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Regulations on Safe Production of Offshore Oil (Order No. 4 of the State Administration for Work Safety) Regulations on Safe Production of Offshore Oil, Order No. 4: The “Regulations on Safe Production of Offshore Oil” were approved at the meeting of the bureau directors of the State Administration for Work Safety on January 6, 2006; they are hereby promulgated and shall come into force on May 1, 2006. The “Regulations on Safety Management of Offshore Oil Operations” issued by the former Ministry of Petroleum Industry in 1986 shall be repealed simultaneously. Director Li Yizhong, February 7, 2006 Chapter 1 General Provisions Article 1 These provisions are formulated in accordance with the Work Safety Law and relevant laws and administrative regulations, with the aim of strengthening work safety in offshore oil production, preventing and reducing accidents and occupational hazards in such production, and protecting the lives and property of workers. Article 2 These provisions shall apply to the safe production of offshore oil exploration activities in the internal waters, territorial sea, contiguous zone, exclusive economic zone, continental shelf of the People’s Republic of China, and other sea areas under the jurisdiction of the People’s Republic of China. Article 3: Offshore oil operators and contractors are the principal entities responsible for the safe production of offshore oil. The term \"operator\" as used in these regulations refers to the enterprise responsible for carrying out offshore oil exploitation activities, or the entity responsible for such activities as stipulated in the oil contract. The term \"contractor\" as used in these regulations refers to a company or entity that provides services to the operator. Article 4 The General Administration of Work Safety (hereinafter referred to as the Work Safety Administration) shall exercise comprehensive supervision and management over the safe production of offshore oil. The State Administration of Work Safety has established the Offshore Oil Operations Safety Office (hereinafter referred to as the OIOSO) as the executive body responsible for carrying out comprehensive supervision and management of safety in offshore oil operations. The Offshore Oil Safety Office establishes branches as needed, and each branch carries out specific safety supervision and management in accordance with relevant regulations. Chapter 2 Safety Production Assurance Article 5 Operators and contractors shall comply with relevant laws, administrative regulations, departmental rules, **standards, and industry standards regarding safety production, and shall possess the necessary conditions for safe production. Article 6: The operator shall strengthen safety supervision and management of the contractor, and specify their respective responsibilities for safety production management in the contract. Article 7 The principal persons in charge of the operator and contractor shall be fully responsible for the safety production work of their respective entities. Operators, contractors engaged in activities such as geophysical exploration, drilling, logging, well recording, testing, and downhole operations, as well as the principal persons in charge and safety management personnel of offshore oil production facilities, shall, in accordance with the regulations set by the State Administration for Work Safety, receive safety qualification training, possess the necessary knowledge and management skills for safe production, and only after passing the relevant assessments and obtaining the required certificates may they take up their positions. Article 8: Operators and contractors shall provide safety production education and training to their employees, ensuring that they possess the necessary knowledge of safety production, are familiar with relevant safety production regulations and safety operating procedures, and have mastered the safety operating skills for their respective positions. Article 9: Personnel working at sea must receive safety and life-saving training for offshore oil operations, and may only go out to work at sea after passing the assessment. Personnel going out to sea temporarily should receive necessary safety training. Article 10: Personnel engaged in special operations must receive specialized safety technical training in accordance with the relevant regulations of the State Administration for Work Safety. Only after passing the assessment and obtaining a qualification certificate for special operations can they start working. Article 11 A safety pre-assessment shall be conducted for offshore oil construction projects during the feasibility study phase or the formulation of the overall development plan. The safety pre-assessment report shall be submitted to the HYSY Safety Office for record-keeping after review. During the design phase, the important design documents and safety sections for offshore oil production facilities must be reviewed and approved by the certification inspection body for such facilities (hereinafter referred to as the certification inspection body). The certifying inspection agency shall affix its seal to the design documents and drawings that have been reviewed and approved. Article 12: Marine oil production facilities shall be constructed by professional units with the appropriate qualifications or capabilities, and the construction units shall carry out the work in accordance with the design plans or drawings approved through review. Article 13: Before starting trial production of offshore oil production facilities, they must pass inspection by the certifying inspection agency and obtain either a final inspection certificate or a temporary inspection certificate. Safety