Q&A. Commission proposes new rules on the
safety of offshore oil and gas activities
Why do we need a specific EU
Offshore accidents do not know borders. If a
similar accident to the Gulf of Mexico were to
happen in EU waters, this could have serious
effects for the Member State concerned but also
for neighbouring States. With the EU-level
legislation the highest safety standards already
followed in some Member States will be made
mandatory everywhere across Europe. And
currently the offshore industry in different
Member States operates to different
environmental, health and safety standards.
What is new in the Regulation?
The Regulation introduces clear rules for
effective prevention and response of a major
Licensing. The licensing authority in the
Member States will have to make sure that only
operators with proven technical and financial
capacities necessary to ensure the safety of
offshore activities and environmental protection
are allowed to explore for, and produce oil and
gas in EU waters. Public participation is
foreseen in licensing.
Obligatory ex ante emergency planning
Companies will have to prepare a Major Hazard
Report for their installation, containing a risk
assessment and an emergency response plan before
exploration or production begins. These plans
will need to be submitted to national
authorities who will give a go-ahead.
Independent verifiers The technical solutions
presented by the operator that are critical for
safety on the installation need to be verified
by an independent third party prior to and
periodically after the installation is taken
Inspections. Independent national competent
authorities responsible for the safety of
installations will verify the provisions for
safety, environmental protection and emergency
preparedness of rigs and platforms and the
operations conducted on them. If companies do
not respect the minimum standards, Member States
will take enforcement actions and/or impose
penalties; ultimately, operators will have to
stop the drilling or production operations.
Transparency. Comparable information will be
made available to citizens about the standards
of performance of the industry and the
activities of the national competent
authorities. This will be published on their
Emergency Response. Companies will prepare
emergency response plans based on their rig or
platform risk assessments and keep resources at
hand to be able to put them into operation when
necessary. Member States will likewise take full
account of these plans when they compile
national emergency plans. The plans will be
periodically tested by the industry and national
Liability. Oil and gas companies will be
fully liable for environmental damages caused to
the protected marine species and natural
habitats. For damage to waters, the geographical
zone will be extended to cover all EU marine
waters including the exclusive economic zone
(about 370 km from the coast) and the
continental shelf where the coastal Member State
exercises jurisdiction. For water damage, the
present EU legal framework for environmental
liability is restricted to territorial waters
(about 22 km offshore).
International. The Commission will work with
its international partners to promote the
implementation of the highest safety standards
across the world.
EU Offshore Authorities Group. Offshore
inspectors of Member States will work together
to ensure effective sharing of best practices
and contribute to developing and improving
Is the Commission taking any other action, in
addition to the proposed legislation?
In conjunction to this legislative proposal,
the Commission is putting forward a proposal for
the EU to accede to a Protocol of the Barcelona
Convention that protects the Mediterranean
against pollution from offshore exploration and
exploitation activities (see IP/11/1261).
In addition, the Commission is finalising an
electronic guidance document on waste law which
will include a section clarifying that, in
accordance with the European Court's
jurisprudence, oil spills are considered as
waste under the EU waste legislation, with the
resulting "polluter pays" consequences for the
management of such waste to the waste producer.
How is an improved safety standard guaranteed?
The regulation does not establish a
check-list of minimum technical requirements.
Such a list may become out-dated as the
technology evolves or as offshore explorations
and drillings moves into more challenging areas.
Instead, the regulation takes a goal-setting
approach, focusing on what needs to be achieved
in terms of safety for each particular
installation or operation. This new approach
will lead to a European risk assessment that
upgrades continuously by taking into account new
technology, new know-how and new risks.
Have you learnt from the Gulf of Mexico? Will
new EU rules prevent what went wrong there?
One of the main lessons from the Gulf of
Mexico is that safety is not primarily about the
rules that have been created but about how
rigorously they are followed.
In the case of the Deepwater Horizon rig,
several failures coincided according to analyses
available to date. It is already clear that the
blowout Preventer (BOP) on the well failed when
it was activated in an attempt to stop the flow
of hydrocarbons. The new law will require that
operators ensure that all hazards are assessed
and controlled and that they are ready to
mitigate the effects should these hazards
Likewise, in the case of Deepwater Horizon, it
took several months to design and drill a relief
well to stop oil leaking into the sea water. The
current legislative proposal has provisions for
the submission of contingency plans by the oil
and gas companies. These contingency plans
should specify which equipment is available to
contain and stop the flow of hydrocarbons from a
Another learning point from the Deepwater
Horizon incident is the fact that critical
changes in the design of the Macondo well were
not assessed and reviewed by companies involved
in the project. The new proposal will make sure
that operators have procedures in place to
assess these changes (e.g. in an installation or
in the design of a well) and be able to minimise
Further investigation into the causes of the
Deepwater Horizon accident are planned to be
completed in 2012. They will be reviewed by the
Commission and the safety rules will be updated,
Have similar accidents happened in the EU?
Similar accidents in the EU are: Alexander
Kielland in Norway (1980, platform capsized, 123
deaths), Piper Alpha in the UK (1988, platform
exploded, 167 deaths). Investigations have shown
that in the last 31 years (1979 – 2010), there
have been at least seven other major disasters
Apart from these accidents, there have been a
large number of lesser incidents that could have
escalated into a major accident if conditions
had been different: Forties Alpha platform in
the UK (2003, explosion as a result of a gas
line rupture, no casualties) and the Gullfaks C
platform in Norway (2010, well control lost, no
What is checked before approval to operate or
explore is given?
