T. Sp. Emergency Power Gen. Pkg.

Company Identification

3201.11.DBPF.10010Contractor Identification

4600016138/39/40 Rev. index.Sheet of Sheets

21 / 25

Validity StatusRev. No.

EX-DE02

Projects Development, Engineering Division

SIMULTANEOUS WATER AND NATURAL

GAS DISPOSAL (SWAN) PROJECT

VARIATION ORDER TO EOC WATER

REINJECTION PROJECT.PROCUREMENT PROCEDUREREVISION RECORD

0223 Oct 14Approved for Construction

0129 Sep 14Issued for ApprovalComment Incorporated

0002 Sep 14Issued for ReviewFirst Issue

Rev.DateReason for RevisionShort Description of Changes

TABLE OF CONTENTS

41.0 GENERAL

61.1 SCOPE

Error! Bookmark not defined.1.2 ABBREVIATIONS

71.3 REFERENCE

82.0 EVALUATION AND CONTROL

83.0 PURCHASING PROCESS

104.0 Expediting Process

155.0 PURCHASE PLANNING

156.0 USE AND MANAGEMENT OF SUPPLIERS

167.0 ISSUANCE AND DISTRIBUTION

178.0 ISSUANCE AND DISTRIBUTION OF ORDERS

189.0 Material Control

189.1 Tracking of Materials

1910.0 Materials Receiving (Local Purchased)

2011.0 Forms

1.0ABBREVIATIONS COMPANY

NAOC

NAOC Nigeria Agip Oil Company

CONTRACTOR

B+G&S Nigeria Limted

MRR

Material Receiving Report

MRF

Material Request Form

PO

Purchase Order

RFQ

Request for Quotation

RFP

Request for Procurement

MDS

Material Data Sheet

BEF

Bid Evaluation FormFEED

Front End Engineering Design

LPO

Local Purchase Order

RGIR

Receipt of Goods Inspection ReportPM

Project Manager

PD

Project Director2.0INTRODUCTIONThe Nigerian Agip Oil Company intends to install an ejector for the simultaneous disposal of produced water and low pressure gas which would otherwise be flared. The source of the low pressure gas shall be from the gas outlet line of the LP-3 separator currently installed in Ebocha Oil Center. The produced water to be utilized for this project shall be sourced from the produced water reinjection package.EPC Contractor shall ensure throughout detailed engineering that all hazards have been identified, risks assessed and that appropriate measures to protect personnel, facilities and the environment have been incorporated in the design, by means of activities such as HAZID, HAZOP, and Constructability Review etc.Contractor shall perform all activities including all Project management, detailed design engineering, procurement and supply of materials including line pipes, fabrication, supply, transport, construction activities, installation, restoration, testing and pre-commissioning activities required to achieve the successful completion of the Work.2.1SCOPE OF WORKContractor scope of work for EPC of Simultaneous Water And Natural Gas Disposal (SWAN)

Project shall include but not limited to procurement and supply of materials including valves, fabrication, inspection and testing, transportation, construction and installation activities required to achieve the successful completion of the project. In procuring these items: Piping Fittings, Bolts and Nuts, Pipe Supports, Fittings, Valves Gasket.

COMPANY shall prepare the Project procurement Plan Procedures, which outline guidelines for Procedures and Schedules to be implemented by all Contractor / sub-contractor and applicable Suppliers for carrying out all procurement as contained in the Procurement Packages Dossier (All Packages) and related services; however Contractor Sub-Contractor shall purchase within their procedural requirements through their nominated Vendors/suppliers. The Procurement Plan Procedure shall be prepared by CONTRACTOR Project Engineer and the Procurement Officer. It shall be reviewed by the Project Manager (PM) and approved by the Project Director (PD).COMPANY / CONTRACTOR shall ensure the following standards and specifications are met:

3201.11.DLST.14127- Technical Specification for Valves.

3201.11.DLST.14129 - Technical Specification for Flanges, Anchor Flanges and

Gaskets and Bolting.3.0REFERENCE

3201.11.DGSP.10053 - QAQC Plan. 3201.10.BGRV.10701- Scope of Work. 3201.11.DLST.14127- Technical Specification for Valves.

