PROJECT REPORT:

SUBJECT:
Total Quality Management
DEPARTMENT:
Metallurgy and Materials Engineering
SUBMITTED TO:
Sir M. Sajid
SUBMITTED BY:
Shaaf Amjad
Umair Khalid
Ameen ur Rasheed

E13-304
E13-311
E13-327

DATE OF SUBMISSION:
25th of May, 2016
COLLEGE OF ENGINEERING AND EMERGING
TECHNOLOGIES UNIVERSITY OF THE PUNJAB

CONTENTS
1. OBJECTIVE
2. INTRODUCTION
3. DESCRIPTION
I.
AUDIT MANAGEMENT
II.
EMPLOYEE TRAINING
III.
STATISTICAL ANALYSIS
IV. SEZ SPECIAL ECONOMIC ZONES
V. DESIGN, DEVELOPMENT AND PLANNING
VI.
WORK ENVIRONMENT
VII.
CUSTOMER RELATED PROCESSES
VIII.
PURCHASING
IX.
NON CONFORMANCE CAPA
X. FMEA CONTROL PLANS
XI.
CONTROL, MONITORING AND MEASURING OF EQUIPMENTS
4. EXECUTIVE SUMMARY
5. SCOPE
6. RESEARCH METHODOLOGY
7. FINDINGS AND DATA ANALYSIS
8. DISCUSSION
9. CONCLUSION
10. RECOMMENDATIONS
11. FUTURE PROJECTIONS

1. OBJECTIVE:

QUALITY MANAGEMENT IN OIL AND GAS INDUSTRIES

2. INTRODUCTION:
From innovation through conveyance, companies of oil and gas are oil & gas companies are
apprehended very responsible for atmosphere, emissions of carbon and several health and safety
related commands. From all around the world, administrations are continuously narrowing the
rules and regulations of industries at the same time. Management of complex processes,
interactions of supplier and experimentation with the most leading technology such as IoT
sensors is very perplexing. Three most valuable chains in oil and gas companies have their own
strict rules of quality controls and other acquiescence requirements, these chains are given
below:

Upstream
Midstream
Downstream

The execution of performance in the early stages of these chains helps to indicate the quality of
output product when these valuable chains depend on each other. But, a clear cut methodology of
quality management and acquiescence are practically not existed. Dealers are apprehended
responsible for maintenance standards per ISO/TS 29001, but their capability to interconnect
presentation and deliver perceptibility downstream is limited by their supporting technology. For
working in such a highly-synchronized industry, oil & gas companies have not prearranged the
right devotion to quality and passivity. The worlds highest execution companies are taking a
sealed-loop methodology for quality management and obedience. Oil & gas contractors could
distinct themselves from the pack by following suit, accepting a modern innovativeness quality
management solutions with cohesive tools for controlling acquiescence, EH&S, sustainability,
GRC, and dealer quality.

3. DESCRIPTION:
I.

AUDIT MANAGEMENT: [1]

Auditing helps to identify the issues in operational system. Internal audits are carried out
with in various departments of the industry to measure the deviation from quality standards.
According to the ISO 29001 which is being followed by various top notch oil production
companies in the world internal audits shall be scheduled at a particular interval and
conducted by a person who is independent of the task, work or department being audited.
It is the responsibility of the management to conduct the audits timely in concerned areas of
industry. Audited results should be recorded and compared with previous audits.
Management should timely identify the deviation from quality conformance and should take

corrective measures to eliminate it. ISO 29001 suggest to at least have one audit annually.
Many renowned oil and gas companies such as CHEVRON, SHELL, BRITISH
PETROLEUM
II.

EMPLOYEE TRAINING: [1]

Employee training is one of the biggest factor in order to maintain quality standards being
followed by the organization. Competitiveness between industries is increasing day by day
and competent and trained employees play a major role in putting the organization a step
ahead of others. According to the ISO 29001, the oil and gas companies should identify the
areas where training is needed and then provision of proper training to those personals who
are directly cooperating in quality management system of the company. Company should
also have a check and balance on the effectiveness of the training given and see how it helps
the company to achieve conformance to quality.

