EU reaches preliminary agreement on offshore oil, gas safety directive

The European Union reached preliminary agreement Feb. 21 on toughened rules for offshore oil and gas operations although the proposed directive has yet to be formally approved by EU member countries and the European Parliament.

EU Commissioner for Energy Gunther Oettinger said he welcomed “this major step enhancing the safety of offshore oil and gas production in the EU. Past accidents have shown the devastating consequences when things go badly wrong offshore.”

Legislation outlining the updated offshore safety standards is expected to be formally approved in coming months and implemented 2 years after being approved, EU officials said.

The proposed rules were prompted in part by the April 2010 deepwater Macondo blowout in the Gulf of Mexico and the resulting massive oil spill in the Gulf of Mexico off Louisiana.

The Macondo blowout resulted in an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible drilling rig, killing 11 people. The semi, which later sank, was used to drill the Macondo well for BP PLC and its partners.

Some EU rules applying to offshore oil and gas safety are 20 years old, EU officials said, and they have been working on a centralized approach to offshore safety regulation (OGJ Online, Nov. 4, 2011).

Previously, operators working offshore Europe requested that upgraded offshore safety measures take the form of a directive rather than a regulation (OGJ Online, Oct. 9, 2012).

Robert Paterson, Oil & Gas UK’s health, safety, and employment director, said his organization as “worked tirelessly to highlight the very real damage that an EU regulation could have done to workers’ safety. The commission’s decision today to establish a directive on offshore safety is the best way to achieve the objective of raising standards across the EU to the high levels already present in the North Sea.”

Paterson said the UK oil and gas industry looks forward to working with the commission “to ensure the directive is appropriately worded.”

EU seeking highest safety standards

Oettinger said recent 'near-misses' in EU waters are a reminder of the need for a stringent safety regime.

“These rules will make sure that the highest safety standards already mostly in place in some member states will be followed at every oil and gas platform across Europe,” Oettinger said. “Furthermore, the new law will ensure that we react effectively and promptly in the event of an accident and minimize the possible damage to the environment and the livelihoods of coastal communities."

The EU has more than 1,000 oil and gas platforms, mostly in the North Sea. The UK and Netherlands already have offshore safety regulations.

The main elements of the preliminary EU directive:

• The directive introduces licensing rules for effective prevention of and response to a major accident. The licensing authority in member states will have to make sure that only operators with proven technical and financial capacities are allowed to explore and produce oil and gas in EU waters. Public participation is expected before exploratory drilling starts in previously undrilled areas.

• Independent national competent authorities responsible for the safety of installations will verify the provisions for safety, environmental protection, and emergency preparedness of rigs and platforms and the operations conducted on them. Enforcement actions and penalties will be implemented if companies do not respect the minimum standards.

• Obligatory emergency planning calls for companies to prepare reports on major hazards, containing an individual risk assessment and risk-control measures, and an emergency response plan before exploration or production begins. These plans will need to be submitted to national authorities.

• Technical solutions presented by the operator need to be verified independently prior to and periodically after the installation is taken into operation.

• Companies will publish on their websites information about standards of performance of the industry and the activities of the national competent authorities. The confidentiality of whistle-blowers will be protected. Operators will be requested to submit reports of incidents overseas to enable key safety lessons to be studied.

• Companies will prepare emergency response plans based on their rig or platform risk assessments and keep resources at hand to be able to put them into operation when necessary. EU member states will likewise take full account of these plans when they compile national emergency plans. The plans will be periodically tested by the industry and national authorities.

• Oil and gas companies will be fully liable for environmental damage caused to the protected marine species and natural habitats. For damage to waters, the geographical zone will be extended to cover all EU waters including the exclusive economic zone (about 370 km from the coast) and the continental shelf where the coastal member states exercise jurisdiction. For water damage, the present EU legal framework for environmental liability is restricted to territorial waters (about 22 km offshore).

• Offshore inspectors from member states will work together to ensure effective sharing of best practices and contribute to developing and improving safety standards.

• The EU Commission will work with its international partners to promote the implementation of the highest safety standards across the world. Operators working in the EU will be expected to demonstrate they apply the same accident-prevention policies overseas as they apply in their EU operations.

Contact Paula Dittrick at paulad@ogjonline.com.

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