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Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2013 Revision: 8.0

Global Marine Risk Management

Global Marine Vetting and Audit Criteria Summary

COPY ONLY VALID WHEN VIEWED VIA INTRANET/INTERNET SITE www.SIS3.com.

Global Marine Vetting and Audit Criteria Summary


TABLE OF CONTENT

Issue Date: 02/13/2012 Revision: 8.0

1.0 2.0 2.1 3.0 3.1 3.2 3.3 3.4 3.5 3.6 4.0 5.0 5.1 5.2 5.2 5.3 5.4 5.5 5.6

GENERAL ................................................................................................................................. 4 OBJECTIVE .............................................................................................................................. 4 Vessels Subject to Phillips 66 Global Vetting Criteria (bulk liquid): ......................................... 4 VESSEL ACCEPTANCE REQUIREMENTS: ALL VESSELS ................................................. 5 Additional Criteria for Marine Movements involving Lightering (Vessel to Vessel Transfers): 6 Time Charted Vessels (Ships).................................................................................................. 6 Technical Review (TR), Structural Criteria All Vessels......................................................... 6 Newbuild Vessel Consideration................................................................................................ 7 Compliance with Local and International Conventions and Regulations All Vessels........... 7 Protection and Indemnity (P&I) Club All Vessels .................................................................. 7 VESSEL ACCEPTANCE REQUIREMENTS - U.S. FLAG BARGE, TUG, TOWBOAT (ONLY) 8 DOUBLE HULL AND AGE CRITERIA - ALL VESSELS .......................................................... 9 Phillips 66 Double Hull Criteria for Ships and Barges.............................................................. 9 Phillips 66 Age Criteria for Ships and Tugs/Barges ................................................................. 9 Drug and Alcohol Policy.......................................................................................................... 10 Flag State / Nationality............................................................................................................ 10 Acceptance and Rejection on Status Changes...................................................................... 11 Conditions resulting in Vessel and/or Operators Being Placed On Hold or On Notice .... 11 Voyage Risk Assessment (Piracy/High Risk Transits)........................................................... 12

CONDITION ASSESSEMNT PROGRAM - CAP (CAIP) REQUIREMENTS ............................................ 9

GLOBAL MARINE RISK MANAGEMENT/VETTING CONTACT INFORMATION ................................. 12 EMAIL........................................................................................................................................................ 12 MAILING ADDRESSES:........................................................................................................................... 13

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary


Updated with technical changes following Vetting and Audit Manual changes Updated and changed to Phillips 66 document from ConocoPhillips. Updated and changed to one document. This document combines two PSX MRM publications: Marine Vetting & Audit Criteria Process Summary for Trade Floor and Marine Vetting & Audit Criteria for Vessel Operators Rev 5.0. Added Piracy Risk Assessment Updated barge technical criteria Double Hull Criteria updated for US carriers conference Revision for posting through Intertanko publication Updated/edited for external sharing through SIS link Original Summary after corporate merger Description of Changes Director, Vetting Director, Vetting

Issue Date: 02/13/2012 Revision: 8.0

8.0

02/12/2013

7.0

05/01/2012

Manager Marine Risk Management Manager Marine Risk Management Manager Marine Risk Management Manager, Marine Risk Management Manager, Marine Risk Management Manager, Marine Risk Management Manager, Marine Risk Management Manager, Marine Risk Management Approved by

6.0

10/01/2011

Director, Vetting

5.0

11/30/2009

Director, Vetting Director, Vetting Director, Vetting Director, Vetting Director, Vetting Owner

