Safety & Environmental
Management System
Issue Date:
03/16/2015
Version
3.1
SECTION 8 – ASSURANCE OF QUALITY AND
MECHANICAL INTEGRITY OF CRITICAL EQUIPMENT
OCS Rig Operations
Reviewed By
Reviewed By
Reviewed By
Reviewed By
Reviewed By
Reviewed By
Reviewed By
Reviewed By
GOM Operations Manager
Shelf and Gulf Coast Rig Projects Manager
Director of Deepwater Drilling and Completions
Director of Corporate HSER
GOM HSE Manager
GOM Production Engineering Manager
GOM Engineering and Construction Manager
Major Projects Manager
Steve Bodden
Craig Brazan
Craig Castille
Gene Cella
Patrick Eiland
Michelle Hebert
Greg Hernandez
Chris Whitney
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Stone Energy Corporation
Approved By
Senior Vice President GOM Operations
Keith Seilhan
Stone Energy Corporation
Version Number:
Version Number:
Version Number:
Version Number:
1.0
2.0
3.0
3.1
Issue Date:
Issue Date:
Issue Date:
Issue Date:
11/15/2011
05/01/2013
05/05/2014
03/16/2015
Commitment
Stone Energy Corporation is committed to the Health and Safety of its employees, contractors, and
the communities where it operates. We will operate under sound environmental practices and will
conduct our operations in compliance with all applicable laws, regulations, and standards.
Management Expectations
 All employees and contractors are individually responsible / accountable for self, coworkers, and
community when it comes to safety.
 All personnel, by actions and example, will strive to ensure a safe work place for employees and
contractors.
 All personnel will respect the communities and areas we work in through compliance and
environmental awareness.
Page 1 of 9
Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
Issue Date:
03/16/2015
Version:
3.1
Contents
8.
ASSURANCE OF QUALITY AND MECHANICAL INTEGRITY OF CRITICAL EQUIPMENT
3
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
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GENERAL .......................................................................................................................... 3
PROCUREMENT .................................................................................................................. 3
8.2.1 PROCUREMENT STRATEGY AND PROCESS................................................................ 3
8.2.2 PROCUREMENT OF CRITICAL EQUIPMENT ................................................................. 4
FABRICATION ..................................................................................................................... 4
INSTALLATION .................................................................................................................... 4
MAINTENANCE ................................................................................................................... 5
TESTING AND INSPECTION................................................................................................... 5
ASSESSMENT OF QUALITY ASSURANCE .............................................................................. 6
8.7.1 PROVIDER REQUIREMENTS...................................................................................... 7
8.7.2 PROVIDER EVALUATION AND APPROVAL ................................................................... 7
8.7.3 PROVIDER AUDITS .................................................................................................. 7
8.7.4 METRICS AND SUMMARIES ...................................................................................... 8
8.7.5 NON-COMPLIANCE .................................................................................................. 8
8.7.6 DISPOSAL OF NON-COMPLIANT MATERIAL ................................................................ 8
POLICY REVIEW ................................................................................................................. 8
8.8.1 BIENNIAL REVIEW ................................................................................................... 8
8.8.2 INCIDENT INVESTIGATION ........................................................................................ 9
Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
8.
ASSURANCE
EQUIPMENT
8.1
GENERAL
OF
QUALITY
AND
MECHANICAL
Issue Date:
03/16/2015
Version:
3.1
INTEGRITY
OF
CRITICAL
Stone Energy’s management requires procedures to be in place and implemented to assure critical
equipment is identified for any facility, well or project. All facilities, wells and delivery systems will
be designed, fabricated, installed, tested, inspected, monitored, and maintained in a manner
consistent with appropriate service requirements, manufacturer’s recommendations, or industry
standards.
The overall Stone Energy quality assurance strategy requires conformance to specifications and
the establishment of the requirements at the beginning of a project so they become part of the
overall project execution plan and maintenance program. The quality assurance strategy will carry
over into operating, maintenance, and Management of Change (MOC) procedures. Human factors
should be considered, particularly regarding equipment accessibility for operation, maintenance
and testing.
Stone Energy requires Contractors to have programs in place to address their own critical
equipment.
The objective of this policy is to:
8.2

Provide a standard for Quality Assurance (QA) and Quality Control (QC) evaluation of
critical equipment and services.

Reduce operations related non-productive time (NPT).

Establish continual improvements through review and corrective actions of nonconformances.
PROCUREMENT
Stone Energy requires a wide variety of materials and services for use under diverse
circumstances and across a wide array of geographical locations. This diversity requires the use of
a wide range of procurement strategies and methods.
8.2.1
PROCUREMENT STRATEGY AND PROCESS
Employees who are assigned to specific projects are responsible for determining the appropriate
purchasing methodology and strategy associated with specific situations, products and/or services.
Focus should be on consistent application of the following procurement strategies.
Only approved vendors are used to perform services on Stone Energy locations. At minimum,
approved vendors have met Stone Energy insurance requirements and have agreed to Stone
Energy terms and conditions.
Competitive bidding is the most accepted and commonly used purchasing method when the
exposure (project risk or financial exposure) is large enough to warrant the time and effort required
to competitively bid. Only acceptable bidders are solicited in a bid package. Depending on the
situation, this process is conducted in various manners to accommodate varying situations.
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Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
Issue Date:
03/16/2015
Version:
3.1
There are situations in which negotiations are the preferred purchasing method. These may
include situations where projects are highly confidential, where work scope changes are likely,
where used equipment is involved, or where materials or labor are in short supply. Published price
buying may be used whenever the potential benefits of competitive bidding or negotiating are
insufficient to justify the expense of such method. This method is commonly used for small quantity
purchases of miscellaneous stock items or when delivery needs do not allow time for use of other
purchasing methods.
Strategic alliances may be formed in order to align one or more companies to reduce the total cost
of acquisition or use of goods and services which are considered to be strategic to Stone Energy.
8.2.2
PROCUREMENT OF CRITICAL EQUIPMENT
The Stone Energy process for determining critical equipment is defined in Critical Equipment
Definitions, Service Levels and Quality Matrices Reference (an Excel document, hereinafter
referred to as Critical Equipment QM Reference) located in the SharePoint SEMS library.
Equipment designated as critical is based on safety and environmental exposure factors. The
procurement of such items will ensure there is proper documentation related to manufacturing
standards, material of construction, as well as inspection and testing before use on a well project.
Documentation will be retained by Stone Energy or it’s providers as long as the equipment is in
service for producing wells or temporarily abandoned wells and, as required by regulations, for
permanently abandoned wells.
The QA / QC processes detailed in the following standards apply to the following types of
materials, products, tools, and equipment:
8.3

Stone Energy Quality Assurance and Mechanical Integrity for Rental/Contractor
Equipment and Tools: This document provides guidelines, QA procedures and
selection criteria for service provider, contractor and rental tool equipment - (Click Here
For Link).

Stone Energy Quality Assurance and Mechanical Integrity for Tangible Well
Equipment: This document provides guidelines, procedures and selection criteria for
saleable and tangible manufactured items installed in the well - (Click Here For Link).
FABRICATION
During the fabrication phase, Stone Energy assures that materials and construction are in
accordance with the design specifications. Stone Energy, or its designee (vendor, contractor,
supplier), shall perform acceptance inspection for all new equipment in order to establish
adherence to design specifications. When appropriate in a Request for Quotation (RFQ) package,
project or equipment-specific requirements for critical equipment shall be provided by the
Engineering group. Documentation of acceptance inspection and testing will be available and
retained as long as the equipment is in service.
8.4
INSTALLATION
Critical equipment installed on a Contractor’s facility, such as a MODU, will be done in accordance
with the Contractor’s policy, procedures, and oversight.
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Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
Issue Date:
03/16/2015
Version:
3.1
Critical equipment installed on a Stone Energy operated facility will be assessed by Stone Energy
and will meet current design standards and site-specific requirements for safe and environmentally
sound performance. Stone Energy’s Engineering and Construction group, along with the
Production Operations Group, may be requested to provide technical expertise associated with
design, inspection or correction of deficiencies on existing or new-build facilities.
The installation of critical equipment in a well will be performed according to the approved well
specific requirements, all applicable regulations and Stone Energy’s Safe Operating Procedures
(SSOP). During the well construction or maintenance process, the Stone Energy Well Site Leader
will ensure critical equipment is installed according to the plans and procedures developed by
Stone and it’s service providers. The procedures address requirements for pressure testing and
barrier validation. Any discrepancy, defect or deficiency identified at the well-site will be corrected
or remedied before continuing work.
Stone Energy has implemented Stop Work Authority (SWA) and MOC policies which are applied
as needed. Any significant deviation from the well plan or SOP will require an MOC review. After a
well is completed, a pre-startup review per Stone Energy’s SEMS Section 9 (Pre-Startup Review)
will be conducted. From that point forward, Stone Energy’s Production Operations Group will be
responsible for the mechanical integrity of the well.
8.5
MAINTENANCE
Stone Energy’s primary contractors such as MODU owners, third-party contractors, and service
providers, are required to maintain their critical equipment in accordance with their internal
maintenance plans including the equipment manufacturer’s recommendations. Stone Energy will
perform audits to assure its contractors are compliant with their quality plans. Contractors are
required to submit an MOC request for deviations from the required maintenance plan on critical
equipment that may affect the well operations or related safety systems. During the well
construction process, well integrity will be verified through periodic pressure testing and / or
logging operations.
8.6
TESTING AND INSPECTION
Stone Energy has developed policies and guidelines for quality assurance on materials and
equipment used in the well construction process. Stone Energy inspection and testing
requirements are based on:
Page 5 of 9

Equipment criticality rating as defined in Critical Equipment Definitions, Service Levels
and Quality Matrices Reference located in the SharePoint SEMS library.

Level of risk associated with the well as referenced in Stone Energy’s SEMS
Operations - Section 3 (Hazard Analysis).
o
Operating conditions
o
Complexity and location of the work
Rig
Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
Issue Date:
03/16/2015
Version:
3.1
In addition to the well specific procedures, Stone Energy, in conjunction with its suppliers, has
developed Quality Matrices (QMs) located in the SharePoint SEMS library. The QMs provide the
following types of information:

Basic requirements

Inspection type

Acceptance criteria

Reference to inspection codes and standards
Critical equipment deficiencies are addressed directly via remanufacture or repair processes which
result in acceptance of the material or equipment after the component in question has been
inspected and accepted to QM requirements as noted above. The MOC process is applied for
variations from these QM guidelines. Audit requirements are as stated in Section 8.7.3.
The following quality assurance policies apply for various pieces of equipment:
8.7

Tangible Tubular Quality Assurance (Stone Quality Assurance Levels (QAL), QMs and
associated Standard Inspections)

Wellhead and Tree Quality Assurance (API PSL/RSL Guidelines)

Well Design & Assessment Criteria (Stone Service Level Matrices)

Down-hole Drilling, Completion & Well Service Tool Quality Assurance (TH Hill DS-1
Service Levels – Category 1 through 5, as applicable)

Rig and Service Equipment Inspection (Contractor/Vendor internal Quality Plans)
ASSESSMENT OF QUALITY ASSURANCE
Stone Energy has written policies regarding evaluation of quality assurance for Contractor critical
equipment which may be addressed in Bridging Documents and / or Bridging Agreements and
audits. It is Stone Energy’s expectation that all contractors design, procure, fabricate, maintain and
test their equipment in accordance with industry standards, manufacturer recommendations and
their own internal procedures.
Stone Energy will ensure that its critical equipment used in well construction and servicing is
designed, procured, fabricated, maintained and tested in accordance with one or more of the
following:

Regulatory requirements

Industry standards

Manufacturer recommendations

Internal procedures
Inspection and testing of critical equipment should be performed by qualified personnel before
utilization during well operations. The level of detail required for the inspection, testing and
verification are determined by the service levels defined by Stone Energy.
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Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
8.7.1
Issue Date:
03/16/2015
Version:
3.1
PROVIDER REQUIREMENTS
Providers and contractors shall have the following system components (or the equivalent or
comparable system components) in place within their organizations:
Quality Plans (QPs): The provider or manufacturer shall have QPs, or equivalent documentation,
that detail the necessary quality assurance and quality control required during the manufacturing,
supply, procurement, inspection, assembly, testing, and other steps required to produce or deliver
a material, product, tool, or component. The QPs shall set forth specific practices and procedures
aimed at translating the organization’s quality plan into operational results, or conformance to a
standard within a specified timeframe.
Inspection and Test Plans (ITPs): The provider or manufacturer shall have ITPs, or equivalent
documentation, with specific requirements and procedures for inspection and testing of
components and assemblies. ITPs may be an integral part of a QP or work as a stand-alone
document. ITPs are usually considered applicable when a provider supplies a tool or component
that they do not manufacture.
Standard Operating Procedures (SOP): The provider or manufacturer’s QPs or ITPs shall
reference SOP, as appropriate, which specify the objectives, scope, resources and roles, as well
as detailed steps for accomplishing the desired results.
Service and Maintenance Personnel Qualification: The provider will furnish, or make available,
the qualifications of personnel who will be participating in the operations to meet the minimum
requirements set forth by Stone Energy. Minimum training requirements for Stone Energy and
Contractor service and maintenance personnel can be found in Section 7 – Training.
Qualifications will be provided for each unique product and service provided for the operations.
8.7.2
PROVIDER EVALUATION AND APPROVAL
QPs, ITPs, SOPs, and PMs (or comparable / equivalent documents) shall be accessible at the
provider’s facility and / or at the field location. Stone Energy may request these documents be
submitted to the operations group for approval, to assign QA witness and monitor points, or in
order to add other specific requirements as deemed necessary.
8.7.3
PROVIDER AUDITS
Stone Energy may perform management system or process audits as well as facility audits of
providers, suppliers and contractors to verify compliance to this standard. The basis for the audit is
to:
Page 7 of 9

