IADC criticizes BSEE's compliance expansion to contractors

The International Association of Drilling Contractors expressed concern over the US Bureau of Safety and Environmental Enforcement’s interim policy under which inspectors can cite offshore contractors in addition to well operators for not complying with regulations.

The approach significantly departs from the global practice of holding operators ultimately responsible for wellsite accidents, IADC said on Aug. 17.

“Global government regimes have always held operators responsible,” said Brian T. Petty, IADC’s executive vice-president for government affairs. “This new guidance opens the door to unknown levels of liability for contractors and additional uncertainty for contractors. At a minimum it could increase contractors’ insurance premiums, but it also could potentially eliminate coverage for many companies in the US altogether.”

Under the standard IADC drilling contracts, drilling contractors are already liable to oil companies for any gross and willful negligence, he noted. Additional costs and risk exposure, combined with the possibility for civil penalties and fines, could drive drilling contractors out of the US Gulf of Mexico, he warned.

“Drilling activity is strong around the world, with significant rig demand in areas like Brazil, West Africa, and Asia Pacific,” Petty said. “Drilling contractors could well decide to leave the gulf for places where they won’t have to bear the same risks.”

Contact Nick Snow at nicks@pennwell.com.

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