Guidelines for = application for=20 Acknowledgment of Compliance (AoC) for mobile facilities intended for = use in the=20 petroleum activities on the Norwegian Continental Shelf (Unofficial=20 translation),

issued by the Petroleum = Safety=20 Authority Norway (PSA) 1 July 2006.

CONTENTS

1 =20 Introduction. 1

2 =20 General 1

3 = The=20 purpose of the AoC arrangement 2

4 = Rights and=20 duties in connection with the conduct of petroleum activities. 2

5 =20 Application procedure. 3

6 = Contents=20 of the application. 3

7 = The=20 authorities' handling of applications. 6

1 =20 Introduction

An AoC is a decision made = by the PSA=20 to the effect that the technical condition of a mobile facility and the=20 applicant's organisation and management system are considered to be in=20 compliance with relevant requirements in Norwegian shelf=20 legislation.

A voluntary arrangement = with=20 Acknowledgment of Compliance (AoC) for mobile drilling facilities was=20 implemented 1 August 2000. The arrangement was evaluated in 2002 and = made=20 mandatory from 1 January 2004, with a transition period until 1 January=20 2005.

From 1 July 2006 the = arrangement was=20 expanded to comprise mobile facilities that are registered in a national = ship=92s=20 register and that are used for drilling, production, storage and = offloading=20 (FPDSOs and FPSOs), well intervention and living quarters=20 (flotels).

The arrangement is pursuant = to the=20 Regulations relating to Material and Information in the Petroleum = Activities=20 (the Information Duty Regulations) section 6 first paragraph letter m, = and=20 described in the guidelines to section 17 in the Regulations Relating to = Health,=20 Environment and Safety in the Petroleum Activities (the Framework=20 Regulations).

2 =20 General

The applicant may be the = owner of a=20 mobile facility, or anybody else who will be in charge of the daily = operations=20 of such a facility when it takes part in petroleum activities subject to = Norwegian shelf legislation.

An applicant may be any = legal body=20 that has entered into or is planning to enter into an agreement with an=20 operating company on conduct of activities in areas covered by Norwegian = shelf=20 legislation. Such applicant may be the owner or any other organisation = or=20 person, e.g. owner of the facility, operating enterprise or contractor, = who,=20 according to agreement, will be in charge of the operation of the mobile = facility on behalf of the owner.

An AoC is of importance as = a basis of=20 documentation for the authorities when they take the matter up for = consideration=20 later on. An AoC is of special importance as a basis of documentation = for that=20 part of an application for consent that relates specifically to the=20 facility.

An AoC must be applied for = in=20 connection with a concrete application for consent to certain petroleum=20 activities which implies the use of a mobile facility, unless an AoC has = already=20 been obtained. Such application will consist of two parts: One part = which=20 encompasses the location and activity specific matters, and one part = which=20 encompasses the facility specific matters, i.e. technical condition and = the=20 applicant's organisation and management system.

An AoC may also be applied = for on an=20 independent basis.

It may be relevant with a = joint AoC=20 for a facility if the facility is to be used for various types of = activities,=20 and each activity requires an individual AoC. A drilling facility also = servicing=20 as a flotel, is an example of this.

=20

3 =20 The purpose of the AoC arrangement

The purpose of the AoC = arrangement is=20 to contribute to improved predictability for the actors of the industry, = in=20 matters concerning a mobile facility=92s suitability for activities on = the=20 Norwegian Continental Shelf (NCS) when measured against the legal = requirements=20 to health, environment, safety and emergency preparedness. Furthermore, = the=20 arrangement shall constitute a basis for more efficient processes, i.e.=20 applicant, operator and authority processes related to the application = for=20 consent to petroleum activities on the NCS.

An application for an AoC = is a=20 request for the authorities' decision, related to a specific mobile = facility=92s=20 technical condition, the applicant's organisation and management system, = measured against the legal requirements that apply to the use of such a = facility=20 on the NCS.

An AoC is granted on basis = of the=20 authorities' assessment of the condition, measured against the legal=20 requirements that apply to use of mobile facilities on the NCS at the = time of=20 the acknowledgement or decision. Use of such a decision in connection = with a=20 later application for consent to put the facility into service, must be = seen in=20 the context of changes in the legal requirements or the facility=92s = technical=20 condition and the applicant's organisation and management system, after = the=20 decision was made.

An AoC encompasses = technical=20 conditions, relevant parts of the applicant's management system, = analyses=20 carried out, maintenance programme and plans for=20 upgrading.

An AoC is given on basis of = the=20 authorities' follow-up of the applicant and information that the = applicant has=20 provided concerning the facility and organisational=20 matters.

