Cyprus: Offshore Oil Drilling, Gas Exploration And Production On Activities In The EU

Last Updated: 22 December 2011
Article by Christos Floridis

Most Read Contributor in Cyprus, December 2017


Environmentally sustainable management at an international level requires reliable information on the natural environment, as well as sharing of knowledge on the social, economic, legal and political systems. Environmental impacts of human activities on the deep sea floor are of increasing international concern.

For instance, the Arctic oil drilling plans are not adequate to face and clean up a major spill in the area, raising environmental health concerns about the potential consequences of a spill to the ecosystem. Further, the consequences of the crude oil gushing into the Gulf of Mexico, on 27 May 2010, after the explosion of BP's Deepwater Horizon oil rig, should not be repeated and offshore oil and gas operations need to be strictly regulated in order to avoid further detrimental impacts.

On the other hand, due to demonstrated negative results of studies on the offshore working conditions and the human impact on offshore oil activities, EU legislation should implement precautionary measures into the petroleum and gas industries. The factors promoting sickness presenteeism on board the platforms need to be restrained, in order to ensure healthy environmental working conditions.

Major offshore disasters in the last three decades and the likelihood of accidents in the sector with possible consequences provoking fatalities, environmental damage and collateral damage to coastal and massive livelihoods, intensified the need on elaborating an effective and efficient risk management system in offshore oil and gas operations.

The situation requires action to reduce the risks, ensure effective response to major incidents and foresee quick recovery of the affected regions and businesses.

With respect to the safety of offshore oil and gas operations, the EU faces a threefold problem which consists of a major offshore oil or gas accident risk occurring in EU waters. The existing regulatory framework, industry practices and operating arrangements do not provide for all achievable deductions in the risks, as well as to accidents that may occur throughout the EU.

Justification for EU action

In line with the subsidiarity principle, EU action can be considered only where it can intervene and realise the objectives more effectively that the Member States. Industry has the primary responsibility and the means to control offshore risks. Nevertheless, there is urgent need of reducing the risk of a large offshore accident and therefore, a complementary action by public authorities will have to take place.

The regulatory approach should cover, not only the North Sea, but also the Mediterranean, the Black and the Baltic Seas.

Further, the principle of proportionality has been ensured by assessing the effectiveness, costs and benefits of EU action to achieve the desired outcome.

In parallel, EU implication could drive progress and ensure compliance through the efficient coordination and regulation of Member States' policies. This could lead to effective international measures and solutions to be adopted, as the matter regards the sphere's environmental balance.

Policy objectives and options assessment

The EU initiative targets two general objectives; firstly to prevent a major incident from occurring in EU offshore oil and gas exploitation with a major emergency in case preventive measures should fail.

These general objectives are divided into four measures: to ensure a consistent use of best practices for major hazards control by oil and gas industry offshore operations potentially affecting EU waters or shores, to implement best regulatory practices among EU jurisdictions, to strengthen EU's preparedness and response capacity to deal with emergencies affecting EU citizens, economy and environment and improve existing EU liability as well as compensation provisions.

The policy options which can be envisaged and be developed, contain a package of measures dealing with regular inspections and penalties, formal safety assessments for acceptance by the regulator, extension of the Major Hazards Report (MHR) to a comprehensive management model, product safety, financial capacity guarantees, a platform for regulatory dialogue as well as compensation schemes for traditional damages. Further, the measures foresee a cross border availability and compatibility of intervention assets, preparedness for effective emergency response to major offshore accidents, extension of EU practices to overseas operations as well as the establishment of a competent authority.

Existing EU legislation in the area of the proposal

The absence of specific offshore oil and gas legislation in EU level is partially completed by EU legislation covering broader sectors of the Union.

The Environmental Liability Directive (ELD) 2004/35/EC regards liability for damages to the environment also in connection with offshore oil and gas. The operator of activities causing significant environmental damage to protected species, natural habitants or water is strictly liable to prevent and remedy the damage and bear the full cost of it. The regulation proposal expands the territorial applicability of the Directive to marine waters under the jurisdiction of the Member States.

