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EU takes a “Europe-wide approach” to offshore oil, gas safety

Licensees must have enough capital to handle disaster

March 26, 2013
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oil rigThe European Commission, the Council and the European Parliament have reached agreement on a new Directive that addresses the risks of major accidents from offshore oil and gas operations in EU waters.    

As a Directive, the agreement must be incorporated into national legislation. The difference in format is significant in jurisdictions such as the UK, which already has a comprehensive safety regime in place for offshore operations.

Included in the agreement:

  • Extending EU environmental liability legislation to cover significant impacts to marine water quality in all EU offshore waters (not just to damage within the 12 mile zone)
  • A requirement for operators to prepare major hazard reports addressing both environmental and safety considerations
  • A requirement that the oversight of environment and safety compliance is independent of decisions on license awards, and
  • A strengthened requirement for licensing authorities to take account of all potential liabilities that might be expected to flow from a major accident when deciding whether potential licensees have sufficient financial capacity to meet their obligations in the event of a disaster

The International Association of Oil & Gas Producers (OGP) called the Directive a positive step that “takes a Europe-wide approach to ensuring high standards of safety,” while maintaining the flexibility that the oil and gas industry requires for its operations.

"The Directive is founded on the proven ‘goal-setting approach’ which has been developed over the past 20 years by the countries around the North Sea,” according to a statement by OGP. “This is a key concept for a robust safety regime that will strengthen the EU’s indigenous offshore oil and gas production."

Some areas of concern remain. These include requirements around managing risk and the reduced implementation period and will have to be addressed to provide clarity for operators and national regulators.

The agreement has not yet been finalized.

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