AZERI M-I DRILLING FLUIDS THREE YEARS OF WORK WITHOUT LOSS TIME ACCIDENT

Azerbaijan - American JV Azeri M-I Drilling Fluids Ltd (51% SOCAR, 49% M-I Swaco) has worked now for three full years without a Lost Time Accident. General Manager of Azeri M-I Drilling Fluids Ltd, Brian Campbell, stated this at an awards ceremony held at Azeri-MI's Lokbatan site and Barite Production Facility on May 7th.

B. Campbell noted that the plant has manufactured over 80,000 tons of material during this period. Has worked nearly 750,000 hrs and according to industry statistics using the same production rates, suggests that there could have been at least 3 to 4 Lost Time Accidents during this time. Azeri-MI has continued to work safely both offshore and onshore for three years, maintained an excellent safety record without any lost time injuries during this period, and fulfilled the companies aim of ensuring training, protection and safety focus for it's workforce throughout all the JV industrial processes.

B. Campbell congratulated all of Azeri-MI on this fantastic achievement and praised the continuous effort that everyone has put in to raise Azeri-MI's safety standard to this high level. Risk assessments , Advanced Safety Audits and forward Safety Planning are all part of the workforce tool-kit focusing on getting the job done in the safest manner possible.

In a congratulatory message sent by Loren Carroll, CEO, MI LLC, he highlighted the progress of the Azeri M-I JV as a major safety achievement.

Paul Novak, Vice President for M-I Swaco for the CIS Region, noted that top-management of M-I Swaco is proud of the JV's achievements and safe working record. In 1997 when the JV was established there were only a few personnel in the total workforce, in 7 years the company has now grown and developed.

Today the JV has 130 employees working across 3 bases; Lokbatan, SPS and Primorsk, with main office within Baku City. HSE for all the workforce is a part of their every day life. "We do not chase production statistics, if our employees are healthy and working safely, then production will increase automatically without injuries or loss of working time" P. Novak summed up.

The work of the Azeri M-I JV in Azerbaijan combines laboratory and superior technical testing with Barite production, Chemical Drill Cuttings Fixation, Engineering Service provision and the reconditioning and formulation of all fluid types for drilling and completion operations. M-I Swaco Safety Manager for CIS Kenny Burns commented that Azeri M-I is performing as well if not better than many other locations within the company in terms of HSE. He read congratulations from M-I Swaco Global Director of HSE Arthur Leuterman, who expressed his confidence that the JV will continue to improve it's health and safety performance in this challenging operational location.

The JV has made great progress in the introduction of an HSE culture throughout the company and in view of this, Deputy General Manager, Zohrab Salmanov, delivered SOCAR president Natig Aliyev's congratulations to the company's personnel.

According to him, the company's achievements were possible due to the economic reforms conducted by the leadership of the country and assistance rendered by the State Oil Company of Azerbaijan. Today more than 90% of Azeri M-I Drilling Fluids JV personnel are local employees. Z. Salmanov believes the distinctive features leading to the JV success includes the symbiosis of foreign investments, technological improvements and the dedicated local support structure. The company's strategy is to adhere to the highest international standards in the oil and gas industry and the JV's achievements for safety, engineering and health protection are a result of this plan.

The company's operations were described by Z. Salmanov. The JV works twenty-four hours a day in sometimes very difficult conditions and it is essential for the practical skills gained and theoretical knowledge realized through training to be put in to practice. The training provided by the JV is to not only targeted to Azerbaijan standards but to those accepted internationally and particularly in the UK and USA. JV clients, including Oil majors BP, ExxonMobil and Socar as well as many Azeri Government Departments have a significant beneficial influence on the company through their own HSE procedures and safety audits, and by continually working with those companies we elevate our own internal HSE standards.

Z. Salmanov noted that in October 2003 Azeri-MI was accredited with the Environmental Standard ISO 14001 by Lloyds Register (LRQA). Azeri-MI has worked towards this goal since 2001 and constantly reviews and improves HSE performance. Environmental audits are conducted on a bi-annual basis to ensure compliance with these international standards. The JV is introducing more advanced levels of safety and management structures to facilitate the accreditation to ISO 9001:2000 ( quality management standard), aiming for certification by autumn 2004. With further improvements the intention is to achieve accreditation to OSHAS 18001 Occupational Health and Safety Standard.

M-I Swaco company representative Soultan Soultanov noted that today Azeri M-I Drilling Fluids JV serves many companies both offshore and onshore, and provides a comprehensive range of engineering services and supplies for offshore operations including the sole supply of Barite. A major task of the company for the near future is to gear-up for additional service provision for Phases 2 and 3 of the full-scale development of the Azeri-Chirag-Guneshli fields.