4.0

09/16/2009

3.0

03/13/2009

2.0

06/2006

1.0 Revision

08/2003 Date

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary


1.0 GENERAL

Issue Date: 02/13/2012 Revision: 8.0

Phillips 66 Company (PSX) headquartered in Houston, Texas is an advantaged downstream energy company with segment-leading Refining and Marketing (R&M), Midstream and Chemicals businesses. with R&M operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day. As a marine shipper of bulk hydrocarbons and related chemicals (commercial cargo) globally, Phillips 66 participates in several industry organizations such as Oil Companies International Marine Forum (OCIMF), American Waterways Association (AWO) and International Liquid Terminals Association (ILTA). The company incorporates the international Regulations, guidelines, recommendations and best practices set forth by these industry forums and regulatory agencies within its global vetting criteria. Phillips 66s objective is to meet its Marine Transportation needs in a responsible manner by placing emphasis on protecting people, the environment, corporate assets and reputation. Phillips 66 expects to achieve this by using well operated, good quality vessels with the goal of being accident and pollution free. As a member of OCIMF, Phillips 66 fully backs and participates in the OCIMF SIRE as a full and Submitting Member. Phillips 66, in partnership with other oil companies, uses the Ship Information System (SIS) to process all available information regarding vessels used in the transportation of commercial cargo. The most recent version of this Phillips 66 Vetting criteria (Global Marine Vetting and Audit Criteria Summary) can be found at www.SIS3.com. Requests for Phillips 66 SIRE inspections are also able to be made at www.SIS3.com.

2.0

OBJECTIVE

Phillips 66 core objective is to meet its Marine Transportation needs in the most responsible manner by placing special emphasis on protecting people, the environment, its assets and reputation. Phillips 66 expects to achieve this by using quality vessel operators and vessels that remain accident / pollutionincident free. 2.1 Vessels Subject to Phillips 66 Global Vetting Criteria (bulk liquid):

All vessels carrying Phillips 66 owned bulk liquid commercial cargo (including vessels carrying part cargoes). All vessels calling at a Phillips 66 owned/operated marine terminals for bulk liquid commercial cargo. All vessels calling at a Phillips 66 leased terminal with PSX titled or owned bulk liquid commercial cargo, with the exception of vessels calling for FOB/DES cargoes at third party terminals where Phillips 66 leases tankage (unless specifically required by contract).

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2012 Revision: 8.0

All vessels calling at a Phillips 66 owned/operated offshore field/installation carrying bulk liquid hydrocarbon or chemical commercial cargoes. All vessels chartered by or on behalf of Phillips 66 with the purpose of carrying bulk liquid hydrocarbon or chemical commercial cargoes. All vessels involved in a STS (Ship To Ship, as well as Barge to Barge/Barge to Ship) transfer of a Phillips 66 commercial cargo, including both the discharge vessel, receiving vessel and STS Service Provider Company.

3.0

VESSEL ACCEPTANCE REQUIREMENTS: ALL VESSELS

Prior to contracting, use, and/or periodically when under contract, all applicable vessels under Section 2.1 above shall be nominated by a Phillips 66 Entity into the Vetting System SIS.3 for vetting assessment. Only vessels accepted by PSX Marine Vetting may be used to carry bulk liquid hydrocarbon or chemical commercial cargoes or call to Phillips 66 Marine Terminals. Vessel hull Criteria is found within Section 5 of this document. Additionally, each Ship and Non-U.S flag Barge being considered for a potential Marine Movement must meet the following criteria: 1. 2. 3. Be nominated by a Phillips 66 or Phillips 66 Joint Venture entity. Be reviewed and accepted by the Phillips 66 Vetting Team. Include the submission of a current and valid Ship Questionnaire (SQ) submitted to www.SIS3.com with a date-stamp not exceeding one month. The SQ shall be submitted by the Vessels Technical Operator, which is defined as the entity stated on the vessels current ISM Code Document of Compliance. Have been inspected by an OCIMF member or CDI participant within the past 6 months and the report made available in the appropriate database. At least one acceptable discharge SIRE or CDI report is required within the past 12 months. Where applicable an acceptable EBIS (European Barge Inspection System) report within the last 12 months.

4.