measures for trial production shall also be formulated and filed with the relevant branch of the Offshore Oil Safety Office 45 days prior to the start of trial production. The relevant departments of CNOOC Safety Office conduct inspections on the condition of offshore oil production facilities and the implementation of safety measures. Article 14: After the trial production of offshore oil production facilities is underway normally, an application for safety completion inspection shall be submitted to the Offshore Oil Safety Office. It can be put into formal production and use only after passing the acceptance inspection and obtaining the work safety license. Article 15: Operators and contractors shall truthfully inform the workers of the hazardous factors and occupational hazards present at the work site and at their posts, as well as the corresponding preventive and emergency measures. Article 16: Operators and contractors shall provide workers with personal protective equipment that meets **standards or industry standards, and shall supervise and educate the workers to wear and use such equipment in accordance with the relevant usage rules. Article 17: Operators and contractors shall establish systems for the safety inspection and maintenance of offshore oil operation facilities, production facilities, and their specialized equipment, create records for such inspections and maintenance, and assign dedicated personnel to be responsible for them. Article 18: Operators and contractors shall strengthen fire and explosion prevention management, and designate and mark safe areas and hazardous areas in accordance with relevant regulations ； When working in hazardous areas, the work procedures and safety measures should be reviewed. Article 19: Operators and contractors shall strengthen the management of hazardous materials such as those that are flammable, explosive, toxic, or corrosive, and shall handle them in terms of loading, unloading, transportation, storage, use, and disposal in accordance with **relevant regulations. Article 20: The specialized equipment for offshore oil operations must pass inspection by a qualified specialized equipment inspection agency before it can be put into use. The professional equipment inspection agency is responsible for the inspection results. Article 21 Before marine oil operation facilities are put into use for the first time or before the operation area is changed, an operation plan and safety measures shall be formulated. The work plan and safety measures shall be filed with the relevant department of CNOOC Safety Office 15 days before the work begins. Foreign offshore oil operation facilities must comply with the above requirements before entering the waters under the jurisdiction of the People’s Republic of China. Article 22: Operators and contractors shall establish a guard ship duty system, with guard ships on duty around offshore oil production facilities and mobile drilling rigs (platforms). Excluding unattended production facilities and shore structures. Article 23: When preparing plans for drilling, oil production, and other downhole operations, operators or contractors shall determine safe and reliable well control procedures and hydrogen sulfide prevention measures based on the geological conditions and the marine environment. Before opening the oil (gas) layer, the operator or contractor shall verify the implementation of well control and hydrogen sulfide prevention measures. Article 24: Operators and contractors shall keep relevant records related to safe production, mainly including rosters of workers, work logs, training records, records of accidents and emergencies, maintenance records of safety equipment, as well as information on sea conditions and weather. Article 25 A certification inspection system shall be implemented throughout the entire process of design, construction, installation, and operation of offshore oil production facilities. The certification inspections for offshore oil production facilities include construction inspections, regular inspections during operation, and temporary inspections. Article 26: The certification inspection work shall be carried out by a qualified certification inspection agency commissioned by the operator. Article 27 The certification inspection agency shall conduct reviews and inspections in accordance with relevant laws, administrative regulations, departmental rules, as well as **standards, industry standards, or technical standards selected by the operator, and shall be responsible for the results of such reviews and inspections. The technical standards selected by the operator shall not be lower than **standards and industry standards. The HAI Oil Safety Office oversees the design review procedures and inspection procedures implemented by the certification inspection agencies. Chapter 3 Supervision and Management of Work Safety Article 28 The Offshore Oil Safety Office and its various branches shall perform the following supervision and management duties regarding work safety in offshore oil operations: (1) Organizing the drafting of regulations, rules, and standards for work safety in offshore oil operations ； (II) Supervising and inspecting the safety conditions of operators and contractors, the safety of equipment and facilities, and the use of personal protective equipment ； (III) Supervising and inspecting the safety production education and training provided to operators and contractors ； The person in charge of operations is responsible for the safety training and assessment of contractors engaged in geophysical surveys, drilling, logging, well logging, testing, downhole operations, etc., as well as the key personnel in offshore oil production facilities, safety management