III.

INSPECTION: [1]
Timely inspections saves from disasters and losses. Inspections play important role in proper
operation of plants, machines etc. Inspections prolong life of working equipment and ensure
proper working which in turn ensure process quality conformance to standards. Oil and gas
companies widely use many inspection techniques for proper maintenance of Equipments in
use.
Rig inspections, pipeline inspections, nondestructive testing, Tubular inspections and many
more inspections are utilized at field to ensure proper operation of Equipments. On the other
hand ISO 29001 also suggests to do monitor the quality management system operations time
to time. It also suggests to utilize a proper and viable method to inspect it for quality
conformance deviations. The methods employed should have the capability to ensure
meeting of planned results.
Oil and gas companies are using statistical process control to obtain desires results. Some
software are also helping those companies to achieve their goals regarding inspections

IV.

DESIGN, DEVELOPMENT and PLANNING [1]

Design and development of products in oil and gas industries is very important for hassle free
process. Steps are taken to ensure that product quality complies with that of what is in the
design standard. It is must for a good organization to establish quality objectives. The
management is responsible for meeting those quality objectives. In oil and gas industries,
every process is pre-planned and is executed by group of managers and engineers. Deviation
from plan will result in loss of quality of product. The consequences will be lost in revenue
of the company.

V.

WORK ENVIRONMENT: [1]

There are many factors in work environment such as light, temperature, humidity, noise and
weather which surely effect and oil or gas rig. It effects the employees working on it. Excess
of any of these physical environmental factors may cause harm to workers which can be a big
safety concern. Many oil and gas rigs are offshore or in deserts which have extreme
environmental conditions. In order to make that place workable for human, preventive
measures are employed such as use of PPE (Personnel Protective equipment), Rain coats,
Safety Harnesses. Provision of basic necessities such as water, food, health etc.
Underestimating these factors will result in harm to workers which may lead to operation
failure and if it becomes worst then legal actions may ban the operations of the company
which will be a total disaster.

VI.

CUSTOMER RELATED PROCESSES: [1]

Customer satisfaction is one of the greatest quality effecting factors. It is one of the major
concerns of todays industrialists for their business success.
Oil and gas companies are paying attention on this perspective to build a good relationship
with the vendor and the end user.
CUSTOMER COMMUNICATION:

The organization shall determine and implement effective arrangements for communicating
with
Customers in relation to
Product identification and information
Product handling, enquiries, etc.
Customer response and feedback
VII.

PURCHASING: [1]
The organization should identify, implement and control the purchasing process to evaluate
the products its demands and total cost of purchased product. They satisfy its needs and
requirements as well as those of interested parties.
Purchasing processes should include
Identification of needs

total cost of purchased product, taking account of performance, price and delivery,
inquiries, quotations and tendering,
Verification of purchased products,
Selection of suppliers, including those with unique processes,

Documentation of purchase
Contract administration.
Nonconforming purchased products.
supplier control and supplier development
Assessment of risks associated with the purchased product.

Purchasing information:
Purchasing information describes about requirements of the product which is to be purchased.

VIII.

Requirements for product

approval

its

procedures, processes and equipment

involve
Requirements for qualification of personnel
Quality management system requirements (QMS)

FMEA Control Plans [1]

The quality of products and processes is closely tied to design. Ideally, quality and reliability
will be built into designs in the first place, and then calibrated and optimized as needed. In
industries like automotive, aerospace and defense, oil & gas, and medical device, where
regulatory compliance and customers can be unforgiving, Design specification is as
important as production process.
As we move on to the 21st century, high quality products having efficient design system and
processes means adopting technology.

IX.