Validate the minimum requirements for providing a product or service.

Verify conformance to an established quality management system.

Confirm that sufficient provider and / or industry standard quality processes are in place
for manufacturing, inspection, and testing of equipment.

Obtain a general understanding of the quality culture of the organization.

Identify gaps or areas for improvement.
Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
Issue Date:
03/16/2015
Version:
3.1
Prior to performing an audit, the designated auditor will meet with the Stone Energy Drilling and
Completions (D&C) engineer or D&C operations team to determine the specific points of interest
which need to be evaluated.
A report of the findings will be presented to the D&C engineer or D&C operations team including
recommendations for corrective actions. The D&C engineer, or his designee, shall ensure that a
copy of the report is issued to the equipment provider and the Stone Energy D&C operations team.
8.7.4
METRICS AND SUMMARIES
Quality assurance program activity summaries including findings on significant conditions or
incidents, along with reports on acceptance and rejection rates will be available for review, and
should include, but not be limited to, the following types of information;
8.7.5

Number of facility or vendor audits including tracking of open / closed action items.

Total number of tools inspected by location with pass / fail percentages.

Total number of non-compliance reports (NCRs) for rejected or repaired items,
procedure discrepancies, and fit-for-purpose resolutions.

If required, access to approved provider QPs, SOPs, ITPs and PMs (or their equivalent
internal documents).
NON-COMPLIANCE
Any issues of non-compliance will be summarized in a Non-Compliance Report (NCR), or
equivalent document. Stop Work Authority (SWA) may be exercised, if necessary, to stop the work
until the compliance issue is resolved. The NCR process should be completed by the provider,
supplier or contractor who has operational control. This is to include the generation of the NCR as
well as documenting, issuing, and completing corrective actions. If necessary, NCRs may be
issued and tracked by Stone Energy QA Auditors and QA Oversight Technicians. Stone Energy
will recognize all provider, supplier and contractor NCRs or equivalent documents.
8.7.6
DISPOSAL OF NON-COMPLIANT MATERIAL
The disposition of non-compliant materials will be handled under the direction of applicable Stone
operations management and with guidance, as needed, from Stone Energy QA Auditors. The
material can be reworked, scrapped, or “Use As Is.” If the “rework” or “Use As Is” decision may
affect the working rating of the material, an MOC must be provided and evaluated.
8.8
POLICY REVIEW
This standard shall be reviewed on a biennial schedule by Stone Energy starting at a minimum of
one year from the approval date.
8.8.1
BIENNIAL REVIEW
Feedback regarding the efficiency of this standard shall be solicited from the D&C operations
team, the Stone Energy QA group, and the QA oversight providers. Comments, suggestions,
corrections, additions or deletions shall be considered during the biennial review. A summary of
the biennial review and any changes to the SOP shall be reviewed and approved by the respective
Stone Energy operations team.
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Safety and Environmental Management
System
Section 8 – Assurance of Quality and
Mechanical Integrity of Critical Equipment
OCS Rig Operations
8.8.2
Issue Date:
03/16/2015
Version:
3.1
INCIDENT INVESTIGATION
The review and corrective action process shall be used to investigate incidents per Stone Energy’s
SEMS Section 11 (Investigation of Incidents). The findings from this incident review process may
require a revision to the existing documents or the creation of new documents. These revised or
new documents, with updated requirements will address the specific quality process improvements
or corrective actions which may help to prevent reoccurrence of the incident(s).
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