Hydrocarbon Management HM 60. Guidelines for the auditing of measurement systems for the UK upstream oil and gas industry

Transcription

1 Hydrocarbon Management HM 60 Guidelines for the auditing of measurement systems for the UK upstream oil and gas industry

2 HYDROCARBON MANAGEMENT HM 60 GUIDELINES FOR THE AUDITING OF MEASUREMENT SYSTEMS FOR THE UK UPSTREAM OIL AND GAS INDUSTRY

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4 HYDROCARBON MANAGEMENT HM 60 GUIDELINES FOR THE AUDITING OF MEASUREMENT SYSTEMS FOR THE UK UPSTREAM OIL AND GAS INDUSTRY November 2007 Published by ENERGY INSTITUTE, LONDON The Energy Institute is a professional membership body incorporated by Royal Charter 2003 Registered charity number

5 The Energy Institute gratefully acknowledges the financial contributions towards the scientific and technical programme from the following companies: BG Group BHP Billiton Limited BP Exploration Operating Co Ltd BP Oil UK Ltd Chevron ConocoPhillips Ltd ENI ExxonMobil International Ltd Kuwait Petroleum International Ltd Maersk Oil North Sea UK Limited Murco Petroleum Ltd Nexen Saudi Aramco Shell UK Oil Products Limited Shell U.K. Exploration and Production Ltd Statoil (U.K.) Limited Talisman Energy (UK) Ltd Total E&P UK plc Total UK Limited Copyright 2007 by the Energy Institute, London: The Energy Institute is a professional membership body incorporated by Royal Charter Registered charity number , England All rights reserved No part of this book may be reproduced by any means, or transmitted or translated into a machine language without the written permission of the publisher. The information contained in this publication is provided as guidance only and while every reasonable care has been taken to ensure the accuracy of its contents, the Energy Institute cannot accept any responsibility for any action taken, or not taken, on the basis of this information. The Energy Institute shall not be liable to any person for any loss or damage which may arise from the use of any of the information contained in any of its publications. The above disclaimer is not intended to restrict or exclude liability for death or personal injury caused by own negligence. ISBN Published by the Energy Institute Further copies can be obtained from Portland Customer Services, Commerce Way, Whitehall Industrial Estate, Colchester CO2 8HP, UK. Tel: +44 (0) sales@portland-services.com Electronic access to EI and IP publications is available via our website, Documents can be purchased online as downloadable pdfs or on an annual subscription for single users and companies. For more information, contact the EI Publications Team. e: pubs@energyinst.org.uk

6 CONTENTS Foreword... vii Page Acknowledgements... viii Introduction and scope Auditing requirements Auditing requirements - An overview Legal and statutory issues and UK fiscal regime Areas of audit The audit The audit body The auditor Types of measurement audits Ranking of audits The audit process Audit purpose Audit planning Audit criteria Auditor responsibilities Conducting the audit The audit team The 'kick-off' meeting The opening meeting Conducting the audit The closing meeting Non-conformity Reports/Corrective Action Requests Recommendations for corrective action The audit trail Audit reporting and follow-up The Audit Report Audit frequency Audit follow-up Annex A Glossary of terms Annex B Audit process map v

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8 FOREWORD The EI Hydrocarbon Management Committee is responsible for the production and maintenance of Standards and Guidelines covering various aspects of static and dynamic measurement of petroleum and hydrocarbon gases. The Upstream Hydrocarbon Management Committee (HMC 7) deals with measurement applicable to the upstream sector of the industry which includes measurement for fiscal reporting, product allocation and streams associated with emissions trading. This document has been instigated and managed by the Energy Institute s Upstream Hydrocarbon Management Committee, HMC 7 forming one of a series of Guidelines linked to HM 54, Guidelines for Management of Measurement for the Upstream UKCS. Operators are required to ensure compliance with BERR Contractual Requirements, Relevant Measurement Standards and Emission Controls as well as satisfying the requirements of sales and transportation contracts. Therefore, the auditing of petroleum measurement systems is a critical activity for all operators producing hydrocarbons in the UKCS and beyond. This activity has become more important of late due to the number of satellite fields that are being developed using shared infrastructures and transportation systems which are owned and operated by others. This publication has been produced as a high level Guideline on auditing for use by all of those involved in the Measurement process in the UK upstream oil and gas industry. Whilst reasonable care has been taken to ensure the accuracy and relevance of its contents, the Energy Institute, its sponsoring companies, the document writer and the Working Group members listed in the Acknowledgements who have contributed to its preparation, cannot accept any responsibility for any action taken, or not taken, on the basis of this information. The Energy Institute shall not be liable to any person for any loss or damage which may arise from the use of any of the information contained in any of its publications. This Guideline may be reviewed from time to time and it would be of considerable assistance for any future revision if users would send comments or suggestions for improvements to: The Technical Department, Energy Institute, 61 New Cavendish Street, London W1G 7AR e: technical@energyinst.org.uk vii