5. Except on tugs/barges, the combined calendar time of the Master and Chief Officer must be at least 2 years with the Vessel Technical Operator (the Company). 6. Except on tugs/barges, the combined sea-going experience of the Master and Chief Officer on any type of tanker should be no less than 6 years. 7. Except on tugs/barges, the combined in-rank experience of the Master and Chief Officer must be at least 3 years actual sea-time on tankers. 8. For all Gas Ships, in addition to the above, the Master must have a minimum 1 year sea-time experience as a senior office on LNG and/or LPG and the Chief Officer must have a minimum 1 year sea-time experience as an Officer of the Watch on LNG and/of LPG.
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Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

Global Marine Vetting and Audit Criteria Summary


3.1

Issue Date: 02/13/2012 Revision: 8.0

Additional Criteria for Marine Movements involving Lightering (Vessel to Vessel Transfers):

1. The Vessel Technical Operator should meet the guidelines of OCIMF STS recommendations or equivalent standard. 2. Overall capability of vessel and staff experience will be considered. 3. The STS operation must be performed with the support of a Phillips 66 approved STS Service Provider company. 4. The Ship to be Lightered (STBLs) must be reviewed and accepted by the PSX Vetting Team if any PSX titled cargo is transferred. 5. STS operations do not include vessel bunkering, operations. Barges involved in Vessel to Vessel commercial cargo transfers require the following: 1. Vetting acceptance; 2. Confirmation that the vessel technical operator has lightering procedures in place; 3. A lightering representative may be required to attend as deemed necessary by the regional vetting team.
3.2 Time Charted Vessels (Ships)

Generally, to be accepted for greater than a six (6) month time charter requires a Phillips 66 sponsored SIRE report less than 6 months old; thereafter one Phillips 66 SIRE and one from any OCIMF submitting member is required annually for review. For any vessel currently engaged or being considered for time charter equal to or greater than 6 months the following must be in place: 1. One Phillips 66 sponsored SIRE report and one from any OCIMF submitting member is required annually for review. 2. A valid and accepted Phillips 66 TMSA verification audit report. If the charter exceeds a term contract of more than 24 months, an additional audit shall be conducted twice in five years.

3. A ship questionnaire (SQ) in www.SIS3.com with a date stamp not exceeding one month. 4. An updated Class Survey Status Report with a date stamp not exceeding one month. 5. The vessels age is not to exceed 20 years within the Time Charter. (A COA contract is not considered as a Time Charter.) 3.3 Technical Review (TR), Structural Criteria All Vessels

A detailed Technical Review (TR) by Phillips 66 Marine is required for vessels that have been subject to a conversion, major modification, vessels that were potentially damaged or have reached a nominal age (criteria as follows below). Conversions include, but are not limited to, double hull conversions or vessel designation changes (e.g. OBO to tanker). Major modifications include, but are not limited to, extending wheelhouses or repowering projects.

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2012 Revision: 8.0

Vessels of Any age Any vessel that has been converted (cargo to tanker, single hull to double hull, etc). Any vessel with reported Condition of Class or memorandum related to significant structural problems. Any instance where the vetting clearance process dictates the need. Any vessel that has had major modifications (extending wheelhouse, repowering, etc which will be determined on a case by case basis). Any tank vessel that does not have a double hull. Vessels >10 years All combination carriers over 10 years of age following the 2nd Special Survey. All US inland barges, generally between year 10 and 11 in age, (either classed or un-classed). Vessels >15 Years All ocean-going Tank Vessels (tank ships and tank barges) over 15 years of age following the vessels 3rd Special Survey. All ADN inland European barges over 15 years of age following the vessels 2nd Special Survey. Vessels >20 Years All ocean-going Gas Tankers (LPG/LNG Tank Vessels over 20 years of age). Vessels >30 Years All ocean going tugs (US) All inland tugs/towboats (US)

3.4

Newbuild Vessel Consideration

A new-build vessel being nominated on the maiden voyage may be evaluated on a case by case basis. The Vessel Technical Operator shall follow the Phillips 66 Marine new build review and acceptance process. This is available upon request from Phillips 66 Marine. 3.5 Compliance with Local and International Conventions and Regulations All Vessels

