Dear Ali Mahfoodh Majaeed, Mr Ali Rauf

Thank you for spending your afternoon with me yesterday at Rig 44. I also want to thank you for the invitation from
your Senior Manager, Mr Ali Rauf, to meet with you later this week at your Bardjazia camp. I accept the invitation,
and would like to take this opportunity to summarize the key elements of what I propose to discuss with you.

Summary
• General Impression
• HEMP – Hazard Effects Management Process [Hazard and Risk Register – to cover full scope of work]
• HSE & Q Competence
• Emergency Response Planning and Readiness
• Communication – [internal organization and external – co contractors / client]
• The Human Condition
• The Quality Consideration

The Way Forward – Improvement Plan

10 actions subdivided into Short Term, Medium Term and Long Term

Short Term Action Plan

1. Establishment of the Hierarchy of wells site control, based on Competence of Senior Personnel
2. Emergency Response, Alarms and equipment, Drills [training]
3. Competence Assessment and Training – utilize local training providers [international standards]
4. Fit for purpose Eye Wash, chemical shower stations on every rig
5. A robust Medical Emergency Evacuation Response capability to be in place, tested, maintained
6. An effective Preventive Maintenance System in place, must be based on competent persons in the IDC
organization. An example of competence standard reference – Moduspec Rig Inspection [an ISO 9001, Lloyds
Registered company]
7. Sufficient competent persons in Lifting, Rigging and Slinging to be available to fully control lifting operations
to good industry standards, on all locations.
8. Competent Derrick rescue capability [work at height, can include rescue from tanks, cellars etc]

Medium Term Action Plan

9. Mobilize an ISO 14001/OHSAS 18001 certified third party contractor to evaluate all aspects of IDC business
operations, with the objective to develop an HSE case that will meet the requirements of the mentioned
standards. First deliverable to be a comprehensive Hazard Risk Register / Enviro Aspect Impact Register, with
barriers, controls, etc clearly developed.
Longer Term Action Plan
10. Complete a comprehensive analysis of the IDC rig fleet for mechanical / technical readiness to execute drilling
/ workover operations with equipment that meets the functional requirements of good industry practice.
This will also require a robust review of the logistic / supply side of the IDC operation, to ensure ongoing
maintenance and repair support is delivered at a good industry practice competence level. Moduspec would
be a suitable Contractor.

In depth details of each of these elements are provided in attached appendix.

 GAP ANALYSIS on IDC MANAGEMENT HSE Aspects Drilling / Workover Operations

Summary of findings needing urgent attention Oct 7, 2012

The initial objective of the gap analysis exercise was to assess the management of HSE
aspects, in the real-world, on-site operations of IDC, [including rigs where IDC are using
Project Management contractors for support]. This became urgent, in the wake of an alarming
number of HiPo incidents, and continuous reports of high risk behaviors and conditions by way
of STOP or HOC cards, ZFOD team feedback, and obviously poor PMS [Preventative
Maintenance System] indicators. However, once the site visits began, it became clear there is
a significant Quality aspect that is stark by its absence. NPT – non productive time, is reliable
and serious indicator of this fact.

Recent meetings with IDC HSE representatives, provided an understanding that IDC are
committed to obtaining ISO 9001 certification for their management system. There is no
evidence that a ‘work scope specific’ Hazard and Risk Register [Aspects & Impacts – ISO 14001
Environmental Standard] is in place. This is the foundation of any Management System that is
genuinely committed to provision of a quality service to clients, and the process of continual
improvement. There is little REAL evidence of commitment to continual improvement, and
attention to the clients requests. Significant improvements at the rig sites in HSE [and Q] will
not be sustainable without significant improvements in the IDC support systems – Human
resources, competence and training, preventive maintenance, stores and supplies / inventory
management etc.

