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July 15, 2010

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BP disaster raises potential of tighter offshore safety legislation

Oil and gas companies operating offshore in Europe could be forced to abide by new and tougher safety laws if moves underway at the European Commission bear fruit.

The possibility of changes to the current regulatory system for offshore operations has been raised by the BP Deepwater Horizon disaster in the Gulf of Mexico.

At a meeting on 14 July between representatives of the oil and gas companies and EU Energy Commissioner Gunther Oettinger, the latter refused to budge on his conviction that there should be a total freeze on new permits for oil-exploration drilling until the causes of the Deepwater Horizon incident are known, and corrective measures have been implemented.

Speaking at a plenary session of the European Parliament on 7 July, Commissioner Oettinger outlined his concerns about the current legislative approach and stressed that the industry “must maintain a 100-per-cent safety-first policy”.

While conceding that current legislation governing offshore companies addresses “a wide range of risks and challenges”, he underlined that there is scope for improvement. “Existing legislation could be made clearer and up to date,” he said. “Be assured that, if proven necessary, we will not hesitate to come up with legislative initiatives in the coming months.”

The commissioner continued: “Operational matters, as well as regulatory issues, will be examined. On the latter, I would like to be certain that the EU’s standards are set at the highest possible level in order to maintain the most stringent regime in the world. Similarly, I want to get the assurance that controls are effective. In this respect, I would not hesitate to propose a European framework for ‘controlling the controllers’, if need be.”

He went on to outline five areas for action:

  • imposing a moratorium on new drills until the causes of the Deepwater Horizon accident are known and corrective measures are taken for such frontier operations;
  • reinforcing existing levels of prevention not only through robust authorisation regimes but also thorough checks and controls;
  • completing a stress test on existing legislation to identify possible weaknesses, gaps, or room for improvement;
  • considering how control and disaster intervention mechanisms can be enhanced; and
  • joining forces with partners to strengthen existing international and regional standards.

The commissioner said concrete proposals will be set out in the coming months.

Mr Oettinger’s unwavering stance on a total ban on new permits for drilling and his desire for possible new rules on offshore activities brought an angry reaction from UK stakeholders. Chief executive of Oil & Gas UK, Malcolm Webb, said: “In the UK, our regime for safety is clearly more advanced than that applying in the United States. It is controlled by highly technically-competent and professional regulators. The idea that the European Commission should be seeking to control the affairs of the UK Offshore Safety Division quite frankly concerns me.

“Furthermore, given that the cause of the incident in the US is still unclear, the rush to judgement and the suggestion of a moratorium on drilling in UK waters is, in my view, wholly unwarranted.”

Webb’s comments were echoed by SNP member of the European Parliament, Alyn Smith. “This is disappointing news from the commissioner,” he said. “The Gulf of Mexico incident is a reminder to all that there is no room for complacency and safety must come first. However, for him to compare lax US standards with the tightly-regulated industry in the North Sea is simply missing the point.”

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