VENOCO, INC — Warning Letter

520081006w_warning letter_09102008_text.pdf, page 1Official PDFU. S. Department of Transportation Plpellilne and Hazardous Maferlialls Safety Admilnilsfirafiion 12300 W Dakota Ave, Suite 110 Lakewood, CO 80228 WA~IXG KKTTKR September 10, 2008 Mr Keith Wenal Manager Venoco Incorporated 6267 Carpinteria Ave. , Carpinteria, CA 93103 4100 CPF 5-2008-1006W Dear Mr. Wenal On July 23 to 27, 2007, representatives of the Pipeline and Hazardous Materials Safety Administration (PHMSA), pursuant to Chapter 601 of 49 Unites States Code, inspected Venoco Incorporated's (Venoco) Integrity Management Program (IMP) in Carpinteria, California As a result of the inspection, it appears that you have committed probable violations of the Pipehne Safety Regulations, Title 49, Code of Federal Regulations. The items inspected and the probable violations are: $ 192. 911 What are the elements of an integrity management programs An operator's initial integrity management program begins with a framework (see $192. 907) and evolves into a more detailed and comprehensive integrity management, program, as information ils gained and inco~po~ated into the p~ogram. An operator must make continual improvements to its program. The ilniltial program framework andi subsequent program must, at minimum, contain the#

520081006w_warning letter_09102008_text.pdf, page 2Venoco's lMP plan failed to verify that data elements were brought together and analyzed in their context such that integrated data can provide improved confidence with respect to determining the relevance of specific threats and can support an improved analysis of overall risk. g 192. 935 What additional preventive and mitigative measures must an operatoi takeT (1) Third party damage. An operator must enhance its damage prevention program, as required ~nder )192. 614 of this part, with respect to a cove~ed segment to prevent and minimize the consequences of a release due to third party damage. Enhanced measures to an existing damage prevention program include, at a (iv) Monitoring of excavations conducted on covered pipehne segments by pipeHne personneL If an operator finds physical evidence of encroachment invollving excavation that the operator did not monitor near a covered segment, an operator must eithei excavate the area near the encroachment or conduct an above ground survey using methods defined in NACK RP — 0502 — 2002 (incorporated by reference, see $192. 7). An operator must excavate, and remediate, in accordance with ANSI/ASMK 831. 8S and $192. 933 any indication of coating hohdays or discontinuity warranting direct examination. Venoco's lMP plan failed to address preventive and mitigative requirements regarding threats due to third-party damage such as the implementation of enhancements to the required Damage Prevention Program with respect to covered segments to prevent and minimize the consequences of a release#

520081006w_warning letter_09102008_text.pdf, page 3Under 49 United States Code, ( 60122, you are subject to a civil penalty not to exceed $100, 00 for each violation for each day the violation persists up to a maximum of $1, 000, 000 for any related series of violations. We have reviewed the circumstances and supporting documents involved in this case, and have decided not to conduct additional enforcement action or penalty assessment proceedings at this time. We advise you to correct the item identified in this letter. Failure to do so will result Venoco Incorporated being subject to additional enforcement action No reply to this letter is required. If you choose to reply, in your correspondence please refer to CPF 5-ZOO8-]I OO6W. Be advised that all material you submit in response to this enforcement action is subject to being made pubhcly available. If you beheve that any portion of your responsive material qualifies for confidential treatment under 5 U. S. C. 552(b), along with the complete original document you must provide a second copy of the document with the portions you beheve quahfy for confidential treatment redacted and an explanation of why you beheve the redacted inforination quahfies for confidential treatment under 5 U. S C 552(b) Sincerely, ( Chris Hoidal Director, Western Region Pipelme and Hazardous Materials Safety Administration cc: PHP-60 Comphance Registry PHP-500 P Nguyen (0119231)#