3201.11.DLST.14129 - Technical Specification for Flanges, Anchor Flanges and

Gaskets and Bolting4.0EVALUATION AND CONTROL

The assessment and qualification of Vendors & suppliers shall be carried out in accordance with the Contract and the CONTRACTOR procedure for managing vendors and suppliers in the case of project materials for permanent structure, CONTRACTOR shall solicit bids from Companys approved Suppliers list in the approved Vendor List. The Contractor shall ensure that Vendor and suppliers shall adopt and implement all inspection and Test plans in accordance with companys standard in all their activities on the project. No deviation from the vendor/Supplier list shall be accepted without prior approval from Company, if the Vendor/Supplier has been assessed against the appropriate Quality System standards and approved by a third Party accredited national body, the Vendors/Supplier shall be requested to return a copy of their current approval certificate and Quality Manual.

If the vendor/Supplier does not have an approved certificate for their Quality System but does have a Quality Manual, the Vendor/Supplier shall be requested to return a current copy of the Quality Manual, (unless CONTRACTOR Party is already in possession of the current issue) together with a list of any government, national or major industrial bodies that have formally approved Quality System in a recognized Quality Standard and any certificate showing QC / product approvals, such as ASME, etc.

In addition, CONTRACTOR shall have firm control over its Vendors and suppliers and shall cause them to adopt and implement all Inspection Test Plans relevant to the vendors/Suppliers specific activities on the project.5.0 PURCHASING PROCESS5.1 Purchased Goods / Material quality Requirements

CONTRACTORs purchasing process is tailored to ensure that goods and materials purchased for project use are in accordance with the requirements of the contract. At each stage of the purchasing process and depending on the overall effect of the decisions on the final product, Company representative will be invited to agree with the decisions to complete the stage and move to the next.5.2 Purchasing Process Description

A comprehensive series of corporate Procurement Management Procedures and Work Practices exist to satisfy the project execution methodology whilst providing a sound management basis at all times.

The Procedures and Work Practices are formalised in manuals for each main discipline group and provide a clear and positive indication of the controls employed in the normal day-to-day execution of the procurement management activities. Documentation is of a formalised nature and uses standardised formats (e.g. Proposal Requests, Proposal Status Reports, Proposal Summaries, Purchase Orders, Order Variations and Amendments, Cost Allocation, Expediting Requests and Reports, Inspection Requests and Reports, overall material status reporting, document transmittals, etc.). These Procedures and Practices forms the basis of the project specific documents and forms that will be produced to identify and incorporate the unique requirements of Company Project specific. General Purchase Conditions and Instructions to Bidders are prepared by the project team members in consultation with Department Heads, which also incorporate the Company requirements regarding documentation, inspection, commissioning assistance, warranty and spares. These are included in the RFP, which is sent to the vendors for submitting a quotation.

Technical questionnaires are sent to the vendors by the Procurement department and a Technical Bid Analysis is prepared, based on these, purchase orders are placed by procurement manager. Preference is given to vendors with proven track record or in the vendors list issued by Company Quality Control. Engineers from CONTRACTOR and Vendors also firm up the detailed quality control plan (witness, hold and review stages). Items procured from within Nigeria are inspected by CONTRACTORS QA department. However, for majority of other imported items, external inspection agencies are appointed to work with CONTRACTOR Internal Quality Management team to ensure that all purchase specifications are complied with. Only approved & certified TPI will be appointed for third party inspection.

The import department of CONTRACTOR handles all commercial matters related to the imports such as opening of letters of credit, payment to suppliers, etc. The procurement Officer keeps in touch with the import department to coordinate these activities. The procurement officer has a single point responsibility for all the items purchased. He closely monitors all the activities related to the procurement via floating enquiries, locating the right vendor, technical evaluation, commercial negotiations, purchase specification approval, drawing approval, expediting, inspection calls to external inspection agencies and Companys inspectors, sea freight, customs clearance and local transport; and closely liaises with all other departments and consultants to remove any possible bottlenecks in the timely delivery of goods.

6.0Expediting ProcessAll RFPs are issued by the Procurement department where technical bids from vendors/suppliers are also received and analysed/ evaluated. The technical discussions with the vendors are held with the Procurement Officer and or Manager, and the commercial part of all procurement is handled by the procurement team. Priorities will be given to Vendors/Suppliers who have agents in Nigeria. The scope of procurement covers all permanent materials and equipment required by the project, excluding Company furnished materials.