staff, and special operation workers ； (IV) Supervise and inspect the compliance with the \"three simultaneities\" principle regarding the production facilities of offshore oil construction projects; be responsible for the filing management of safety pre-assessment reports for such projects; organize the safety inspection and acceptance procedures for the production facilities of these projects; and be in charge of issuing safety production licenses ； (5) Reviewing the qualifications of social intermediary service agencies that are responsible for certification inspections of offshore oil production facilities, testing and inspection of specialized equipment, safety assessments, safety training, and safety consulting ； (VI) Organize the investigation and handling of production safety accidents ； Coordinate emergency rescue efforts for accidents and hazards. Article 29 Supervision and inspection personnel must be familiar with the laws, regulations, and safety technical knowledge related to offshore oil safety, be competent in carrying out inspections related to offshore oil safety, pass relevant assessments, and obtain the appropriate law enforcement qualifications. Article 30 The Offshore Oil Safety Office and its various branches shall, in accordance with the law, supervise and inspect the compliance of operators and contractors with laws, administrative regulations, as well as **standards or industry standards related to work safety, and exercise the following powers: (1) Conduct safety inspections of operators and contractors, review relevant documents, and obtain information from relevant units and personnel ； (II) For any violations of safety production regulations identified during the inspection, they shall be corrected on the spot or required to be rectified within a specified time limit ； (III) For potential accident hazards identified during the inspection, orders shall be issued to eliminate them immediately ； If safety cannot be ensured before or during the elimination of major accident hazards, workers must be ordered to evacuate the hazardous area, and the operation must be suspended temporarily or the use stopped ； Only after the major accident hazards have been eliminated and approved through review can production and use be resumed ； (IV) Facilities, equipment, and apparatus that are believed to fail to meet the **standards or industry standards for ensuring safe production shall be sealed up or seized, and a decision regarding their handling shall be made in accordance with the law within 15 days. Article 31: When conducting supervision and inspections, supervisors shall fulfill the following obligations: (1) Be dedicated to their duties, adhere to principles, and enforce the law impartially ； (II) When carrying out supervision and inspection tasks, valid supervision and law enforcement credentials must be presented, and standardized administrative law enforcement documents must be used ； (III) Comply with the relevant on-site management regulations of the operator and contractor, and shall not disrupt normal production activities ； (IV) Protecting the relevant technical and commercial secrets of operators and contractors. Article 32: During safety inspection and supervision, the operator or contractor shall provide necessary working conditions such as transportation and protective equipment free of charge to the inspection personnel. Article 33 Intermediary agencies that undertake certification inspections for offshore oil production facilities, testing and inspection of specialized equipment, safety assessments, safety training, and safety consulting must possess the qualifications stipulated by **. Chapter 4 Emergency Plans and Accident Handling Article 34: Operators shall establish emergency rescue organizations, assign full-time or part-time rescue personnel, or enter into rescue agreements with professional rescue organizations, and prepare emergency plans prior to carrying out operations. The contractor shall prepare an emergency response plan before carrying out operations. The emergency response plan shall be filed with the relevant branch of CNOOC Safety Office and other relevant **departments. Article 35 The emergency plan shall include the following main contents: basic information on the operators and contractors, hazardous characteristics, and available emergency rescue equipment ； Emergency organization structure, responsibility allocation, communication and coordination ； Disposal procedures such as emergency plan activation, emergency response, information handling, termination of the emergency state, and subsequent recovery ； Emergency drills and training. Article 36: Emergency plans shall take full account of factors such as the nature of the operations, the environmental conditions in the sea area where the operations are carried out, the type of operational facilities, the capacity for self-rescue, and available external support. They should be capable of preventing and dealing with various types of sudden accidents and potential hazards that could lead to accidents, and should be revised or supplemented in a timely manner as actual circumstances change. Accidents and emergencies include the following situations: uncontrolled well blowouts, fires and explosions, platform emergencies, plane or helicopter crashes, ship accidents at sea, damage/leaks in oil (gas) production facilities and pipelines, leaks of toxic and hazardous substances, release of radioactive materials, and diving accidents ； Severe injuries, deaths, disappearances of personnel, as well as explosive infectious diseases and poisoning ； Oil spills, natural disasters, and other emergency situations. Article 37: In the event of an accident or a situation that may lead to one, the