Integrity is a “cradle to crave” concept.

We are coming close to year end and good to hear about new initiatives.

Before summarizing my experiences into list of initiatives I would like to share my opinion on the
concept of value creation. I need to ask you a question on value creation: Is it going to be “Corporate
target” or limited to “Improvement of P&E performance”. The former extends from project down to
operation whereas the latter is focused on MCI department as project delivery division.

I believe that value creation in MCI is a bit different from other disciplines. You may agree that we don’t
have that much complexity or difficulty during project execution phases like fabrication, installation and
start up as other disciplines usually have. Their initiatives are usually targeted to tackle challenges during
abovementioned phases. However, looking through the eyes of an “integrity engineer” MCI needs to
focus more at keeping cost of ownership low while building a more reliable, operable and safe facility
for whole its life cycle. This factor is distinguishing us from other functional disciplines i.e. we are
inadvertently involved even in operation after hand over.

To shed more light on my mindset I have attached a list for your attention. Recently “MCI engineers”
from different business units of Petronas attended an event organized by Upstream Operational
Excellence (OE). The attachment is the outcome of this 2 day brainstorming workshop and it is listing the
challenges identified by the participants. As you can see some items in the list are related to P&E MCI
performance. One may challenge each of these items, but at least it is an indicative of how we are
assessed by our own Petronas stakeholders. The fact that stakeholders are concerned about our design
(whether we agree with them or not) is in fact emphasizing the need for “an integrated approach” or
“corporate approach” towards MCI duties. They are entitled to criticize us and we are eligible to
question them too.

As “P&E MCI engineer” I am afraid that lack of the above holistic “life cycle” mindset will influence the
“value” of our contribution into “value creation”.

The following examples are among the topics that I can initially list as our challenges and need
addressing. It can be seen that most of them are somehow related to lack of “life cycle” approach:

 Execute essential step in any RBI study: Review, Feedback and improve RBI assessment are
carried out for a few nominated projects. Are we aware of status of implementing and updating
CMP or RBI for these projects? How good has the RBI study during project phase been in act?
How far is it implemented? How helpful CMP has been? Do we know that how their common
inspection and monitoring practices are? How effective are their inspection? If you ask me I am
not supporting the way we are doing RBI here.
 An investigation on how helpful and representative corrosion modeling has been in Carigali
projects. Our previous corrosion modeling studies still lack the support of field validation i.e
requires more engagement with operation. How successful have the models been in predicting
the corrosion behavior of the system? How representive are they? Do we need to define
correction factors to be applied to our model outputs? Or straightforward accept whatever is
coming out of the software?
 Establish a centralized database for material performance and failure history in upstream. How
are we incorporating failure results in our new designs? How structured is our MCI lessons

Internal
 learnt process? How can it guarantee that a lesson is not re-learnt? It all depends how much we
are informed/involved in these lessons by operator.
 Develop a corporate corrosion failure investigation methodology or protocol. Any corporate
failure investigation methodology available which we can rely on its results? Is there a list of
qualified reference FA lab? How reliable are the FA and root cause analysis (RCA) results? Can
we establish our new designs based on their output? E.g. there have been several failure cases
in the recent years in our transportation pipeline network attributed to MIC as one of the main
deteriorating phenomena. Are the measures taken afterwards and during design suffice the
prevention of MIC? Have they been effective? Up-rooted problem? OR it has been oxygen
ingress to blame rather than bugs and MIC? Or it is a combination?
 Develop a central database for qualified generic corrosion inhibitors and their performance
records in field. Chemicals are massively consumed in our daily production. Yet nobody I met
who is aware of any systematic CI field performance verification by reviewing corrosion
monitoring and inspection findings. Are these injections still required based on history of
inspection? Is there any “Inspection Data Management System” or “corporate failure memory”
in place to support this? (see Amulet in the attachment)
 Petronas Carigali MCI teams, both P&E and OD should have consent on standard methodologies
for qualification of chemicals. Carigali should have a short list of pre-qualified CIs for any given
type of pipeline and carry our additional testing only for specific cases for which actual fluid
samples are available. This will avoid duplication of tests for similar cases.
 Job demarcation for MCI department during project review stages. There still appears to be
some confusion among our MCI engineers with regards to job demarcations (recent case was an
onshore CP system design which had been totally overlooked through all PPMS stages). We
need to have a complete list of duties and responsibilities of MCI team in the line department.
 Define relationships and precedence of all Carigali CCDs. Corrosion Control Documents (CCD) -
Our QA system should define relations between the several documents generated during
project or available as standards and practices. There should be a hierarchy or matrix defining
the precedence and importance of each corrosion related document such as CIMG, MCI related
PTS standards, CMG,CSP, PRBI software, PTS RBI, Project CDBM, Project CMP, PPMS review
nodes, MOCs, Lessons learnt and few other. This QA system should also describe job
descriptions, KPI in different engineering and construction phases, internal procedures, auditing,
etc.

I guess, due to the current oil price level and economic situation, the initiatives for the coming year will
be guided more towards cost savings. While appreciating this strategy I do not recommend taking
actions which jeopardize “life cycle” integrity of the assets which has been the case in the past. We have
come across the cases that tight schedule has damaged the quality and I hope that now cost savings
initiatives are not repeating this in another way.

Having looked at last couple of years’ MCI initiatives I don’t score it a list which we deserve. Some of
them are not at all addressing our problem, some have no useful application and some are not at all
needed. Almost none of them have aimed at the above “corporate approach” target.

Dear Bosses, in line with what went above, I recommend to have a mechanism by which Carigali P&E
MCI staff can be evaluated in terms of productivity and KPI as to addressing real “integrity” problems yet
being able to lower the costs of construction and operation. I support any joint activity with our

Internal
operational departments to handle their current problems or to assist them improve their performance.
My message is to have some part of the initiatives look after this mutual collaboration.

The last but not the least is that we need to be more integrated within MCI department. That will help
ensure “life cycle integrity” of our assets. Integrity department needs to have more integrity. We are not
integrated enough. We are not playing in an orchestra!

Internal