The scope of procurement and deliveries are maintained by employing methods used by international Contractors for such jobs, such as: Preparation for start of engineering prior to award, to avoid delay after contract award; Making commitments for critical materials Using materials from stock yards at higher cost, if necessary; Air-freighting items when necessary,

Working round-the-clock, including weekends and holidays. Monitor / expedite deliveries by vendors and deputing expeditors at each of such work centers.

This approach calls for operating flexibility and de-centralized decision making, which CONTRACTOR shall adopt for the project. Familiarity with international procurement procedures is essential. Refer to flow chart below for a typical expedited purchasing processes developed by CONTRACTOR.

YesNo

No

Yes

No

Yes

No

Yes Yes No

NoNo

No

yes

yes

yes

7.0 PURCHASE PLANNING

The Procurement Department and the Project Management and the Quality Department is responsible, for planning and monitoring of purchases. The supply system must be put in place to make it possible for availability of products and reliable suppliers and ensure the fulfillment of the requirements ofs service. Supplies planning

When planning supply, quality management and examination of product, the following topics should be discussed: Development of supply Requirements to be applied to various types of supply Planning of supply Qualification of new suppliers of products / services Renewal of the qualification of suppliers

Information required for planning and monitoring of purchases

The need for new products / services and the planning of purchases are regulated by Contract/QA dept. through: Market research Processing and analysis of data related to customers Analysis of non-compliance

8.0 USE AND MANAGEMENT OF SUPPLIERS

Suppliers to be used

The Vendors/Suppliers to be used are those indicated in the Companys approved Vendors list. The use of new Vendors/Suppliers shall be in accordance with process of evaluation, qualification and approval

Documents governing the relationship of supply

The documents governing the relationship of supply are: Specific orders Contracts Letters of intent

Purchase of goods or services

Procurement / Quality dept is responsible for defining requirements, terms and conditions contents to be applied in the supply of products and services. When it may be necessary to use a new supplier, the name must be reported to Quality dept. with all the information necessary for its qualification.

9.0ISSUANCE AND DISTRIBUTION

Issuance of RFP (Request for Proposal)

The purchase request is issued in written form by the Procurement officer and must indicate:

The type of goods or services The quality requirements to which must respond The quantity Delivery time

Order Issue The purchase order shall be signed after the Company and Contractor have agreed on the RFQ before sending to suppliers/vendors. 10.0ISSUANCE AND DISTRIBUTION OF ORDERS

The purchase order must be signed by Project Director, Project Manager and the Procurement Manager or persons designated by them before sending to suppliers. Contents of purchase orders

The order must necessarily include the following: Purchase order number and date of order Sender Job number (optional) The recipient: Name, Name of Supplier (optional address and phone) Name, of the person to whom to refer (i.e. attention of Mr xxx ... in case of prior agreements) The object (material or description of service required) Quantity and product number (if any) Precise description (for catalog products copy description from the catalog itself) Price (from list or catalog, or from agreed offer) Any discounts or special conditions agreed In the case of an offer by telephone, return the phrase "as in telephone talks with your Mr. xxxxxx ... .. the price of ... .... (list conditions agreed). Time of delivery and payment Mode of transport and in charge of whom ("transport by courier" ... .. "Port assigned" or "free port", etc..) OBLIGATORY signature of Project Director, Project Manager and the Procurement Manager. Order transmission

Purchase orders are made in written form and sent to suppliers by mail, by courier or fax. Any purchase orders by telephone, are always confirmed in writing (except for particular circumstances and urgent need) and transmitted to suppliers in the above rules, or by written order confirmation of the supplier. Order Confirmation by suppliers

In the case where suppliers have a continuous relationship, it is considered that the confirmation of acceptance of an order is implied. In other cases, after a certain time without having received confirmation, PD/PM will have to activate and obtain it.

This approach calls for operating flexibility and de-centralized decision making, which CONTRACTOR is equipped with, as a professionally managed company. It also calls for familiarity with international procurement procedures. Purchasing Organization

Refer to Project Organizational Charts in the Project Execution Plan 3208.20.GBPG.00001 as attachment 111.0 Material Control

11.1 Tracking of Materials

A material control chart (a Microsoft work sheet program) is prepared which contains all the necessary information about the procurement of goods from Purchase Order data covering through the period of shipment and arrival date. This work sheet is available in Contractors created Dropbox account and is periodically updated.