Top Hazards for this work include

1. Major Safety Critical equipment failures 8. Housekeeping
2. H2S and Gas release events 9. Slips trips falls
3. Work at Heights [DROPS 10. Pinchpoints
4. Hoisting ops [Rig equipment & mobile 11. Emergency Response failures
Lifting] 12. Confined spaces [mud tanks, cellars]
5. Energy Isolation [electric, rotating] 13. Unclear Communication / Interfaces
6. Released pressure (hydraulic and gas) 14. Extreme heat
7. Competence - Training 15. Transportation

HSE & Q Competence

Key personnel who must be COMPETENT for Level 1 Safety critical roles are IDC Rig
Managers / Toolpushers / Drillers / Assistant Drillers, (including the HESTON, SAKSON,
OiLSERV reps)
Level 2 Management may be considered as the IDC Field Managers, IDC Company Man,
ZFOD Company Man.
1. Currently there is a disturbing potential conflict / disconnection between the different
representatives. At this time the Company must assess and acknowledge the real
competence level of ZFOD company men, the IDC Company men, or even the Expat FIC -
Project Management reps. Examples of best practice operations in the world ensure
that the persons accountable and responsible for HSE Critical decisions have deep
understanding of Well drilling and Intervention [Workover & Rigless] operations. If the
IDC and/or the Project Management reps are not competent, then the rig is at risk, the
well is at risk, and people are at risk.
2. Fundamental HSE competence – at this point our greatest concern is the Safety element
of HSE - to prepare Job Hazard / Risk Analyses, for any sort of Safety critical job is not
apparent, even by most FIC. After examining the systems at each one of seven rigs, not

1|Page David Perkin – eni Well Ops HSE

 one Job Hazard Analysis has been produced for evidence of understanding and
application of good practices.
3. No functional “tools” are readily available to assist in improving the understanding of
the work force, or the supervisors, nominally responsible for seeing the work is
conducted in a safe way.
• Tools such as generic JHA’s, checklists, basic procedures or method statements, tool
box talk prompts, effective Permit to Work systems and controls, etc
4. There are numerous specific high risk tasks and activities, which require hazard specific
training, in some cases with increasing levels of competence specified; is conspicuous
by its absence. [managing major emergencies, lifting, work / rescue at height or
confined spaces, mixing chemicals, etc]

Emergency Response Planning and Readiness

1. Alarm systems, early warning systems do not work reliably if at all. Basic Kick Control
procedures are not posted, kick control work sheets are too frequently not in place
2. Primary barriers and controls [BOPs, Accumulators and their control panels, choke and
remote controls, monitoring the well for flow or losses, especially trip tanks] are
frequently not sound, or fully functional
3. Generally, readiness for a competent response to a kick is not widely apparent
4. Some rigs do not have escape lines from the derrick
5. Eyewash stations and showers are mostly ineffective, in some cases hazardous in their
own right, being connected to location well water supply, or the water storage systems
are unprotected from the sun which results in water hot enough to cause 1st degree
burning
6. Medevac capability is not up to minimal standard
a) Verification of the competence of first aid / local medic
b) ambulances, basket stretchers
c) appropriate first aid kits and supplies for response to major trauma
d) sufficient and robustly protected oxygen supplies / including readily portable
response packs
e) defibrillators
7. Realistic Drills to allow all team members to practice the necessary response [include
WaH, confined space (mud tanks/cellars) rescue] are not a regular occurrence
8. Not one person has been trained in derrick rescue, good industry practice requires at
least 2 persons per tour, at all times shall be on location, or a robust alternate risk
assessed alternative that has been notified to Company/Client, and realistic drill
scenarios carried out to verify effectiveness.
9. “Clinic’s – Medical Treatment point” level of equipment/capability are below standard
for the numbers of persons on location, the hazards in the workplace, and the final
response time - to ensure a seriously injured patient can be delivered to a competent
Doctor [specialist where necessary] in less than one hour – the “golden hour”.
10. Ambulances are shared among many rigs, in some cases rigs share clinics also.
11. Medics are expected to rely on personal cell phones for communication.