An AoC does not imply any = right to=20 commence activities on the NCS. An AoC shall, however, as mentioned in = chapter=20 2, form part of the documentation basis related to application for = consent to=20 petroleum activities on the NCS.

&nbs= p; =20

4 =20 Rights and duties in connection with the conduct of petroleum=20 activities

All actors in the petroleum = activities have a duty to comply with the legislation within their area = of=20 responsibility and to establish a most adequate management system in = order to=20 achieve this in a controlled and systematic = manner.

Within the requirements = laid down in=20 relevant legislation, one may organise the enterprise in the manner one = finds=20 suitable. Tasks can be delegated to other actors, provided that those = doing this=20 have ensured that these actors are competent and fully understand the = extent of=20 the task and applicable requirements. Thereafter, those delegating these = tasks=20 shall conduct audits to ensure that the actors or suppliers of such = services=20 conduct the tasks in compliance with the given requirements. An = applicant for an=20 AoC that does not have any obligation towards this formal system at the = time of=20 application, may similarly assume such sharing of tasks and = responsibilities. If=20 this is the case, the applicant becomes

- = supplier of=20 premises with regard to defining what type of petroleum activities is = intended=20 to be conducted by the facility, and thereby which products that need be = generated in order to carry out the activities within the framework of = an=20 AoC,

- = responsible=20 for the further following up of the AoC.

In case the applicant = wishes to=20 undertake an enterprise later on, thereby assuming an independent future = responsibility, certain preconditions need to be in place in order to be = capable=20 to manage, lead and conduct this operation (enterprise) within the = framework=20 laid down by acts and regulations. Furthermore, the applicant shall have = to=20 adhere to the agreement entered into with the operator. Essential = preconditions=20 are the following:

- = the=20 applicant must realistically be capable of conducting the=20 task,

- = the=20 applicant must have a most adequate management system for his=20 activities,

- = the=20 applicant must have at his disposal the required resources and = competence by=20 means of his =20 own or contracted personnel and equipment,

- = sufficient=20 and competent personnel must be available at all levels and used = throughout all=20 phases of the task,

- = operational=20 responsibility, including the right or duty to undertake necessary = technical=20 upgrading of the facility, shall by clearly and unambiguously described. = An AoC=20 implies a continuous duty to follow the maintenance programmes. This = also=20 applies if the facility accepts and undertakes operations on foreign = continental=20 shelves or is laid up.

=20

5 =20 Application procedure

The applicant should = contact the PSA=20 in ample time. In consultation with the NMD the PSA will agree on = further work,=20 contact and time plans.

6 =20 Contents of the application

To be able to start = handling an AoC=20 application, the applicant must submit a summary of what has been done = until now=20 to qualify the facility in question, account for the most essential = decisions=20 that have been made to cater for health, environment, safety and = emergency=20 preparedness and explicitly describe the system that has been = established to=20 maintain the condition and the systems the AoC is based on, after said=20 acknowledgement has been granted.

The application may be = structured as=20 follows:

A =20 Introduction

A description of the = subject for=20 application, with reference to the current = guidelines.

B Purpose and=20 plans

Including

- = name of the=20 facility,

- = purpose of=20 the facility,

- =20 prerequisites for use,

- = general=20 description of the facility,

- = overview of=20 planned activities and milestones,

- = plan for=20 maintenance of the condition described.

C Management=20 system

Including description=20 of

- = relevant=20 parts of the applicant's basis organisation and organisational matters = during=20 normal operation and in emergency situations,

- = management=20 and control system that have been established in order to manage the = activity=20 with respect to the facility, possibly by means of references to = relevant=20 manuals, handbooks, etc.,

- = governing=20 documents for the facility,

- = quality=20 assurance requirements that the applicant has laid down for possible = contractors=20 and sub-vendors (including third party),

- = arrangement=20 or system for work force participation.

A statement from the = organisations of=20 the employees or their representatives regarding the application, must = be=20 attached to the application for an AoC.

If an organised safety = service=20 (working environment committee and safety delegates) has been = established, this=20 should be used. On a facility where such safety service has not been=20 established, a statement from the applicant's safety service on another = of the=20 applicant's facilities, the applicant's workers' representative or = relevant=20 organisations of the employees, may be attached to the=20 application.

The industry, by means of a = co-operation between the Norwegian Shipowners' Association (NR), the = Norwegian=20 Confederation of Trade Unions (LO/NOPEF) and the Union for Workers in = the Energy=20 Sector (SAFE), may offer consultation and support in preparing such a = statement=20 to new applicants that have not established a safety service,=20

D =20 Assessments

Including

- = safety and=20 working environment objectives, as well as the acceptance criteria for = risks to=20 people, environmental and material values,

- = the most=20 important presumptions for the defined = acceptance=20 criteria to be met,

- = relevant=20 assessments on basis of results from conducted risk analyses, as well as = related=20 decisions with relevance for safety and working environment,=20

- = safety and=20 working environment challenges connected to the use of the facility and = measures=20 (probability reducing and consequence reducing measures, including = emergency=20 preparedness measures of both technical, operational and organisational = nature)=20 that are to be implemented in order to meet these.