Recording of receipts for goods

Receive and inspect goods for damage during transport and complete the Good reciept Inspection Report (GRIR). This GRIR is transmitted to procurement specialists for action based on findings, if required.

Custom Clearance

In coordination with CONTRACTOR team, only approved companies who are based in Nigeria shall handle all customs clearance and forwarding.

Traceability of goods upon receipt

The traceability of goods upon receipt is followed as per stores procedures for receipt and issue. Storage of goods

Adequate space will be provided at the port & site facilities to store goods in line with Manufacturers recommendations

Stock/inventory control

The stock and inventory are controlled as per stores procedure for receipt, storage & issue.

Inspection and expediting

Inspection shall be carried out as per the approved quality plan of the project with expediting being done on a regular basis. 10.0 Materials Receiving (Local Purchased)

All locally purchased materials are delivered to the warehouse, accompanied with original local purchase order(LPO), original delivery note, three invoices (one original and two copies); and received by the warehouse supervisor or his designated representative. The warehouse supervisor will inspect the material to ensure that the quantity and price (if applicable), match the LPO. Additionally, he will ensure that the quality of items meet the QC requirements, when items delivered to the warehouse does not meet the requirements, the warehouse supervisor rejects the materials and inform the local purchase office. When items are accepted, the warehouse supervisor signs the vendors delivery note/waybill. The vendor will provide the warehouse supervisor with original delivery note or original local purchase order. The warehouse supervisor will forward these documents to the local purchase office and copy the Construction Manager.

The Project manager will review the price, description of goods received by signing on the delivery note/waybill. He will also initial his name on the LPO and invoice, and then forward the documents to the warehouse administrative department. 12.0FORMS

BGS FORM-PP-001 - Over Short and Damaged Report BGS FORM-PP-002 - Materials Receiving Report BGS FORM-PP-003 - Supply Issue Voucher

BGS FORM-PP-004 - Non-Conformance Report BGS FORM-PP-001 - OVER, SHORT, DAMAGE REPORT Job No:Ref No: BGS FORM-PP-001 O.S & D.No:

Client:Shipper:Date Prep:

Port of Origin:Rec. Point:P.O. No:

Del:Truck No:D.M.I. No:

Way Bill No:Date Recd:M.I.V. No:

ABOVE SHIPMENT RECIEVED IN FOLLOWING CONDITION Overage or Substitution Shortage in packing package in apparent good order but contents short

Shortage in delivery No of pcs. On W B No of pcs. recd

Shortage in shipment package damaged. Appears opened on repacked Content short Damaged visible damage to material. Any damaged goods recieved notify QA/QC Dept. For Inspection.

Damaged concealed damage package in apparent good order

P.O. Item No.Quantity OrderedQuantity Recieved UnitDescription

Recommendation: Repair in Field Return to shipper/vendorReplace

Estimated cost of repair damage or replace:

Project Engineer notified on: Action By

Deliver Document Attached? Yes Recieving Report attached Yes No

Was damage or loss due to poor packing: Lack of precautionary packs? Other reason?

Explain.............................................................................................................................................

Prepared By: Approved By:

BGS FORM-PP-002 - MATERIALS RECIEVING REPORT

Project:No.Delivery order NumberShip Recieving Report No.

Client:

Contract Number:

Job Number: BGS FORM-PP-002

Date

Remarks:

Item#Qty. U/MPart Number

DescriptionO.S.D Report

Key:

O- over S- Short D- Damaged

Signed: Date Prepared/recieved by: Date

(QA/QC) Rep. BGS FORM-PP-003 - SUPPLY ISSUE VOUCHERFROM:

REQ:

TO: JOB NO: BGS FORM-PP-003EQUIP NO.