Communication - Organization
1. Separation of departments – IDC organization is not working together – there is no
sense that the success of IDC as a national organization, depends on the cooperation of
all departments, working together for the benefit and improvement of the company
2. Hierarchy of decision making on critical Loss Prevention [includes HSE and Quality]
aspects – suggestions from site personnel to senior management / logistics support
teams, are regularly ignored or over ruled, does not seem to matter if it comes from
OiLSERV, Heston, Sakson or IDC.
2|Page David Perkin – eni Well Ops HSE
3. Equipment ordered to execute specific operations does not get delivered / or is not in
stock or available – possibly the warehouse people don’t understand the importance of
location specific inventory management, or the members of the supplies / warehouses
do not know their own stock.
4. When senior management and support teams [electric or mechanical maintenance,
stores and supplies] deliberately ignore or reject requests from the field, they are
putting the field line team, whether IDC or the Project Management reps, in an
impossible situation, forcing them to execute work with unsafe equipment, or
conditions.
5. Failure to collaborate in this complicit unsafe practice, and the resulting unsafe
conditions, has been reported by IDC persons, as reason for removal or change of job
and responsibility [the clear message from IDC management is, don’t make trouble].
6. There is still a strong negative understanding of the value and application of HOC / STOP
card system. Participants [including Project Management reps, including senior IDC
person on location] have been threatened and bullied to the point they do not/will not
participate. This is a major reason why Line Managers must lead by example in this
programme.
7. The ‘Safety Law of SOC’ provides clear language and guidelines that empower line
managers to take action with employees who will not obey the mandatory rules of Safe
work. Employees who are not acting in a safe way, using the designated safety
equipment, following safety rules, can be dismissed from the location, with no
salary/wage for the day. The law is there, it MUST be communicated, applying discipline
if necessary, to see the workforce change behavior.

The Human condition / welfare of the workforce is dire

The accommodation, food services, personal hygiene facilities, and rest conditions that IDC
provide for staff is unacceptable. Perhaps if the senior management responsible for
approving these services, was obliged to work and live in the provided facilities at rig sites,
as the work force do, they might appreciate this reality: that if people are treated poorly,
without basic respect for human needs, then it will be impossible to implement any
meaningful improvements where there is an expectation for the workforce to embrace a
new way of thinking about Safe Work Practices. If the message from IDC to the work force
is “we do not sincerely care about your health or safety”, then the workforce will not be
likely to respect or collaborate with the Company.

The Quality consideration

1. A major issue is that the well operations work scope are mostly turnkey, however
fundamentally, the wells are an asset of the company. Although the rigs are the assets
of IDC, those rigs are there to execute the scope of work to complete, and deliver a high
quality well. Respect for the expectation of the client - the rig, and the crews, will be
managed in a way to deliver a quality job to the client - is almost nonexistent.
2. Moduspec completed an inspection of two rigs [DM 44 and DM 46] almost one year ago.
There were many items that were identified as critical or major, which have seen little or
no action to properly close out, as of this moment. Similar equipment failures or
concerns exist on almost all of the other rigs inspected during this gap analysis. The
‘lessons learned’ from the Moduspec inspections of DM 44 & 46, should have been
automatically flagged for attention, and lateral learning.
3. There are so many critical risk items that are already at a failure point on so many of the
rigs, that they are all candidates for any number of “accidents waiting to happen”.
There is a belief that because many of these rigs are quite new, some even still under
warranty, that the equipment is not a problem. However there is no evidence of a
“customized for this extreme environment – fit for purpose” preventive maintenance
3|Page David Perkin – eni Well Ops HSE
 system, and the equipment – as good as it may be fundamentally – is now alarmingly
not fit for purpose.
This is critical - one of the most significant hazards currently facing the operation.
4. There are many examples that could be listed, of the absence of respect for the interests
of the client. The impression at the rig site level, seems to be that IDC as a company –
believe they do not need to genuinely improve. They are a subsidiary organization
within the Iraq Ministry of Oil, and rules and standards of good industry practice to not
apply to them. Quick, improvised fixes – most are temporary, and therefore repeated
far too often, are the rule of the day.

