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New oil platform safety laws

Author : Amy Hollamby

14 October 2010

Proposals for the first EU-wide laws on oil platform safety and standards are likely early 2011. Following the disastrous explosion of the BP Macondo oil well off the Gulf of Mexico in April, the EU commission is seeking new, strict safety rules for offshore oil drilling.

New oil platform safety laws
New oil platform safety laws

At present overall standards of safety are high but gaps in legislation exist as a consequence of differing standards between countries.

It is important for the EU to have common legislation in place to reduce the risk of an environmental disaster in European waters.
Tighter controls on granting drilling permits, independent supervision of oil platforms and new technical criteria for safety controls - including the kind of "blow-up preventer" believed to have failed in the BP oil disaster in the Gulf of Mexico are needed.

The Commission wants to ensure that firms drilling in European waters can prove it has either the cash in the bank to pay for a clean-up, or appropriate insurance to cover the cost.
The rules could also change that currently make companies liable for costs if they are drilling up to 12 nautical miles from shore. This distance could be extended to 200 nautical miles.
Oil platforms are currently controlled by national authorities, but the Commission wants national supervisory efforts to be evaluated by independent experts.

Common EU rules and standards would help the oil industry – companies would not have to deal with different sets standards depending on where they drill.

However, the British oil industry is not happy with the Commission’s new safety laws. "Not only is the Commission apparently suggesting prescriptive pan-European regulation, but also, it would seem, it wishes these to be applied on a uniform basis outside the EU," said Malcolm Webb, chief executive of Oil and Gas UK.

"There is a suggestion that companies with headquarters in the EU should be required to follow the envisaged prescriptive standards in all their operations worldwide, failing which, regulators might withdraw operators' licences or permits.

"This proposal reflects a fundamental misunderstanding of the distinct and complex nature of operations in different oil basins both within Europe and around the world."

The UK has decades of experience in regulating the offshore regime – including the lessons learned from Piper Alpha over 20 years ago.

Those lessons led to a massive improvement in the regulatory system in the UK and in Europe generally. The UK have a robust, proven, national regime and are not convinced that another layer of regulation would add any additional value.

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