The Vessel Technical Operator must certify, through completion of the on-line SIS SQ Statement, compliance with all Local and International Conventions and Regulations. Ships trading internationally must have a valid Shipboard Oil Pollution Emergency Response Plan (SOPEP/SMPEP). In addition, ships trading to the United States must have a valid Vessel Response Plan (VRP) accepted in accordance with all applicable United States laws and regulations. The VRP and SOPEP may be incorporated into one document. 3.6 Protection and Indemnity (P&I) Club All Vessels

Vessels shall be insured with a member of the International Team of P&I Clubs. Clubs not included on this list may be reviewed and accepted on a case-by-case basis.
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Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2012 Revision: 8.0

Ships shall carry P & I insurance coverage (pollution and other third part liabilities) which shall be no less than the minimum required by the international/national authorities for the trading areas operated, including US waters. Ocean-Going Vessels shall: 1. have in place insurance cover for oil pollution for the greater of the maximum on offer through the International Group of P&I Clubs or 1 billion U.S. dollars; and 2. Carry hull & machinery insurance. Inland (US) Vessels shall: 1. have protection & indemnity insurance, including pollution liability insurance, procured from a P&I Club in the International Group of P&I clubs, WQIS, or another insurer(s) with a minimum rating by A.M. Best Company of A minus with a minimum of 100 million U.S. dollars per incident; and 2. Carry hull & machinery insurance.

4.0

VESSEL ACCEPTANCE REQUIREMENTS - U.S. FLAG BARGE, TUG, TOWBOAT (ONLY)

For US flag Tug/barges, vessel hull criteria are found within Section 5 of this document. Additionally, each U.S. flag Barge, Tug or Towboat being considered for a potential Marine Movement must meet the following criteria: 1. All barges must have an acceptable SIRE inspection report less than 12 months old available in the OCIMF SIRE system. The expectation is that all Time/Term Chartered Barges, Tugs and Towboats maintain a current SIRE Inspection Report. The SIRE Inspection Report may be considered valid for up to 12 months from the date of inspection. Non-time chartered tugs and towboats may be required to have a Sire inspection and/or be vetted by the Vetting Team to verify compliance with this criteria and process on a case by case basis. 2. Any double hull barge 15 years or older must have an acceptable thickness gauging/(UT) report available that is not more than 10 years old. 3. All marine tank barges, tugs, and towboats must be operated under a safety and/or quality management system structured and adhering to practices identified in Standards such as the ISM code if applicable, or, in the USA, the AWO Responsible Carrier Program (RCP) or a similarly PSX accepted program, depending on the region where the equipment is being operated. Certifications must be valid and current at all times during the vessel usage. 4. Inland barges, tugs, towboats, and self propelled barges may not be required to comply with International Conventions or be classed with a Classification Society. While a vessel operator may adopt such options, the absence of such does not preclude Phillips 66 entities from utilizing such equipment if found acceptable by the PSX Vetting Team. 5. If a barge is chartered by Phillips 66 and participates in the TAIP program, the vessel operator will comply with the USCG requirements associated with the Tank Barge Alternate Inspection Protocol. 6. Where a barge is classed, a recent Class Survey Report may be requested by the PSX Barge Vetting Team. 7. Full perimeter spill rails must be installed on all US barges, excluding liquefied flammable gas, liquid sulphur, and caustic/corrosive acids

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary


5.0
5.1

Issue Date: 02/13/2012 Revision: 8.0

DOUBLE HULL AND AGE CRITERIA - ALL VESSELS


Phillips 66 Double Hull Criteria for Ships and Barges

Tank Vessels used for PSX business will be double hulled.


5.2 Phillips 66 Age Criteria for Ships and Tugs/Barges

NonUS Flagged Ships


o o o

Tank vessels up to 20 years of age may be used for business. Gas carriers up to 30 years of age may be used for business. Combination carriers up to 15 years of age may be used for business.

US Flagged Ships
o

US Flagged tank vessels up to 35 years of age may be used for business.