NON CONFORMANCE CAPA: [1]

The occurrence of a problem with a process or product is referred as nonconformance in
quality realm. To manage the process of nonconformances, it is referred as Conformance
management
Manufacturers have been tracking and managing nonconformance procedures and Corrective
and Preventive Actions (CAPA) for decades. Doing so is not only a requirement in many
highly-regulated environments, its also a necessary tool for reducing the cost of poor quality
in process-heavy industries like automotive, aerospace and defense, oil & gas, and medical
device.
It enhance the skills of professionals from the shop floor to the executive suite with the
suitable information required to manage and prevent nonconformance.

X.

CONTROL, MONITORING AND MEASURING OF EQUIPMENTS: [1]

The oil and gas companies administration shall determine the policy for conducting control
and monitoring surveys for various equipment currently operational.
There should be a standard to which the quality of the monitoring should be conformed
A series of processes shall be maintained by the organization through which monitoring and
measurement can be carried out and are executed in such a way that is in conformance with
the monitoring and measurement standards
Following are some of the steps, methods to take under consideration while monitoring an
operational equipment.
a) should be calibrated from time to time against a specific standard
b) Only renowned standards such as international standards shall be used for calibrations
c) Where such standards are not provided, basis for calibrations and verifications are to be
recorded properly and timely
Validation and verification of the record shall be done timely to depict and harmful change
that may affect equipment or product.
Used of computed aided programs or software are now a days used for efficient monitoring
and keeping a control on Equipments working efficiency record.
Following are the control features for maintaining an equipment in oil and gas industries.
Equipment type
Unique identification
Locations
Frequency
Checks
Checks method
Acceptance criteria

4. EXECUTIVE SUMMARY:
The purpose of the research was to analyze different factors of quality management in oil and gas
sector. In this regard IS0 29001:2010 is consulted which is constructed for employing quality
management especially in oil and gas industries. According to the ISO 29001: 2010 major
emphasis of TQM in oil and gas industries are on Safety, Environment, and Training of
employees, Inspection and customer satisfaction. In our project we analyzed TQM in top oil and
gas industries of the world such as EXXON MOBIL, SAUDI ARAMCO, CHEVRON,
BRITISH PETROLUEM, SINOPEC and PETROCHINA. Two oil and gas based industries

of Pakistan namely PAKISTAN REFINERY LIMITED and TOTAL PARCO were analyzed
for TQM in their operations. Data for research was collected from the respected profiles of the
companies to analyze the factors on which they are emphasizing to achieve the utmost level of
quality in every aspect related to their industry.
5. SCOPE:
The project focusses on finding the various factors that affect total quality management in oil and
gas sector. As the nature of the work in oil and gas sector is different from others. Techniques for
quality management also vary up to some extent from other fields. In this regard, our research
will help to understand the strong influencing factors that one of the major oil and gas
manufacturers are following. This project will also give a brief comparison of the HSEQ policies
of Top leading oil and gas companies currently in the world. This comparison will enlighten our
view about the factors of main focus relating quality management and excellence in those
industries. The project also focusses on standards to which companies are certified to know about
various features of those standards that are helping various multinational companies to gain a
respectable name in the world regarding quality. ISO TS 29001:2010 titled Petroleum,
petrochemical and natural gas industries Sector-specific quality management systems
Requirements for product and service supply organizations is also summarized in this
paper.

6. RESEARCH METHADOLOGY:
Data for research on Quality management in oil and gas sector was searched, collected and
analyzed from following mentioned sources.

ISO TS 29001:2010

ISO TS 29001 is a quality assurance document especially for integrating quality standards in
petroleum related industries. The document was consulted to obtain information regarding
different perspectives regarding quality management tin oil and gas.

INTERNET

Top oil and gas companies of the world i.e. EXXON MOBIL, SAUDI ARAMCO,
CHEVRON, BRITISH PETROLUEM, SINOPEC and PETROCHINA were analyzed for
their quality management policies. In this regard HSEQ (Health, Safety, Environment and
Quality) policies of each company was investigated through their web profiles available on
internet. Two Pakistan based companies namely PAKISTAN REFINERY LIMITED and
TOTAL PARCO were also analyzed for their TQM operations.

7. FINDINGS AND DATA ANALYSIS:

1. TOTAL PARCO: [2]

INTRODUCTION:
TOTAL is a one of the leading oil based companies in Pakistan and is providing petroleum
related products to its customer with collaboration with PAK ARAB REFINERY LTD
(PARCO) which is a one of the largest companies of Pakistan in energy production.
PARCO was formed in result of a collaboration between Government of Pakistan and the
Emirate of Abu Dhabi in 1974.
MOTIVES OF QUALITY MANAGEMENT IN TOTAL PARCO
1.
2.
3.
4.
5.
6.
7.
8.

Establishment and promotion of Safety culture

Transport management
Technological Risk Control and assets Integrity
Reporting of accidents and prior action
Security
Selection and assessment of suppliers
Environmental regulations
Role in Sustainable Development.

2. CHEVRON [3]

INTRODUCTION:
Chevron Corporation is an energy based multinational company of America. Currently
established n more than 180 countries, Chevron specializes in natural gas, oil, geothermal energy
industries, crude oil exploration and refining and manufacturer of various chemicals and active in
more than 180 countries. As by 2014, Chevron is considered among the largest oil and gas
companies of the world
OPERATIONAL EXCELLENCE MANAGEMENT SYSTEM
In chevron, quality is attained by effective risk management which helps them to operate
reliably, efficiently and, most important, safely
Operational Excellence in CHEVRON
Operational Excellence is achieved in Chevron which are classified by them into 13 elements.
The Targets of Operational Excellence are met through processes and some of the international
standard being followed by the local management. These standards help to attain quality in the
processes.
1st Element: security of personnel and assets
2nd Element: facilities design and construction
3rd Element: safe operations
4th Element: management of change
5th Element: reliability and efficiency
6th Element: third-party services
7th Element: environmental stewardship
8th Element: product stewardship

9th Element: incident investigation

10th Element: community and stakeholder engagement
11th Element: emergency management
12th Element: compliance assurance
13th Element: legislative regulation

3. BRITISH PETROLEUM [4]

INTRODUCTION:
British Petroleum is a British multinational company. Headquarter of BP is in London, England. BP is
considered among the top seven world supermajor oil and gas companies

QUALITY ASSURANCE IN BP:

Quality assurance in BP is according to the formulization from ISO9001:2008 BP quality
management system has been designed in the perspective of ISO 9001:2008 (quality
management system standard)
Quality management system is applied by BP to their following fields.

Order Handling
Manufacturing
Logistics
Procurement

4. PAKISTAN REFINERY LIMITED [5]

INTRODUCTION:
Pakistan Refinery Limited is a crude oil Refinery. It is situated on Karachi Coastal Hub,
Pakistan. PRL is adopting hydro skimming process to refine crude oil and meet the fuel based
energy requirements of Pakistan. Pants in PRL converts crude oil into a variety of distilled
petroleum products such as Furnace Oil, High Speed Diesel, Kerosene oil, Jet fuel and Motor
gasoline etc. Currently operating at two locations in Karachi at Korangi Creek and Kemari.
QUALITY MANAGEMENT IN PRL
PRL maintain and implement certified HSEQ Standards of ISO 9001, ISO 14001 & OHSAS
18001.
Role

Conducts Audits External / Internal as per the requirement of the standard

certification
Conduction of Hazard and Risk Assessments
Conduction of Staff Training
Organizing Periodic Dills
Coordination with government and external oil companies to meet the requirements
of oil products in Pakistan for hassle free management of resources to resist crisis.
5. SAUDI ARAMCO: [6]

