EU states adopt amended offshore oil and gas safety rules

Out-Law News | 12 Jun 2013 | 9:45 am | 2 min. read

Minimum European Union requirements governing the safety of offshore oil and gas installations are set to come into force after approval by EU member states.

The agreement was welcomed by the UK Government and oil and gas industry, both of which had lobbied against the European Commission's original proposals to legislate using a directly-applicable regulation. Member states will be able to decide for themselves how best to implement the minimum requirements of the new Offshore Safety Directive (120-page / 371KB PDF) into their national laws.

"Safety and environmental protection are essential to the success of the oil and gas industry and as Europe's leading oil producer, the UK has been at the cutting edge of lobbying and drafting this new piece of legislation," said Energy Secretary Ed Davey.

"We particularly welcome the fact that the EU has chosen a directive to implement this legislation. From the outset we have strongly argued that forcing the UK to rip up decades' worth of legislation and guidance would have been counterproductive to the EU's objectives," he said.

The new rules were also welcomed by industry body Oil and Gas UK, which said that the new directive complemented "the world-leading health, safety and environmental standards already in place in the North Sea that were developed from the lessons the industry learned" as a result of the 1988 Piper Alpha explosion.

The European Commission proposed the creation of a unified offshore safety regime following the Deepwater Horizon accident in the Gulf of Mexico in 2010. However, control of installations varies widely across the EU, with almost half of the nearly 1,000 offshore oil and gas installations in operation located in UK-controlled waters. Italy, the Netherlands and Denmark operate a number of facilities, while nine other states have either a minimal offshore drilling presence or have been awarded licences to do so.

The Offshore Safety Directive establishes minimum conditions for safe offshore exploration and exploitation of oil and gas, and provides for improved response mechanisms in the event of a major accident. It also intends to reduce the impact of an accident on the environment by requiring companies to provide evidence that "adequate provision" has been made to cover their potential liabilities as a precondition to having a licence for an offshore installation granted.

Under the directive, only operators appointed by licensing authorities or license holders will be able to conduct offshore oil and gas operations. Licensing authorities must be independent, with a clear separation between regulatory oversight of economic development and that of offshore safety and environment.

Drilling companies will have to provide national authorities with a copy of their major accident prevention policy before beginning works, and outline potential major hazards for that particular installation and what special measures they are adopting to protect workers. National authorities will also have to prepare external emergency response plans covering all offshore drilling installations within their jurisdiction. Transparency and cooperation provisions contained in the new rules will allow for the sharing of emergency response plans between member states.

The directive will take effect 20 days after it is published in the Official Journal of the EU. Member states with offshore waters will have two years to implement the provisions, while landlocked countries will only have to do so once a relevant company registers there and conducts operations outside the EU. Only a limited number of the directive's provisions will apply to landlocked states, and those with offshore waters that have no offshore activities.