Background
On 21 February 2013, the European Parliament announced a provisional deal between MEPs and Council on proposed legislation for the safety of offshore oil and gas operations. The European Parliament and the Council is expected to approve a Directive this summer. Member States will have two years to implement the proposed Directive.
Main article
Following disasters such as Deepwater Horizon in the US in 2010 (11 killed), Montara in Australia 2009, Usumacinta in Mexico in 2007 (22 killed), the European Commission (the "Commission") undertook a gap analysis on offshore practices and the legislative framework in the EU. The proposed Directive is a culmination of the Commission's work.
The Commission had recommended EU regulation that would have direct effect across the 27 members once approved. Following negotiations, the European Parliament and the Council is expected to approve a Directive this summer. Member States will have two years to implement the proposed Directive.
The main elements of the Directive are:
- the requirement that the decision on granting licences for offshore oil and gas operation takes into account the capacity of the applicant to ensure safety of the offshore operation and environmental protection;
- early and effective public participation prior to a decision to start exploration drilling in previously undrilled area. We note that it is still unclear how this requirement will interact with the requirements of Aarhus Convention and General Court of the Court of Justice of the European Union and UK Court's interpretation of the requirement of the Convention;
- the establishment of an independent national competent authority responsible for the safety of operations, assessment of the Major Hazard Reports and overseeing compliance of the Directive. It is likely that in the UK this role will be undertaken by the HSE;
- the requirement to submit reports on major hazard for installation. These reports are likely to contain individual risk assessment, risk control measures and an emergency response plan before exploration or production begins. Well and combined operations may not be undertaken unless the Major Hazards Report for the installation has been accepted by the national competent authority. It is unclear whether all or part of the report would be disclosed under the Environmental Information Regulations 2004; and
- the requirement that operators will be fully liable for environmental damage.
Further details of the proposals can be found at:
http://europa.eu/rapid/press-release_IP-13- 149_en.htm
Attached is the consolidated version of the draft Directive (Approval of the final compromise text) published in the Council Register.
The proposed Directive is likely to increase regulatory and reporting burden on operators. There is also uncertainty about the implementation of the Directive. Industry members have previously criticised the lack of interpretative guidance. We note that in the UK, the industry and HSE (after Piper Alpha) together developed guidance to accompany the new regulatory regime to ensure shared understanding – before the current regulations came into force.
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