INTRODUCTION
Saudi Aramco is an oil and Gas Company based in Saudi Arabia. It is a fully integrated, global
chemical and petroleum enterprise. It is worlds largest crude oil producer on the basis of the
capacity.
Quality assurance is ensured by inspections and choosing the right quality system
Quality monitoring is ensured by management to comply by the specifications and purchased
order conditions of Saudi Aramco
Quality control is ensured by the QA/QC supervisors to ensure conformance to the Quality
standards being employed in Saudi Aramco
Aramco Overseas Quality Management strives to attain global excellence in quality in EPC
Engineering
Procurement
Construction
6. EXXON MOBIL [7]

INTRODUCTION:
Exxon Mobil is a multinational oil and gas company based in America. Its headquarter is
situated in Texas. The company is the 8th largest company in the world based on revenue and
third largest on the basis of market capitalization
QUALITY MANAGEMENT IN EXXOM MOBIL:

Training of Employee
Safety Insurance of Employee
Environmental Stability
Delivery Management

 Disaster Response Management

7. SINOPEC [8]

INTRODUCTION:
SINOPEC is a the largest petroleum energy and chemicals company in China, The company is
state owned and its headquarter is in Chaoyang District, Beijing
Oil and gas exploration, refining, and marketing; production and sales of petrochemicals,
chemical fibers, chemical fertilizers, and other chemical products are included in Sinopecs
Business.
QUALITY MANAGEMENT IN SINOPEC:

PETROCHINA: [9]

8. DISCUSSION:
Analyzing from various perspectives, it is evident that quality management is a life line in oil
and gas industries. The success of an industry lies on the various disciplines that come under
the umbrella of the quality management. A research was carried out to find various
influencing factors regarding TQM in oil and gas industries in this regard. Information was
collected from internet from worlds leading oil and gas companys profiles.
In this regard it was found that ISO has given its standardization for maintain quality in oil
and gas companies in the form ISO TS 29001:2010. The tile of the standard was Petroleum,

petrochemical and natural gas industries Sector-specific quality management

systems Requirements for product and service supply organizations
The standard contained very detailed features and their respective procedures for maintain
quality in various aspects of oil and gas industry. We analyzed the standard and found out
that quality in oil and gas industries are dependent on various important perspectives. ISO
emphasized to conduct regular audits both internal and external with in various departments
of the industry to know of the conformance gaps with in the processes. Auditing helps to
identify the gap and helps to bridge them in time to attain quality specified in the standard
being followed. On the other hand proper training of employees plays a major role in
developing proper quality management in industry. Skilled full employees and labor will
boost the processes, will help to minimize defects in the system processes and will create a
environment of cooperation between employees. This will result in better communication
between the departments within the industry due to which quality conformance will improve
and company working efficiency will rise.
As there are many plants and machinery being used in oil and gas industries to ensure the
uninterrupted flow of process being carried out by those plants and machinery, proper
maintenance and inspection is required. Without proper inspection and maintenance the
process will show defects hindering the quality of process and the end product too. The
negligence in this important factor can result in total failure of the company. Thats why oil
and gas companies are investing a lot in inspections and maintenance to attain a process that
is in conformance to the quality standards.
Safety and working environment are the factors that affect the employee and the labor due to
which companies are ensuring adequate measure to ensure the safety of employee and
providing them a comfortable and adequate working environment.
Automation is playing a vital role in improving management processes. Computer aided
processes help to identify problems in time and helps to recover as soon as possible.
Aside ISO TS 29001:2010, various perspectives of quality management in worlds top oil
and gas companies were analyzed.
Companies like EXXON MOBIL, SAUDI ARAMCO, CHEVRON, BRITISH
PETROLUEM, SINOPEC and PETROCHINA
From the above research we can say that quality is an important strategic term which is often
forgotten and play a vital role in innovation process. The results shows the overall TQM
practices improves overall performance measures. In this study, the perceived links between
innovation and quality are not easily seen by the sample companies. They involved in quality
related issues such involvement with suppliers and customers and various other issues like
quality standards, quality cost and training methods. Successful training improves operational
performance, employee performance, and customer results. Effective customer focus efforts
increase operational performance, customer results, and market and financial performance.