US Barges
o o

Ocean going barges up to 35 years of age may be used for business. Inland barges up to 40 years of age may be used for business.

Non-US Barges
o o

Ocean going and coastal barges up to 20 years of age may be used for business. Inland barges up to 30 years of age may be used for business.

US Flagged Tug and Push Boats (Term and Spot/Voyage Charter)


o o

Tug and push boats of up to 40 years of age may be used for Term (Time Charter) business. Tug and push boats of up to 50 years of age may be used for Spot/Voyage Charter business.

CONDITION ASSESSEMNT PROGRAM - CAP (CAIP) REQUIREMENTS


Vessels at the following age criteria are required to maintain a minimum rating of CAP 2 (or CAIP where applicable in the US) or higher rating for both Hull and Cargo & Machinery Systems, as noted: Oil and Chemical Tankers Compliance Date 31st December, 2012 31st December, 2015 Size (DWT) >5000dwt >5000dwt Age >15 years >15 years CAP Requirement Minimum CAP 2 or Higher Hull Minimum CAP 2 or Higher Hull, Machinery & Cargo Systems

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary


Gas Carriers Compliance Date 31st January, 2012 Size any size Age >20 years Requirement

Issue Date: 02/13/2012 Revision: 8.0

Minimum CAP 2 or Higher Hull structure, Hull machinery, fittings & systems, Propulsion & Auxiliary Machinery and Cargo Containment

o o o o

o o

Oil and chemical tankers < 5000 dwt and older than 15 years of age may be enrolled in a Small Ship CAP or Condition Survey program for review. Combination carriers older than 10 years of age must be enrolled in a Phillips 66 accepted Condition Assessment Program. CAP certification shall be conducted by an acceptable Classification Society, and be less than 3 years old (from first survey or per the Report validity date). Phillips 66 will accept a CAP Certification conducted by a Classification Society that is a member or associate of the International Association of Classification Societies (IACS) at the time of vessel nomination. A one-time acceptance of another Class Society may be accepted by the Director of Vetting on a case-by-case basis. The Hull CAP Assessment report must include a fatigue analysis that has been carried out by the organization issuing the CAP declaration. Phillips 66 may accept a CAIP assessment in lieu of CAP conducted by a Classification Society and/or flag Administration for an acceptance of the vessel Director of Vetting on a case-by-case basis acceptable Technical Review (TR) results.

In the event that a vessel does not comply with the above mentioned CAP requirements, Director, Vetting/Audits approval is required in order to use the vessel for business. 5.2 Drug and Alcohol Policy

The Vessel Technical Operator shall certify that it has in effect a Drug and Alcohol Policy, complying with OCIMF Guidelines for the Control of Drugs and Alcohol Onboard Ship, unless not permitted by the Flag State. 5.3 Flag State / Nationality

While it is recognized that individual ships should not be overly burdened by their flag where; casualty or detention history documented by a Port State Authority results in a targeted flag designation by that Authority, this designation will be considered in the review process. Additionally, Phillips 66 can exclude certain flag States, if they have been found not to comply with Phillips 66 associated processes or criteria.

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2012 Revision: 8.0

Phillips 66 shall follow all US Regulations regarding trade with sanctioned countries and/or Restricted Parties. All vessels owned, technically managed or commercially operated by a company headquartered in, or flying flags of US Sanctioned countries or related to Restricted Parties, shall be rejected. 5.4 Acceptance and Rejection on Status Changes

Vessel acceptance as a result of the vetting process is integral to the successful conclusion of any fixture and is a continuing requirement thereafter. Vessel Vetting acceptance may become invalid with any change of ownership, classification society, P&I Club, technical or operational management, or due to significant technical or procedural changes on board the vessel, or defects that may be deemed to affect meeting the designated factors. Additionally, casualties and other incidents, or port state detentions, unsatisfactory reports from a marine terminal, and any other factors judged by Phillips 66 to be material which arise before, during or after the conclusion of a fixture that are deemed likely to impact negatively on Phillips 66 ability to use the vessel, then Phillips 66 reserves the right to withdraw acceptance in all such circumstances. However, where a vessel has changed ownership but otherwise the technical management shows a continuity including the vessel and shore technical management, the vessel can be considered for PSX service. 5.5 Conditions resulting in Vessel and/or Operators Being Placed On Hold or On Notice