operators and contractors shall take emergency measures in accordance with the provisions of the emergency plan, in order to prevent the situation from worsening and to reduce casualties and property losses. When an event not specified in the emergency plan occurs, on-site staff should promptly report it to the person in charge. The person in charge shall take appropriate measures in a timely manner. Article 38: After an accident or emergency occurs, the parties involved, personnel on site, supervisors of operators and contractors, various departments, and CNOOC Safety Office shall report the incident level by level in accordance with relevant regulations. Article 39 Upon receiving a report of a major accident, the Offshore Oil Safety Office and its relevant branches and departments shall immediately rush to the accident site to organize rescue efforts and conduct an investigation into the accident. Article 40: In the case of accidents without any casualties, as well as minor or serious injury incidents, an accident investigation team shall be formed by the person in charge of the operator and contractor or a person designated by them, with the participation of relevant personnel from production, technology, safety fields, as well as union representatives. The investigation and handling of other accidents shall be carried out in accordance with relevant regulations. Article 41: Operators shall establish an accident statistics and analysis system to regularly count and analyze accidents. The annual accident statistics report shall be submitted to the relevant branches of CNOOC Safety Office and **the relevant departments. The contractor is responsible for compiling statistics on accidents that occur during the provision of services. Chapter 5 Penalties Article 42 Those who are responsible for supervision and inspection and abuse their powers, neglect their duties, or engage in malpractice for personal gain during the supervision and inspection of safe production in offshore oil operations shall be given administrative sanctions in accordance with relevant regulations ； If a crime is constituted, criminal liability shall be pursued in accordance with the law. Article 43: If a operator or contractor commits any of the following acts, they shall be given a warning and fined not more than 30,000 yuan: (1) Failing to undergo the certification inspection as required or obtaining a certification certificate by illegal means ； (II) Failing to equip a guard ship as required, or using a vessel that does not meet the relevant requirements as a guard ship, or failing to complete the registration procedures for the guard ship as prescribed ； (III) Failing to complete the filing procedures in accordance with the provisions of Articles 11, 13, 21, and 34 of these regulations ； (IV) Failure to formulate well control measures and hydrogen sulfide prevention measures in accordance with relevant regulations, or failure to implement such measures ； (5) Those who work at sea fail to undergo the required safety and life-saving training for offshore oil operations and pass the assessment before starting work. Article 44 The administrative penalties specified in these regulations shall be imposed by the CNOOC Safety Office and its various branches. Where other laws and administrative regulations, such as the Work Safety Law, provide provisions regarding administrative penalties for work safety violations, those provisions shall apply. Chapter 6 Supplementary Provisions Article 45 Definitions of terms used in these provisions: (1) Oil refers to crude oil and natural gas that are buried underground, being extracted, or already extracted. (II) A petroleum contract refers to a contract for oil exploration, development, and production legally concluded between Chinese petroleum enterprises and foreign enterprises for the cooperative exploitation of offshore petroleum resources in the People’s Republic of China. (III) Offshore oil exploitation activities refer to oil exploration, development, production, storage and transportation, oil field abandonment, and related activities carried out in the sea areas specified in Article 2 of these regulations. (IV) Offshore oil operation facilities refer to mobile offshore drilling rigs (platforms), geophysical survey ships, pipe-laying ships, crane ships, cementing ships, acidizing and fracturing ships, and other such facilities used for offshore oil operations. (5) Offshore oil production facilities refer to offshore and onshore structures such as fixed platforms, single-point moorings, floating production, storage, and offloading units, subsea pipelines, offshore oil transfer terminals, tidal flat coasts, artificial islands, and onshore terminals, all of which are used for the extraction of offshore oil. (VI) Specialized equipment refers to the devices used in offshore oil extraction that are highly dangerous or have a significant impact on safe production. This includes offshore structures, oil extraction equipment, offshore boilers and pressure vessels, drilling and workover equipment, lifting and hoisting equipment, systems for detecting fires and combustible gases as well as for alarm and control purposes, safety valves, life-saving equipment, fire-fighting equipment, steel wires and other elements used for securing things, as well as electrical instruments. Article 46: The supervision and management of safe production in oil extraction from inland lakes shall be carried out in accordance with the corresponding provisions of these regulations. Article 47 These provisions shall come into force as of May 1, 2006; the Regulations on Safety Management of Offshore Oil Operations issued by the former Ministry of Petroleum Industry in 1986 shall be repealed simultaneously.