Offshore oil and gas operations: financial liability for all operators

lickforkabsorbingOil and Offshore

Nov 8, 2013 (3 years and 9 months ago)

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Press Release - (Committee on Industry, Research and Energy (ITRE) 21. 02. 2013

Offshore oil and gas operations: financial liability for all operators

A provisional deal on proposed legislation on the safety of offshore oil and gas operations
was struck by MEPs and Council negotiators on Thursday. Before oil and gas firms
could get a licence to drill, the directive would require them to submit major hazard
reports and emergency response plans and prove their ability to remedy any
environmental damage caused.

"Europe learned its lessons from the Deepwater Horizon catastrophe and wants to reduce the
risks of offshore oil and gas drilling to a minimum. Especially now that several member states
are exploring new drilling operations, we need an efficient legislative framework. The
previous directive is nearly 20 years old and does not guarantee the safety of offshore drilling
operations in an adequate manner", said Ivo Belet (EPP, BE), who led the negotiations.

This agreement ensures an EU legal framework that will help us to prevent offshore accidents
in our seas and ensure rapid intervention which will limit potential damage", said Energy
Committee Chair Amalia Sartori (EPP, IT).

Financial ability to remedy all damage caused

All operators would need to ensure they have access to "sufficient physical, human and
financial resources to minimise and rectify the impact of a major accident". No licence would
be granted unless the applicant has provided evidence that "adequate provision has been or
will be made to cover liabilities potentially deriving from its offshore oil and gas operations".

In particular, when assessing the applicant's technical and financial capability, due account
would be taken of their ability, including any financial security, to cover liabilities. These
would include "liability for potential economic damage where such liability is provided for by
national law".

Major hazards report and major accident policy

Drilling companies would be required to submit to the national authorities a special report,
describing the drilling installation, potential major hazards and special arrangements to protect
workers, before starting operations. EU Member states would require operators to prepare a
document setting out their "corporate major accident prevention policy" which would
guarantee inter alia an open reporting culture for incidents, consultation with elected safety
representatives and protection for whistleblowers.

Internal and external emergency response plans

Companies would also have to provide an internal emergency plan, giving a full description of
the equipment and resources available, action to be taken in the event of an accident and all
arrangements made to limit risks and give the authorities early warning.

At the same time, EU member states would have to prepare external emergency response
plans covering all offshore drilling installations within their jurisdiction. These plans would
specify the role and financial obligations of drilling companies as well as the roles of relevant
authorities and emergency response teams.

Why a directive?

Although the Commission's initial proposal referred to a "regulation" (which would be directly
binding upon all member states), negotiators for Parliament and the Council agreed to
recommend adopting a directive (which lays down ends, but leaves means to member states)
instead, in order to avoid redrafting existing equivalent national laws.

Application and transposition

Member states with offshore waters that have no offshore oil and gas operations under their
jurisdiction, and landlocked countries with companies registered in their territories would need
to apply only a limited number of this directive's provisions. Member states would have two
years to transpose the directive into their national laws.

Next steps

The provisionally agreed text which still needs to be adopted formally by COREPER will be
put to an Energy Committee vote, probably in March, and then a plenary one in May
(provisional timetable).

LINKS


Committee on Industry, Research and Energy
http://www.europarl.europa.eu/activities/committees/homeCom.do?language=EN&body=ITRE


Profile of rapporteur Ivo Belet (EPP, BE)
http://www.europarl.europa.eu/meps/en/28257/IVO_BELET.html


Parliament's resolution on facing the challenges of the safety of offshore oil and gas activities
(13.09.2011)

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2011-
0366+0+DOC+XML+V0//EN&language=EN


Contacts

Kristina ELEFTERIE
(+32) 2 28 32798 (BXL)
(+33) 3 881 74651 (STR)
(+32) 498 98 32 83
indu-press@europarl.europa.eu


Twitter: @EP_Industry