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A method for classifying hazardous areas for the selection of safe electrical equipment and installations, related to the petroleum and chemical industries, is described. In determining the nature (Division 1 or 2) and the extent (boundaries) of a classified area, the accepted practice is to use the recognized industry codes. However, the codes do not answer all the problems and refer to the use of ``sound engineering "judgment" as a means for final determination of the nature and extent of the hazards. The basic applications and interpretations of the industry codes are defined in a step-by-step approach showing how essential experience and judgment are in applying the basic principles. A detailed practical example with worksheet is used to illustrate the basic application in conjunction with sound engineering experience and judgment, followed by a flow sheet summarizing the step-by-step method.