PETROLEUM DEVELOPMENT OMAN

GEOPHYSICAL OPERATIONS From: XPO Date: 06-May-06 To: UCPM, (SEPI-EPM), BGP,XPS, Copy: XPM, XPO, File Contract: C31-0579 Reference: SUBJECT: BGP Crew (8622A)- HSE Management Inspection: AL-GHUBAR BARIK-3D project Date: 30-Apr-06 to May 1st 06

1. Introduction: As part of the 2006 Exploration HSE activity calendar, a management HSE inspection was carried out on May 1st , 2006 on the current BGP crew working in the PDO concession in AL-Ghubar-Barik-3D (North of Oman closed to QarnAlam). The precedent management HSE inspection took place in December 5th 2005. This inspection was led by Mr Rossem Van, Steven Jan -(UCPM) and Mr. Kurt Gerber(SEPI-EPM)) . Mr Tim Dowson BGP country manager and Mr.Hubert Ducournau (XPO) and Mr. Awadh Al-Yahyai (XPO1) participated as well 2. Back Ground BGP has started the current contract with PDO in June 27th 2004 to provide land seismic survey services (two-year contract C31-0579). Since the start of the contract, the crew has completed six surveys (2D or 3D) Further to a difficult learning curve, BGP became a good crew with good HSE results (one year free LTI on June 27, 2005 ).The crew achieved 703 days without any LTI, drove more that 2.5 million of km, and had more that 1.4 million of manhours (10 hours per day) exposure. We have to deplore one RTA (Road Traffic accident) non work related June 2005. No injuries. Three others RTA work related have been reported in June 2004(2) and August 2004 with an actual severity of one and low potential risk rating. The crew comprises of approximately 188 personnel (including sub-contractors) and 47 light vehicles and eleven heavy vehicles working from a semi-mobile basecamp location. In addition to the normal hazards associated to seismic operations, the main hazards identified in the current location are road safety and facilities. BGP sub-contracts some of the activities such as catering and camp moves.

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3. Term Of Reference 3.1 Objective: The objective of this inspection is to show PDO management commitment on all HSE issues and to assess the effectiveness of and compliance with the HSE management controls of PDO BGP and their sub contractors applied to land operations 3.2 Scope: During the two day inspection, special attention was given on specific activities as: Road traffic Vehicle inspection Journey management Emergency response Sub contractors management particularly catering. HSE Leadership Environments 3.3 Organization of the inspection. HSE Managements team divided into the following: Team A: Rossem Van,Steven Jan (UPCM) Awadh Al-Yahyai (PDO) Tim Dowson (BGP) Team B: Kurt Gerber (SEPI-EPM) Hubert Ducournau (PDO) Inspection team program Date: 30/April/06 Time Task 1400 HSE inspection team members should be at SeebAirport 1500-1550 Flight departure from Muscat to QarnAlam (OMA027) 1550-1730 Transport from QarnAlam airstrip to BGP Crew 1730-1900 HSSE induction Brief presentation of BGP Crew Base Camp walks about 1900-2000 Dinner 2000-2100 HSE inspection Team meeting Date:1/May/06 0530-0600 0600-0700 Attending daily tool box meeting Team A: Mechanics+Vibrator & Labo workshops, QC & survey office

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0700-0730 0730-1100

1200-1300 1300-1400 1400-1445 1445-1615 1650-1740

Team B: BGP clinic +Accommodation+Kitchen+Mess+ Food storage Breakfast Operation field Visit (Team A & B): Front Crew Back Crew Recorder team Vibrator team Lunch HSE inspection team discussion feedback to BGP Crew Departure from BGP Crew to QA airstrip Flight departure from QarnAlam to Muscat (OMA036)