The Directive 85/337/EEC and its amendments regarding the environmental impact assessment of certain public and private projects' effects, introduce general minimum requirements. The Waste Framework Directive 2008/98/EC applies fully to oil spills, as already upheld by the CJEU.

Further, the Framework Directive 89/391/EEC and 92/91/EEC refer to the protection of offshore workers and their working environment. The regulation proposal establishes a general system of control as well as a notification scheme and requires independent verification of critical risk control elements.

The Seveso Directive 96/82/EC does not apply to the offshore sector and can only be used as a good practice example in the area. Nevertheless, Directive 94/22/EC regarding hydrocarbon prospection, exploration and production authorisations sets out the principle legal framework for granting licenses for exploration and production. This strengthens the obligations of the relevant authorities improving this way the assessment of the technical and financial applicants' capacities.

Last, the EU Civil Protection mechanism (Council Decision 2007/779/EC), the Monitoring and Information Center (MIC) and the European Maritime Safety Agency (EMSA) are the EU tools to be coordinated, in order to strengthen EU capacities and Member States' compliance with the new measures regarding offshore oil and gas operations.

Budgetary implication

The budgetary implication of the proposal is approximately €2.5m in the period 2013-2016 including compensations for committee participation. The European Maritime Safety Agency's (EMSA) assistance is primarily related to the use of a satellite surveillance system and the use of emergency vessels organized by EMSA.

Control of major hazards

A prevention policy for major accidents will be set out in a document in order to ensure its implementation throughout the organisation of their offshore operating including the setting of appropriate monitoring arrangements to assure effectiveness of the policy.

Operators, on the other hand, shall describe their organisational arrangements for control of major hazards in a safety management system. The policy and safety management systems shall be prepared in accordance with EU requirements. Meanwhile, operators shall establish and regularly consult with the representatives of the relevant Member States, the industry priorities for preparing and/or revising standards and guidance for best practice in control of offshore major accident hazards throughout the lifecycle of offshore operations.

The competent authorities shall proceed to the execution of any suitable arrangements in order to ensure the independence from conflicts of interest between regulation of safety and environmental protection, in particular licensing of offshore oil and gas activities. The whole established policy and the relevant notifications demanded for the inspection investigation and enforcement of the major hazard aspects of the offshore oil and gas operations should comply with the European Regulation. Non compliance with Regulatory provisions shall lead to the suspension of the operation and the necessary measures shall be adopted followed by notification of the competent authority.

Transparency and sharing of information.

A new system will be established aiming at the efficient sharing of information among operators and competent authorities. Further updated records shall be available by both public and private entities. A company publication format will enable cross-border comparison of data regarding national operations and regular practices.

In case of a major accident, the operator shall notify immediately the competent authority with relevant information including the circumstances of the accident and its consequences. Thorough investigations shall be conducted in Member States followed by recommendations of the competent authority.

Coordination and cooperation.

The new regulation foresees measures regarding the effective cooperation between Member States through exchange knowledge, information and experience. It focuses especially on the functioning of the risk assessment, measures on accident prevention, compliance verification and emergency response related to offshore oil and gas operations within the Union, as well as beyond its borders where appropriate.

Clear priorities and procedures need to be established in order to identify and facilitate the implementation of the best practices in the area. Moreover, the Commission will promote cooperation with third countries that undertake offshore oil and gas operations in the same marine regions as Member States. In parallel, the Commission will assess the safety of oil and gas operations in the matters of the third countries adjacent to waters of Member States and will support a coordinated approach to mutual exchange of experience and the establishment of preventative measures and regional emergency response plans and high safety standards at international level.

The United Nations, the Regional Seas conventions and organisations, as well as the European Union, are developing marine environmental policies and monitoring and reporting procedures in order to confront this major issue.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions