TECH TALK VESSEL EXPERIENCE FACTOR [VEF] OIL, GAS AND CHEMICALS SERVICE MARCH 2014

Introduction In the first part of February an addendum to the Vessel Experience Factor [VEF] standard was published and subsequently distributed to all of our offices. Based upon a number of the responses to this addendum, we consider it appropriate to revisit the issue of the VEF and highlight some of the common mistakes and misconceptions associated with it as this [the VEF] remains a problematic area and common cause for claims and complaints. For reference, the VEF standard is a joint one between the Energy Institute and the American Petroleum Institute under the designation of API MPMS Chapter 17.1 / EI HM 49 Vessel Experience Factor [VEF] - 2nd edition, May 2012 Common Mistakes The following are mistakes that we see on a regular basis: Not combining multiple grades on the same voyage, especially where they are loaded from two or three

different ports. The last bullet point of Section 9.1 states, Quantities should be combined for multiple grades on the same voyage, unless a valid compartmental or partial VEF is available

Not using the most recent 20 voyages. If the vessel does not present you with the last 20 voyages ask for this information and if they cannot provide it or the vessel has not performed 20 voyages make a note of this on the report. Please remember that the standard states 20 voyages NOT 20 cargoes. If in doubt ask the vessel as they decide what a voyage is.

Using outdated calculation forms with no Gross Error step. Including voyages where only vessel measurements were available, such as ship to ship transfers or when

the vessel figure with the VEF was used for custody transfer. Not including partial cargoes in the calculation. Partial cargo voyages should be treated in the same way as

full cargo voyages and included in the calculation process unless they exceed the 2% Gross Error threshold. While most people agree that the VEF is not usually applicable to partial cargoes, the VEF working group could not get a global agreement on what percentage of a full load represented a partial cargo so they decided to let the 0.3% of the initial mean ratio be the decider of which partial cargoes go or stay.

Addendum In case anyone missed the Tech Alert, this addendum removed references to sludge / residue build-up in Section 4.4; and, also removed references to the removal of sludge from the vessel prior to dry dock in Section 8.3, third bullet point. These two references were found to be too subjective for practical use and removed; primarily, at the request of the inspection industry. Crib Sheet To help summarize the current standard and provide for consistency in the field, we have produced the following Crib Sheet on calculating a VEF, which we hope will also simplify the process. 1. List the data for as many VOYAGES as are available, up to a maximum of twenty VOYAGES

a. Quantities should be combined for multiple grades on the same voyage .

b. The vessel decides what constitutes a voyage c. Units must be consistent, i.e. Bbls, M3, Metric tons, Long tons, etc. Units cannot be mixed.

2. Calculate individual vessel/shore ratios for each voyage, rounding to five decimal places.

TECH TALK VESSEL EXPERIENCE FACTOR [VEF] OIL, GAS AND CHEMICALS SERVICE MARCH 2014

3. Disqualify any of the following: a. Vessel/shore ratios with a gross error difference in excess of 2 %, in other words all voyages with ratios outside

the range of 0.98000 and 1.02000. b. Disqualify any data from the vessels maiden voyage and first voyage following dry dock. c. Voyages where only vessel measurements were available (i.e. vessel to vessel transfers or conventional loadings

where the ships figures have been used to calculate the Bill of Lading, with or without the application of a VEF).

4. Of the remaining voyages; calculate the Average Vessel/Shore Ratio

from the total remaining quantities.

5. Eliminate any vessel/shore ratios outside 0.30 % from the Average Vessel/Shore Ratio

determined in step 4, above.

6. Using only the remaining qualifying voyages calculate the VEF, if at least five qualifying voyages remain, as follows: a. Calculate total vessel and shore quantities. b. Divide total vessel quantity by total shore quantity. c. Calculate to five decimal places and round to four decimal places the VEF

Notes: If less than five qualifying voyages remain, in step 6, a valid VEF cannot be calculated. Separate VEFs are to be calculated for load and discharge do not mix or combine loadport and discharge port data. Voyage numbers must be listed exactly as specified by the vessel The ships officer should countersign the data as correct on your worksheet Each number recorded should be checked carefully by questioning the ships officer against the criteria listed under

3b and 3c above. Do not assume all data is valid without checking. Data from the vessel must be verified from vessel records

If there is any doubt or confusion regarding the above, refer to the standard, which is the controlling document Conclusion The VEF was developed as a loss control tool in the late 1980s and when used for that purpose is both adequate and useful. Unfortunately, today it tends to be used for custody transfer determination a purpose for which it was not designed and one that does not have the rigor of the traditional calculation processes that are used for custody transfer. As a result of this there is a lot of pressure and scrutiny placed on us when we calculate a VEF. Our only real line of defense is to follow the standard explicitly.

TECH TALK VESSEL EXPERIENCE FACTOR [VEF] OIL, GAS AND CHEMICALS SERVICE MARCH 2014

Minutes of Tech Talk Meeting: Branch:_______________________________ Division: ______________________________ Person Conducting Meeting:__________________________________________________

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The original is to be maintained at the Branch for reference and audit purposes. Data from this form is required as part of your monthly Global QHS&E reporting