The assessment is bleak. However there are good people working for IDC and the
management contractors. They do care, and they do want to improve but there is a sense
from them that it is hopeless. Unfortunately the good people, with the best will in the
world will not be sufficient to make any substantial improvement if the status quo in the
large organization that surrounds them, does not change significantly. If they are provided
the tools and support they need they can begin to make a difference.
The significant changes – that will make a profound and lasting difference – are required in
the whole organization, in the way management think about doing their business. All of the
failures are a reflection of a management system that is not working, a work environment
that is not healthy. The necessary ‘cultural’ improvements must happen across the
organization . . . anything less will not be successful, it will be akin to treating lung cancer
with aspirin.
The value of each workforce at each rig becoming one team, where every member is
respected and valued, is a powerful and effective improvement. To achieve the most
positive outcome, there MUST NOT BE an opportunity for the more experienced and senior
people who may work for us and raise their competence in the improvement plan, to be
‘poached’ to a different location or project for another Client, letting the local situation
return to the previous unacceptable level.

Such incomplete implementation will seriously dilute the overall improvement result.

The Gap Analysis exercise resulted in an assessment of how the HSE and Q conditions may
be realistically improved.

There are 10 basic Improvement Actions broken down into Short Term, Medium Term and
Longer Term.
All of them need action taken. Failure to implement the improvement actions will allow an
intolerable or critically unsafe condition to exist.

They are provided in the attachment titled 0.2 Proposed Improvement Actions.

The attached zip file has information / examples for valuable reference to the contractors
with information on available resources to help with the international certification, and the
training to deliver the competencies identified for improvement.

4|Page David Perkin – eni Well Ops HSE

 GAP ANALYSIS on IDC MANAGEMENT HSE Aspects Drilling / Workover Operations
Oct 10, 2012
Proposed Improvement Actions & Deliverable Schedule

Short term action plan

Below are recommendations that can be considered as short term – the minimum actions that
must be taken, almost immediately, depending on management agreement.
The improvements are urgently required to meet basic good industry practice. By themselves
they will not result in significant organizational culture improvements that will be sustainable, but
they can make a big improvement in immediate HSE controls.
In relative terms the costs for these improvement recommendations is not high, only a few days
of the nominal estimated day rate, for each rig.

1. In the short term, the Company should consider the options to reassess how the competence
standard for the Project Management contractors representatives can be improved.
Ultimately the Company has the greatest interest in seeing well maintained, safe equipment
and operations and well trained competent people working on the rigs that drill and workover
the company’s wells.
However, if we are locked into a relatively long term Contract directly with IDC [3 to 4 years]
we must find a way to engage IDC to improve, with a change to the contracts that will allow
strong competent well site management to be professionally respected by IDC. Failure by IDC
rig site managers and IDC support base to demonstrate cooperation to address safety
concerns with timely action, must result in financial penalty when delays in the response to
the improvement actions, result in increasingly dangerous unsafe conditions.

Deliverable 1.1: IDC shall review their HSE Policy statement to ensure the Management
expectations are explicit and understood – all employees from Rig Managers to roustabouts,
are committed to deliver continual improvements in Safety performance. It should make clear
reference to the laws of IRAQ, and the compliance standards of the Ministry of Oil. Failure to
comply, will be treated with the disciplinary action that is explicit in the law. IDC senior
management must deliver this message personally to the wellsite, making it very clear that
any practicable recommendation for improving safety will be acted on, whether or not the
person making the recommendation is from IDC, ZFOD, eni, or Project Management
contractors reps. Company to be provided with

a. a copy of the revised Policy

b. a copy of the minutes of a special Safety Meeting in which the message is specified,
and signatures of attendees, particular senior line reps from each rig will
acknowledge acceptance and understanding.
1st Action by Nov 30, 2012