ITEMQTY U/MPART NO.DESCRIPTIONIMPORTLOCAL

TOTAL

ISSUED BY: RECIEVED BY: CONFIRMATION

W/H MGR W/H SUPERVISOR

WHITE: WAREHOUSE NUMERICAL FILE BLUE: MECHANICAL DEPARTMENT

PINK: WAREHOUSE SECURITY + REQUISITIONER GREEN: WAREHOUSE REFERENCE COPY

BGS FORM-PP-004 - NON CONFORMANCE REPORT

(1) LOCATION(2) NCR NO: BGS FORM-PP-004

(3) CONTRACT/JOB

(5) RESPONSIBLE PARTY(4) DATE:

(6) AUDIT NO: (IF APPLICABLE)

(7) REFERNCE, SPECIFICATION/PROCEDURE

(8) DESCRIPTION OF NON-CONFORMANCE:

Block 1 to 8 completed by Initiator of NCR

(9) PROBABLE CAUSE OF NON-CONFORMANCE

Block 9 completed by QA/QC Manager or Designee

(10) SUGGESTED (Engineering decision requires date & signature in this block) CORRECTIVE ACTION:

USE-AS-IS ( ) REWORK ( ) REPAIR ( ) REJECT ( ) SCRAP ( ) OTHER ( ) {DEFINE BELOW}

Block 10 Completed by Project Manager or Designee

(11) QA/QC Manager: Sign: Date:

(12) CORRECTIVE ACTION TAKEN

Block 12 Completed by Project Manager

(13) VERIFICATION OF CORRECTIVE ACTION:

Completed by QA/QC Manager or QA/QC Engineer

Date:

Representative(14) DISTRIBUTION TO:

PROJECT DIRECTOR [ ]

PROJECT MANAGER [ ]

QA MANAGER [ ]

PROJECT ENGINEER [ ]

NCR LOCATION [ ]

FILE [ ]

Completed by QA/QC Mgr or Designee

Purchase Goods/Services

Identity

Requirement

PM/CM raise purchase order

Purchasing Manager Logs Request

Purchasing Manager Reveiws Requirement to know the level of local and foreign procurement

Only Local

Purchases Required

Forward instructions to Corporate office in PHC to arrange Purchase

Check for Suitable Approved Suppliers in Company Listing

Source suitable suppliers

Purchasing carried out per corporate office QA procedure for purchasing

Formally review and approve new

suppliers

Select suppliers from which to obtain prices

Arrange Shipment Where Applicable

Analyze Bids (Prepare Analysis of Options)

Transport From Port To Required Delivery Point

Negotiate with Suppliers and Settle any Bid Anormalies

Final Selection of Supplier

Prepare PO and get PO Approved

P.O. Approved?

P.O. Approved?

Place Purchase Order

Monitor Manufacturing / Supplier Process

Ensure Any required Inspection Test Plan is Carried out

Transport from Supplier to Required Delivery Point

Check Purchased Item on Delivery at Required Delivery Point, Clients Inspection as Required

Item satisfactory?

Purchase by site office

Advice PHC office with regards to problem

Advice supplier of problem

PHC office to follow up matter with supplier and resolve

Purchasing manager will follow up with supplier and resolve problems

Problem Resolved?

Item satisfactory inspection by Client if Required

Purchased by Office?

Outstanding payments are made to supplier and PO closed in Purchasing system

Formally advise PHC office that the PO has been completed satisfactorily

Outstanding payments are made to supplier and PO closed in Purchasing system

Review suppliers performance and take any action necessary with regards to supplier status

Purchasing process completed

EX-DE0220 April 15Approved

For

ConstructionENGR TEAM

C.AC.OT.S

Validation

StatusRev.DateDescriptionPrepared

byChecked

byApproved

byContractor

ApprovalCompany

Approval

Company logo and business name

Project name

REPLACEMENT OF 6 SCH120 FLOWLINES FOR EBOCHA PROJECTCompany identification

3201.11.DBPF.10010

Contractor logo and business name

Contract No. 4600016138/39/40

Vendor logo and business name

Facility Name

EBOCHA OIL CENTRE Location

LANDScale

Sheet of Sheets

n.a.1 / 25

Document Title

PROCUREMENT PROCEDURESupersedes N.

Superseded by N.

Plant Area

Plant Unit

Projects Development, Engineering Division

This document is CONFIDENTIAL and the sole property of the Company. It shall neither be shown to third parties nor used for other purposes than those for which it has been issued/sent. Any unauthorized attempt to reproduce it, in any form, is strictly prohibited.File Name : 3201.11.DBPF.10010_02_Procurement Plan ProcedureThis document is property of NAOC Ltd. Who lawfully reserves all rights. Any unauthorised attempt to reproduce it, in any form, is strictly prohibited. NAOC will safeguard its rights according to the civil and penal provisions of the law