4. General Observation The overall impression of the inspection team was good. The team recognized that the contractor has an adequate system in place to manage HSE, which is being effectively implemented at site. The conversations with the workforce (some in Arabic), clearly showed an awareness of line responsibility, hazards and knowledge of the controls in place. General HSE Findings: The BGP general policy and the daughter policies in Arabic, Chinese and English are well posted in different camp locations. Last two PDO LTIs (14 & 15) incidents are discussed in the early morning of daily tool box meeting. Facilities, Tools and Equipment The inspection was conducted during minimal activities in the mechanical workshop. In a normal operation, all vehicles are utilized on the lines except the ones that require maintenance. The team obtained a very positive impression of the crews vehicle maintenance and monitoring system ++ Very good camp facilities ++ Excellent vehicle tracking system + Good control/maintenance on lifting equipment/vehicles/geophones, vibrators + Continuous maintenance being carried out + Fire tender available on the crew (water, foam, powder) At Monday morning departure, on visual inspection, four vehicles with faulty lights; On previous day, inspection reports showed no problems. Quality of spare tires patchy Several staff on front line, not wearing sun/safety glasses (gloves). Use of PPE on front line, in particular sun/safety glasses, can be improved. o 47 light Vehicles dont have IVMS (PDO issue; not a PDO contractual requirement but EP standard); 11 HGVs have IVMS and Globel tracker installed. o PDO CSR vehicle is older then 5 years.

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Non-compliance/Housekeeping During the HSE inspection several points spotted on the main base camp and the recording line need special attention Defibrillator on low battery (for 10 days) One Oxygen bottle in clinic found empty (for period of ca. 10 days) Chemical storage in Cable shop not locked/no inventory; no log of consumption, users Chemical storage in mechanical workshop no log of consumption, users Mixing Solid material with Chemicals in Cable shop storage Petrol storage is unfenced put up fence -Survey truck with empty water tank driver responsibility Do not leave refuge in desert, not even banana, orange peels Some first aiders were not wearing green coverall Medicine cabinet not locked HSE Control Framework BGP have a systematic approach to journey management. The journey manager checks the journey management files for anomalies and violations and there is evidence that drivers who violate journey management rules are counselled. The journey details of the inspection teams were all registered on the JM board ++ Effective Journey Management System + In general very comprehensive, good quality documentation + Policies updated in Feb 2006 + HSE Policies displayed in three languages Occupational Illnesses is incorporated in TRCF calculation Classification of medical consultations is not correct work related/non work related Procedure for usage of the crane should be revised Follow up of reported defects could be improved several long term defects were observed on inspection o Use of private vehicle remains an issue this is also a PDO issue. However, BGP discourages private vehicle use in employment contracts. Communication BGP crew has very good communication such as SSB and VHS radios,with Thuraya phones and VSAT. Stop card is fantastic tool used to improve daily HSE and operational issues. + Toolbox talks were well done; systematic; 2 PDO LTIs well communicated + High number of STOP cards (200 in April); A lot of STOP cards come from the same staff; ensure STOP is used as observation tools non-English spoken on radio Encourage English only o Promote STOP system in the field, have STOP cards available in all vehicles Training HSE training matrix for the crew members is updated regularly and recently BGP external assessments for drivers have been done . + Training of high quality e.g. recent BGP Driver Training o Doctor should have once a year hospital training to refresh experience with real medical emergencies.

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Risk Assessment + + Good job safety analysis; propose to tidy up and issue in Arabic. Should be used regularly in pre-job Good HEMP

Responsibility, Accountability + Overall clearly defined However on the line staff were not aware of the hazards relating to their own job

Motivation BGP employee is very well motivated and happy about their jobs in terms of salraies and safe work place. HSE themes suggested to BGP crew by the inspection team + Motivation seems good, crews HSE performance currently at 702 LTI-free days + Happy bunch general good welfare o Propose to introduce Monthly themes to focus on key issues HSE Leadership Major improvements and big steps have been made in HSE Leadership but Senior Management focus can always be improved.

5. Close-out meeting at base camp: HSE inspection team give their feedback to the crew Party Chief, BGPs senior staff and PDO site-representative. Team congratulated the crew members for their 703 days without LTI and the achievement of 1.4 million hours LTI free. The team thanked the crew members for their hospitality, the full co-operation and openness to discuss HSE matters. The teams confirmed a good level of HSE management and implementation of the HSE MS. Commitment of BGP crew and country management towards HSE is high appreciated which needs more effort and involvements. In general the crew is well aware of the HSE standards and risks. The team concluded that the HSE system was properly described and documented. Implementation of the HSE-MS is good but not yet fully consistent in all departments of the crew.

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