E Technical=20 conditions

A statement saying that all = technical=20 conditions of relevance to safety and working environment have been = assessed and=20 taken a stand on.

F =20 Non-conformities

A description of identified = non-conformities related to requirements in acts and regulations that = apply to=20 conduct of petroleum activities at the time of the application, = including=20 non-conformities related to maritime legislation that are relevant to = the safe=20 conduct of the petroleum activities, and possible planned handling of = these. The=20 application shall contain an assessment of the non-conformities=92 = relevance to=20 safety and working environment, a description of possible compensating = measures=20 and deadlines for their implementation.

In case the facility has = been used on=20 the NCS previously, and exemptions have been granted then are considered = relevant to the actual AoC application, too, this shall be=20 clarified.

G The = applicant's own=20 supervision

Including description=20 of

- = conclusions=20 from the applicant's internal and external audit and verification = activities=20 conducted = prior=20 to the application,

- = activities=20 that are to be carried out in order to verify that health, environment, = safety,=20 and emergency preparedness requirements are maintained during the = conduct of the=20 scheduled activities with the facility,

- = objectives=20 and priorities that form the basis of the applicant's internal and = external=20 supervisory activities,

- = principles=20 of independence laid down as basis for the applicant's planned internal = and=20 external supervisory activities.

H Document=20 references

Including

- = list of=20 documents that are used for managing the activities intended to be = carried out=20 with the facility. In his governing documents, the applicant may make = use of the=20 documents and the documentation systems that have been established = already by=20 the various contractors and vendors, provided that these are verified = and=20 accepted by the applicant.

As a recognised norm for=20 qualification and documentation of a mobile facility in connection with = the=20 application for an AoC, reference is made to OLF/NR "Handbook for = application=20 for Acknowledgment of Compliance (AoC)", rev. 03, dated 1.7.2006, or = later=20 revisions as may be the case. Furthermore, reference is made to OLF/NR=20 =93Guidelines for acceptance and operation of mobile facilities holding, = or in the=20 application process for, an Acknowledgement of Compliance=20 (AoC)=94.

Reference is also made to = the=20 International Association of Drilling Contractors (IADC) =93North West = European=20 HSE Case Guidelines for MODUs=94, rev. 01, dated February 2003, or later = revisions=20 as may be the case.

7 =20 The authorities' handling of = applications

Applications will, = depending on their=20 contents, be dealt with by the PSA and other relevant authorities and=20 institutions. The PSA will, in consultation with other authorities that = the=20 authority co-operates with in connection with AoC, decide the extent of = the=20 consideration in each case. The PSA or authorities that the authority=20 co-operates with in connection with AoC, may also carry out verification = of the=20 documentation, e.g. by audits etc.

The PSA and the NMD have = entered into=20 a co-operation agreement in connection with the AoC arrangement. The = current=20 revision of this agreement will be available in the PSA on request from=20 interested actors, companies, organisations and = others.

An application for AoC will = normally=20 be handled within three months in the case of facilities that are going = to=20 conduct drilling = activities, under=20 the condition that the contents and quality of the application are as = expected.=20 In the case of facilities that are going to conduct other types of = activities,=20 handling may take longer. With regard to applications for an expanded or = joint=20 AoC, where the same facility is to be used for a new type of activity = that=20 requires an AoC, cf. chapter 2 above, handling of applications may take = less=20 time.

The above-mentioned = expectation=20 implies that the applicant, inter alia, has carried out a fully = satisfactory=20 comparison against relevant requirements in the acts and regulations, = with=20 relevant analyses and verifications. A complete list of = non-conformities, with=20 references to regulatory requirements, shall be attached to the=20 application.

The PSA grants an AoC when the facility is = ready and=20 commissioned as such, and when the technical condition and the = applicant=92s=20 organisation and management system are considered to be in compliance = with=20 relevant requirements in Norwegian shelf legislation. The work of the=20 authorities in connection with the AoC will be charged the applicant = according=20 to the same fees per hour/day (24 hours) that at any time appear from = the=20 regulations relating to refunding of expenses in connection with = regulatory=20 supervision of safety, working environment and resource management in = the=20 petroleum activities, laid down by Royal Decree 12 June=20 1998.

An AoC will be given on basis of the = information=20 provided by the applicant in his application in order to document = compliance=20 with the basis for the acknowledgement. If given conditions or = presumptions are=20 not satisfied or complied with, the basis for the AoC no longer applies. =