on board >1 Time served on boardYears on this type of tanker

>6 Time served on board N/A

Years on all types of tanker

N/A >1.5 Time served on boardChief Eng/2nd Eng

(combined)Jnr. Engs. (combined)

Years with Operator >2 Calendar Years >1 Calendar YearYears in Rank >3 Time served on board >1 Time served on boardYears on this type of tanker

>6 Time served on board N/A

Years on all types of tanker

N/A >1.5 Time served on board

Crew Matrix

February 2014

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• E - Eligible – for further consideration, subject to positive vetting process

• PP - Probation Period - Can be a new vessel or a vessel under changed management or if the vessel is RI and only Sire or CDI available is idle

• RI - Requires Inspection - not inspected within the last 12 months and for vessels greater than 15 yrs old within last 6 months

• U -Unsuitable - Cannot be used for any Shell business or visit any Shell Terminal – requires Shell discharge SIRE for consideration of Upgrade to E rating

• Caution -Vessel where particular care is needed due to the Manager, Structural issues or where specific information has been received highlighting a need for caution

Safe Ratings

Quality Assurance Process

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Group owned/Demise Charter

Time Charter

Consecutive Voyage Charter

Contract of AffreightmentSingle Voyage Charter

CIF PurchaseFOB Purchase

Selling DeliveredFOB Sale

CIF Sale – Not chartering

Buying Delivered – Not Chartering

Terminal Acceptance

Chain Deals

HIGH RISK

LOW RISK

Quality Assurance Process

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Ship Quality Assurance Activity

Quality Assurance Process

2005 2007 2008 2009 2010 2011 2012 2013

Screenings 30955 36556 37904 36731 40352 38934 38760 38844

Sire/CDI reports rated

4100 5354 5451 12384 16921 23235 21314 21459

Inspections 4050 4709 4714 4975 4808 4228 4063 3666

Structural Reviews

591 527 552 563 437 569 502 410

Management Reviews

99 120 129 95 100 97 87 82

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The team also do:

• Benchmarking

• Time charter assurance

• Management reviews

• Structural assessments

• Incident investigations

• Inspections

• Newsletters – internal & contracted inspectors

• Support Vessel & Personnel Transport craft assurance

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Despite Industry’s Best Endeavours

KOREA February 2014

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Q & A

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