Definitions: On Notice A warning given by Phillips 66 to the technical operator due to concern caused by negative operational or HSE trends or a one-off event; this is generally used to notify the technical operator and assure corrective and preventative actions are taken. Technical Hold A temporary rejection given by Phillips 66 of a vessel(s) and/or technical operator for continued use of their fleet, due to an extraordinary event or significant negative trends or cause. A technical hold is effective until corrective actions and/or answers acceptable to PSX Marine Vetting are received and deemed satisfactory by the Vetting Director. Examples where Vetting Technical Hold may apply: Office Audit of vessel technical operator - an unsatisfactory assessment by a Phillips 66 office Audit review team. In the event a vessel nominated for Phillips 66 service is deemed unacceptable or below standard on more than one consecutive occasion, a Phillips 66 SIRE inspection may be warranted. If the results of this inspection indicate in no improvement to the vessels status, the vessel may be placed on technical hold and will require a Phillips 66 re-inspection. However, the vessel may not be eligible for re-inspection until after 3 months from the date of original inspection. This period of time is necessary in order to allow the vessel operator and staff sufficient time to develop, implement and verify the effectiveness of corrective actions taken.

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary

Issue Date: 02/13/2012 Revision: 8.0

A vessel previously accepted for Phillips 66 service will be placed on Technical Hold in the event the vessel is deemed unseaworthy or a high risk to Phillips 66 prior to the commencement of service. The vessel will remain on Technical Hold until a satisfactory class report, causal analysis and corrective actions/lessons learned are received by PSX and deemed satisfactory. 5.6 Voyage Risk Assessment (Piracy/High Risk Transits)

Vessels planning to traverse areas subject to risk of piracy must have in place sufficient anti-piracy operational plans and countermeasures in accordance with current best management practices for piracy as per OCIMF Guidelines, flag State directives, and technical operators applicable insurance providers directives in order to mitigate the risk from piracy. Phillips 66 utilizes the BIMCO Automated Voyage Risk Assessment (AVRA) tool in order to ensure that individual voyage risks due to piracy threat are evaluated against the most detailed and timely information possible. Vessels traversing areas subject to piracy risk are expected to submit a current AVRA report, complete an AVRA information form or complete a detailed high risk assessment report for the vessels antipiracy practices/route and submit this for review by Phillips 66. Vessels with risk assessment scores or results above an acceptable level as determined by the Phillips 66 vetting team, may be either rejected by the Vetting Team for that voyage or the vessel technical operator may revise its available anti-piracy measures and update the AVRA/risk assessment to provide additional Best Management Practices/countermeasures in order to lower the risk assessment score to an acceptable level prior to entering areas subject to risk of piracy.

GLOBAL MARINE RISK MANAGEMENT/VETTING CONTACT INFORMATION

EMAIL
For ship vetting information, contact: For US barge and tug vetting information, contact: For SIRE Inspection requests, go to www.SIS3.com for Phillips 66 link, or contact: Vetting@P66.com Bargevetting@P66.com ShipInspection@p66.com

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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Global Marine Vetting and Audit Criteria Summary


MAILING ADDRESSES:
Phillips 66 Company (Corporate Headquarters Houston, Texas USA) 600 N. Dairy Ashford Houston, Texas 77079 USA

Issue Date: 02/13/2012 Revision: 8.0

Phillips 66 (London UK) Portman House 2 Portman Street London, England W1H 6DU

Phillips 66 International, Inc. (Singapore) One Temasek Avenue Millenia Tower #40-01

Singapore 039192

Information within this document is proprietary and confidential to (or work of) Phillips 66 Marine.

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