How to Prepare for an Oil & Gas Audit?
We know there’s lots to do come audit season. Here are some helpful tips to prepare for an audit, whether internal or external! BONUS! We’ve included specifics on the signage requirements for you.
What is an Audit?
It’s an official inspection performed by an auditor to ensure your business is adhering to health, safety and environmental standards. An independent body typically performs the audit.
Different Types of Audits
1. Internal Audit: Your company’s HSE Department drives these to ensure your business is compliant. They could be executed by your field staff, operators, or summer students. Depending on company size you may have local and regional evaluations.
- Your company determines how much notice if any is given.
- Normally performed, quarterly, and annually.
- When a deficiency is identified, responsible parties are notified in order to rectify the issue in a timely manner.
2. External Audit: Performed by an outside party of Certified Oilfield Auditors. Depending on the province you belong to you can expect a visit from Alberta Energy Regulator (AER) BC Oil & Gas Commission (BCOGC), Saskatchewan Ministry of Economy (EPAP/ECON) etc.
- No notice is required.
- Normally performed in the spring/summer months.
- Inspection areas: operating wells, production, and processing facilities, and pipelines.
- If a deficiency is discovered a company may be warned or fined, or the operation may even be shut down.
What do auditors look for?
According to AER, “Inspection activities are prioritized based on the weighting of three key criteria, referred to as OSI (for operator, sensitivity and inherent risk):
- operator (licensee/contractor) history
- sensitivity of the location
- inherent risk of the project or operation.”
Inspection and audit areas to consider:
- Housekeeping: Is it clean? Is it safe? Is it orderly?
- Staining: Oil spills, fluid spills, and drips
- Flaring: Schedules and information
- Safety & Signs: Compliance, fading, and missing signage (see below for more details)
- Audit History: Be sure to review historical audit reports, and past action plans to have better insight into what was previously discussed.
*Be sure to check with your internal auditor or safety team for a full checklist!
Ensure you have these signs in place before an audit:
1. Pipeline signs
- Emergency number
- Name or logo of the licensee or operator
- Product name
- Note: Beyond the above three requirements, each provincial governing body has their own specific pipeline regulations. AER, for example, discourages the use of sweet/sour and extra product descriptors besides oil, gas, water, and flammable liquids
2. Wellsite signs
- Sweet/sour indicator
- Emergency number
- Name or logo of licensee or operator
- LSD as laid out on license
- Note: Beyond the above four requirements, each provincial governing body has their own specific well site regulations. ECON, for example, requires both indicators when a site is sour.
- Access to signs: if they are in addition to required entrance/wellhead/facility, they are considered directional signs and do not need to include an emergency phone number or sweet/sour indicator
- WHMIS labeling: tanks, barrels, containers.
- TDGs: required on trucks carrying regulated products on site, optional on truck loading signs.
- Truck loading signs: truck loading signs are required by Transport Canada.
- Pipe marking tape: flow direction is required.
- Product label: product can be identified on the flow direction tape, or using a colour coding system with a corresponding colour code chart. These systems are not regulated.
Need oil & gas signage? Our team can advise on the compliant oilfield products you need; we’ve got you covered. Let the experts provide you with an overnight quote, just drop us a line.
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