Deliverable 1.2: Company [eniZFOD], ZFOD SOC, IDC and Management Contractors produce a
formal agreement letter – to be a contract record – clearly indicating the seniority of final
decision making on location, that rig management operations decisions will not be made that
increase risks from existing hazards to intolerable / critical levels. 2nd Action by Nov 30, 2012

Deliverable 1.2: Project Management Contractors must establish a more robust screening
criteria for HSE Competence for their ‘on-site’ representatives [the FIC and team, including
support]. PM contractors will notify Company by formal letters – to be a contract record –
what actions are planned to significantly raise the profile and attention to HSE matters by
their site representatives. 3rd Action by Dec 15, 2012

2. IDC and /or Project Management contractors will agree to provide a plan to develop,
commission, test, alarm systems to demonstrate ability to provide audible / visual alarms
David Perkin – eni ZFOD Wells Operations - HSE
 sufficient to warn all workforce for any foreseen emergency. All rigs without functioning
alarms will be identified. H2S detection alarm equipment must be installed on rig operations
that are considered at risk. Plan will include details on practice drills to measure workforce
response.

Deliverable 2.1: Formal letters to Company from IDC each PM contractor – to be a contract
record – identifying rigs to be equipped and commissioned [includes training of the workforce
in response]
1st Action by: Oct 31, 2012

Deliverable 2.2: All rigs [for eniZFOD] equipped with alarms 2nd Action by: Jan 31, 2013

3. IDC and /or Project Management contractors will assess local training providers in the Basra
area, or regional centers and select key members from their site management teams,
Company Men, Rig Managers, Toolpushers, Drillers, HSE, Mechanics, Electricians to
attend/receive training in good industry practice basic HSE skills, starting with Hazard
Identification and Risk Assessment, and then specific training based on the top Hazards
identified earlier.

Deliverable 3.1: 50% of Identified Key persons on each rig, receive training /certification from
in country training centers, IDC will provide a list of selected persons / training dates
1st Action by: Mar 01, 2013

Deliverable 3.2: Balance of key persons trained for each rig 2nd Action by: Aug 31, 2013

4. PPE and protection equipment for workforce: IDC and /or Project Management contractors
must ensure that sufficient and appropriate PPE will be available for all credible work
scenarios. Face shields, goggles, welding helmets integrated with hard hats, rubber boots,
gloves and aprons suitable for mixing hazardous chemicals, or cleaning mud tanks etc, will be
available and provided without restriction to the relevant workforce. Furthermore, IDC must
install fit for purpose eye wash stations, and shower stations for all rigs. At a minimum, one
located on the mud tanks near the mini mud lab, a second eye wash station adjacent to the
main chemical & mud mixing hoppers, and chemical shower stations also adjacent to the main
mixing hopper.
Water supply must be clean, fresh, [potable would meet basic requirements]. Serious
consideration must be given to providing protection from the sun, which can quickly heat the
water to a point that using it could result in 1st degree burns, particularly for eyes. Shade
designs and maximum heat reflectivity [polished stainless steel or white paint for example,
and awning/tents would be examples of improvements]. IDC must recognize this is critically
important, and mandatory safety equipment on every rig in their fleet. Good practice would
see eye wash stations / capability installed in workshops, where grinding and welding
operations typically take place.

Deliverable 4.1: 100% compliance - each rig, will have the minimum suggested equipment as
indicated, immediately. 1st Action by: Nov 15, 2012

5. IDC and /or Project Management contractors will, develop an medical emergency evacuation
plan that is appropriate for the real potential serious injuries that can occur
[head/brain/spinal trauma, thoracic trauma, internal trauma, orthopedic trauma, burn
trauma, H2S gas]. Medical emergency evacuation response, must ensure that seriously
injured persons can be competently handled and transferred to an appropriate treatment
center and specialist within one hour of injury occurrence. Sufficient trauma management
equipment must be on hand, and the evacuation plan must be tested [critical injury scenario
drills from rig floor, cellars etc] to ensure all members and equipment are fit for purpose.
 Deliverable 5.1: Medical emergency evacuation plan[s] developed, including drill scenarios
and schedules submitted for Company review / approval. 1st Action by: Nov 15, 2012

Deliverable 5.2: Implementation on all rigs [verified by drill reports]

2nd Action by: Mar 01, 2013

6. IDC will select key competent persons,[Chief Mechanics, Rig Managers etc] ideally bilingual or
multilingual [English plus] to complete Lloyds Register Moduspec Rig Inspection training, and
Preventive Maintenance Management [or equivalent] in order to have in-house competence
for assessing major Safety Critical equipment on each rig. [IDC should recognize it is in their
interest to not limit this improvement to support teams of the rigs working for ZFOD].
It is very much to the benefit of IDC to have the earliest assessment of pending Safety Critical
failures, to anticipate and order the necessary preventive maintenance materials, or
replacement parts to ensure the equipment is operating at maximum efficiency and safely.
Routine rig inspections to be carried out with a frequency to be determined by rig condition –
perhaps monthly until the rigs are all fixed and operating properly, then less frequently.

Deliverable 6.1: IDC will submit a training plan and proposed training dates, identifying
competent people to be trained as Rig Inspection persons. – Training Plan w names

1st Action– Nov 30, 2012

Deliverable 6.2: – Info - Persons trained 2nd Action– June 30, 2013

7. IDC Project Management must take positive action on the findings from the MODUSPEC
inspections from 2 years ago, as well as the most recent inspections. This may be as many as
8 rigs, and there are many “Critical and Major” assessments. Review of findings from 2 years
ago, indicate little or no attention has been paid to them. This is a clear indication of a lack of
commitment to operate according to good industry practice and with a real commitment to
managing the work safely.
Deliverable 7.1: Moduspec Inspections outstanding actions checklists closed out.
– Schedule for execution submitted to Company 1st action– Nov 15, 2012
– Checklists with actions closed out and verified 2nd action– June 30, 2013

8. IDC and/or Project Management Contractors will select key competent persons [Rig
Managers / Toolpushers] for Person In Charge of lifting operations training. Alternatively,
subcontracting the services of a competent person from local/regional Contractors certified to
recognized good industry practice standards, that will provide this service, including the
inspection of all mobile lifting equipment, and accessories, and the attachment points for all
lifts.
Deliverable 7.1: Formal letter from IDC / and or Project Management Contractors to notify
improvement plan for Lifting competencies at well operations. Action by: Nov 30, 2012

9. IDC and/or Project Management Contractors will identify key competent persons
[Toolpushers / Drillers / Assistant Drillers /Derrick hands] for derrick rescue training. Target
requirement is two persons per tower/shift shall be qualified.
Deliverable 8.1: Training plan with the details of the training provider and course of
instruction. The names of 2 persons per shift / 4 persons per rig to receive this training.
Suggest one of the four persons is senior [Toolpusher] as they should be on location all the
time. 1st Action by Nov 30, 2012
Deliverable 8.2: At least one person per crew on tower is trained 2nd Action by Mar 01, 2013
Deliverable 8.3: Each rig has 2 x2 persons on tower trained 3nd Action by July 31, 2013

Medium term action plan

IDC have started to prepare their organization to achieve ISO 9001 certification. If this objective
is genuine, it implies that all of IDC operations, and contractual arrangements with
subcontractors and suppliers will all meet the same requirements. It is not possible to obtain and
maintain certification if the management system is not committed to good/best practice,
continual improvement. This implies the complete organization that supports the drilling
operations, logistics, parts and supplies, inspection services etc will also meet ISO 9001
standards.
Parallel to the short term actions identified above, IDC should source a Risk Management
Specialist Contractor to evaluate all aspects of IDC business operations, and prepare a Land
Drilling Operations Safety Case based on a robust Hazard & Risk Register. This Contractor will be
retained to monitor IDC progress for implementation of the new Management system against the
timeline, on a semiannual basis, and it will be very valuable to help IDC achieve the ISO
certification.
Fundamental administrative documents [rules and tools] such as JHA’s, Procedures, Method
Statements, checklists, PTW system, ER Plans, Drill scenarios and evaluations, Audit and Training
Plans, to be developed first.
Since this work will take place in parallel with the short term action plan above, by the time the
medium term action plan is ready to implement, a significant cohort of persons from IDC will have
already received some of the high value specific training that will be valuable to assist competent
implementation of the new HSE & Q Management system.
The objective must be that IDC can demonstrate they have assessed their Hazards and Risks, and
with their new HSE&Q MS, will be able to manage them to ALARP . . As Low As Reasonably
Practicable.

10. IDC will contract an international competent Risk Management Contractor [Risktec or
equivalent] to audit / assess IDC operations,
a. in the offices of Senior Management
b. in the logistics and support operations including
i. emergency response support [firefighting, oil spill, medical emergency]
ii. Contracts and Procurement [Contractor Management]
iii. warehouses
iv. parts depots
v. telecoms and IT support
vi. camps and welfare operations
vii. human resources
viii. transportation
c. drilling rigs
d. workover rigs
e. rigless operations
and prepare an improvement plan for development of an HSE & Q Management System, and
appropriate Safety Case for Land based drilling, workover, rigless operations in Iraq.

Deliverable 9.1: Formal letter from IDC to notify Company of the Contractor Mobilization date
to carry out the above approved Scope of Work. Action by: Dec 31, 2012

Deliverable 9.2: IDC present to Company the Improvement Plan/Schedule for implementation
developed by the Specialist Risk Management Contractor, and approved by IDC top
Management. Action by: Mar 31, 2013

Deliverable 9.3: IDC present to Company the final HSE& Q Management system, approved by
the Senior Management for implementation across Land Rig Operations in IRAQ.
Action by: July 31, 2013
 Deliverable 9.4: IDC present to Company a schedule for the rollout [introduction to the
workforce and training for key users], adoption of the plan across the organization, including
the translation of work specific instructions, tools and rules, in Arabic for the benefit of the
end users – the work force. Verification by internal Audit Action by: August 30, 2013

To effectively complete the work proposed in this last deliverable 9.4, could easily take two years
or more, and will require serious commitment from senior management to see it implemented. It
will not be easy changing the culture of an organization where good industry practice has not
been known or applied for many years, if at all. This is a tremendous cultural challenge to
overcome. But the journey begins with the first step.

Longer term action plan

The final recommendation can be considered as longer term – actions that will very likely need
some lead time to establish a scope of work, place a contract, mobilize a contractor, execute the
work scope, obtain management approval [budget] and complete the improvement actions.
There will be potentially significant costs to obtain the necessary replacement parts, receive them
in country and carry out the repairs. However there is no option to this. This work must be done,
the current risk situation with Safety Critical equipment on all rigs is critical to intolerable in many
areas, and any Rig continuing work under such conditions only increases the risks of catastrophic
failures. It is not a case of IF A FAILURE WILL HAPPEN, it is a case of WHEN THE FAILURE WILL
HAPPEN.

11. IDC / Project Management Contractors will contract an international competent service
provider [Moduspec example] to carry out Baseline survey of Safety Critical equipment on all
IDC rigs. Based on the surveys, an equipment inspection improvement plan, indicating
priority of actions, will be developed. The order of rigs to be inspected should be relative to
the planned work scope and the time frame. Action parties responsible, and time frame for
completion of the necessary improvement actions will be clearly defined.

Deliverable 10.1: Formal letter from IDC and/or Project Management Contractors to notify
the plan and schedule for specific rigs to be assessed by Moduspec. Action by: Jan 31, 2013

Deliverable 10.2: Formal letter from IDC and/or Project Management Contractors to inform
Company of the findings for the selected rigs including the /criticality/action plan with
accountable persons identified. Action by: July 31, 2013

Deliverable 10.3: Remedial actions from action plan, implemented and verified by Moduspec
[or competent person] on all rigs working for ZFOD Action by: Jan 31 2014