Effective strategic quality planning efforts improve employee performance and also social
responsibility of the company.

9. CONCLUSION:
From above discussions, it can be concluded that by implementing Total quality management
system (TQM) to system, performance measures get improves. Proper implementation of all
aspects of TQM should be managed because each factor in TQM practices and procedures
improves different aspects of firm performances. Company should improve employee or
workers involvement/skill, firm structure and allocate sufficient resources to implement
TQM successfully.

10. RECOMMENDATIONS:
So the following are recommendations for companies and authorities who has practical
implementation:

The transition to TQM philosophy is essential in influencing the overall operations of the
organizations.

For effective implementation of TQM, the oil sector should develop a system for all
managerial and operational processes to measure improvements in its managerial and
operational performance.

The implementation of most quality initiatives, in particular philosophy of TQM, requires

dynamic strategic planning, which necessitates a systematic planning.

Moving towards quality initiatives needs positive changes in management philosophy and
behaviors.

It is important to develop and re test the efforts of the research and development activities
across petrochemical companies within the frame of developing an internal culture which
could help to involve all the departments of companies.

Top management must be aware and thoroughly understand the essential concept,
principles, methods and tools of TQM philosophy or any other quality management
initiatives that they are looking to employ, with commitment being a must.

Training programs need extensive review to lead processes of change. They should
include the tools, techniques and methods to boost morale of ensuring quality in
employees

11.

Empowerment of employee is a new perspective of managing companies towards a

competitive future. Therefore, significant attention and extensive care must be paid to
their human resources.

Analyzing the findings, a proper legislation for quality initiatives must take up.

New system should be established in all oil and gas companies to deal with quality and
quality initiatives programs.

FUTURE PROJECTIONS:
In TQM practices, proper employee involvement and continuous improvement are major
factors. And can be discussed in future studies. Relationships between leaderships and
performance indicate the presence of nonlinear relationship. Insignificant relationships
among TQM variables and performance may create mediational relationship among
them. And this relations among them can be studied widely. Enterprise resource planning,
ISO certification, firm age, and firm size can also be included as moderating variables in
future studies. Barriers to TQM practices and having ISO certification in different
countries and industries forces to study comparatively to investigate these parameters.
Further studies need to be done considering the critical and important requirements of
adopting TQM in oil and gas sector. Further investigations reveals about role of
leadership across different companies in applying TQM. As research studied the role of
particular variables information management system, organization structure, TQM
resources availability and involvement of employees in management activities. So there
is need to explore to what extent the strategic thinking that exists across the different oil
and gas sectors and other sectors corresponds with the required strategic thinking of
TQM.

REFERENCES
[1] "ISO TS 29001:2010 Petroleum, petrochemical and natural gas industries Sector-specific quality
management systems Requirements for product and service supply organizations," International
organization of standardization, 2010.
[2] Total Parco Pakistan Ltd, [Online]. Available: totalparco.com.pk/.

[3] CHEVRON, [Online]. Available: https://www.chevron.com/.

[4] "BP GLOBAL," BRITISH PETROLEUM, [Online]. Available: www.bp.com/.
[5] "HSEQ IN PRL," Pakistan Refinery Limited, [Online]. Available:
http://www.prl.com.pk/hseq/hseqinprl.php.
[6] "Who We Are," Saudi Aramco, [Online]. Available:
http://www.saudiaramco.com/en/home/about/who-we-are.html.
[7] EXXON MOBIL, [Online]. Available: corporate.exxonmobil.com/.
[8] "Welcome to SINOPEC," [Online]. Available: english.sinopec.com/index.shtml.
[9] "PETRO CHINA," PETROCHINA, [Online]. Available: www.petrochina.com.cn/ptr/.