9 ACKNOWLEDGEMENTS The Institute wishes to record its appreciation of the work carried out by the following individuals: Roger Cox (principal author) and Gilbert Tonner of KELTON Flow Measurement Consultants for the preparation of these Guidelines. Active members of the HMC 7 Working Group especially those who have assisted with steering the project and for providing valuable expertise: Lol Coughlan David Geach Keith Hart Denis Pinto Douglas Griffin Geoff Freter Baron Bennington Michael Almeida Rod Bisset Sandy Hay Ian Bates Gary Moses Eddie Spearman Endre Jacobsen Jason Laidlaw Alan Spence Derek Wilson Bob Peebles Gary Miller Shell UK Exploration & Production (Chairman) ConocoPhillips (Vice Chairman) Energy Institute (Facilitator) Caledonian Flow Systems Ltd. (Honorary Secretary) BERR Chevron Upstream Europe Talisman Energy (UK) Limited Hess Corporation Britannia Operator Limited BP Exploration Operating Company Total E&P UK Maersk Oil North Sea UK Limited CNR International Statoil Metco Services Limited SREL Intertek Petrofac Performance PI Group Limited TUV NEL Limited The Institute also wished to recognise the contribution made by those who have provided comments on the draft document which was issued during an industry consultation period. viii

10 INTRODUCTION AND SCOPE Measurement System Auditing has become a critical activity for all operators producing hydrocarbons in the UKCS and beyond. For this document an audit is generally defined as a 'Technical Review of a measurement system, by an Independent Authority, against agreed criteria to ascertain if acceptable equipment, processes, procedures, management and personnel competency levels are in place'. Unlike other types of audits, e.g. ISO 9000, the auditor requires a technical knowledge of the processes and standards used in the Measurement Industry as a necessity to conduct 'Measurement System Auditing'. Auditors should be fully trained and qualified and their independence and traceability must be considered. From the operators point of view this means that all aspects of product measurement in oil and gas production are fully auditable and traceable. Operators must be capable of demonstrating that they have taken all practical and reasonable steps to ensure their measurement systems are properly designed, maintained, verified and operated. In today s UKCS auditing has become more and more important. This is due to more secondary fields being developed and produced through existing infrastructures to process and transport the produced fluids. As most oil and gas fields are jointly owned by a number of companies, it is not unusual for a nonoperating partner to perform a measurement audit to ensure their financial interests are secure. All parties are duty bound to ensure compliance with BERR Contractual Requirements, Relevant Measurement Standards and Emission Controls. We are all at risk of exposure or bias in any metering system e.g. on a typical 1 000TJ/d gas pipeline system ( per TJ), total annual revenue = 584M. The commercially accepted exposure (±1%) equates to 5.8M. Routine flow measurement auditing ensures that this exposure is not exceeded (and in many cases it can be reduced) experience suggests that it is not unusual to have an embedded bias (say!0,5% due to incorrect densitometer coefficient configuration). This cannot be regarded as an exposure but a definitive revenue loss of 2.8M. Routine auditing will help prevent this situation for <0,2% of the potential bias example. SCOPE This document is not intended to be prescriptive, but has been produced as a high level Guideline on auditing for use by all of those involved in the Measurement process in the UK upstream oil and gas industry. The intention is to highlight the key areas of each of the activities an operator and auditor must consider when embarking on the auditing of a measurement system. The approach to, and concept of, 'Measurement System Auditing' within this document is equally relevant internationally. Operators outside of the UK will have different regulatory regimes that will apply in place of the UK s. These Guidelines cover all aspects of Measurement System Auditing from the conceptual stage, through licensing and design, to operation, calibration/validation and reporting, of any measurement system to be used in the Oil and Gas industry for fiscal or environmental purposes. 1

11 HM 60 GUIDELINES FOR THE AUDITING OF MEASUREMENT SYSTEMS FOR THE UK UPSTREAM OIL AND GAS INDUSTRY The Document is arranged into five main sections: Section 1 Section 2 Section 3 Auditing requirements, defining the legal and statutory requirements for measurement system auditing, looking at the various UK laws, transportation agreements, risk exposure, environmental and other internationally agreed documents. The audit, highlighting the types of measurement audits, the audit service provider, the auditor/auditee and the ranking of audits. The audit process, covering the purpose Section 4 Section 5 Annex A Annex B and planning of the audit, the audit criteria, and the auditor and auditee responsibilities. Conducting the audit, outlining the methods used to audit a measurement system from start to finish. Audit reporting, covering the audit report, audit frequency, audit follow-up. Contains a glossary of technical and industry terms used in the document. Audit process map 2