The operator that intends to start offshore
operation needs to submit a Major Hazard Report,
i.e. a risk assessment of the operation to the
competent authorities to ensure that the plans
of operations, installations and equipment used
are adequate. A major hazard report contains a
risk assessment and factual information about
the installation that is to be operated in
particular conditions. The risk assessment also
identifies critical components which are crucial
for the safety of the installation.
The operator is also required to prepare an
emergency response plan which is part of the
Major Hazard Report before addressing the risks
These plans have to take into account all
relevant aspects, including technical details of
operations and also local environmental and
No installation can be operated without these
reports and competent authorities can request it
to be updated at any time. Operator will have to
submit the Major Hazard Report to the competent
authority which will then asses the report and
give its binding opinion. This is a
pre-condition for operations to start or to
continue. Operators have to submit updated
reports at least every 5 years.
Who checks that all safety measures are in
Operators are responsible for the safety of
their installations. The national Competent
Authorities are the ones who have to check
whether companies’ risk assessments and
emergency plans are in order. They also perform
inspections on site to see whether all the
safety rules are followed.
All equipment which is relevant to the safety of
an installation needs to be assessed by an
independent third party. The independent
verifier will also need to look in to the
measures that the operator has established to
ensure that the equipment and systems critical
for safety are adequate and implemented.
Findings on these safety measures verified by
the independent third party must be made
available to national competent authorities.
Who are the independent verifiers?
The verifiers are organisations independent
from the operator or owner of the installation.
Verification is done typically by companies
which are also specialised in maritime transport
safety. Approximately 10 companies in the EU
already conduct safety assessments for ships
which are requested under EU transport
legislation (Regulation 391/209/EC).
The legislative proposal specifies requirements
for third party verification prior to starting
operations and also for continuous verification
Independent verifiers do not check the safety of
the operations. The operator and/or the owner of
the installation is responsible for this, which
will be in turn verified by the competent
authority of the Member States.
Will there be penalties for non-compliance with
the safety rules?
Yes. Member States will have to put in place
an enforcement and penalty system.
Can an installation with a valid permit be
closed if safety standards are not respected?
Yes. In case of serious breach of safety
standards, an operator may be required by the
competent authority to stop the drilling or
What happens in case of an accident?
The immediate response will come from the
company working at the well or on the
installation, which is required to have
equipment and procedures ready on the offshore
installation itself. The company will also start
using the additional resources that are ready
for deployment on shore.
Where it will not manage to regain control over
the installation or well, the national emergency
plans will be applied. The emergency plans
prepared in advance cover both on-site and
off-site response to make sure that all
necessary equipment is available.
What is environmental and civil liability?
Environmental liability is the liability for
damages to protected species and natural
habitats, for water damage and for land damage.
Civil liability ('traditional liability') is the
liability for costs incurred by individuals (or
groups) as a consequence of the incident,
typically loss of income in coastal communities
(e.g. when tourism is affected) and local
economies (e.g. when fishing is affected).
Civil liability remains within the
responsibility of the Member States which would
make sure that those affected by the accident
are remedied for the damages.
Who will be liable for environmental damage
The licence holder will be fully liable for
environmental damages, whatever the costs. The
financial capacity of the licence applicant will
be assessed before the licence is awarded to
ensure that their finances are sufficiently
robust to cover intended operations. In
addition, there are financial guarantees in
certain Member States.
What kind of information will be made public?
Member States will have to make public the
results of inspections. The Commission will
publish reports on the safety of offshore
operations in EU waters every two years.
Which EU countries undertake oil drilling?
Out of the nearly 1000 offshore
installations operating in the EU, 486 are in
the UK, 181 in the Netherlands, 61 in Denmark, 2
in Germany, 2 in Ireland, 123 in Italy, 4 in
Spain, 2 in Greece, 7 in Romania, 1 in Bulgaria
and 3 in Poland. Drilling operations have
recently started in Cyprus. In Malta, offshore
licences have been awarded. Some exploration
wells have been drilled, but currently there are
no offshore activities in Maltese waters.
How many oil platforms will be covered by new
environmental liability rules when we extend the
environmental liability to 370 km offshore?
By extending the geographical zone for water
damage from the 12 nautical mile zone to the
Exclusive Economic Zone, Member States (370 km)
will ensure that all installations are covered.
Previously, only installations in MS coastal
waters were considered liable for water damage,
which accounts for only a fraction of the total
number of installations.
Are there rigs in European waters being as deep
as Deepwater Horizons?
Out of the 12 European Economic Area (EEA)
countries with offshore operations, only Norway
reports to have operating offshore activities in
water depths of up to 1,300 meters. However,
many countries want to follow Norway's example:
In the UK, to the west of the Shetlands,
exploration is planned at depths of up to 1,600
meters, and near the Faroe Islands at a sea
depth of 1,100 meters. Romania has awarded a
licence for drilling in the Black sea, at a
water depth of 1,000 meters.
In Libyan waters in the Mediterranean, wells
were drilled at 1,500 meters and above, but
drilling is also planned in water depth
exceeding 2,000 meters. In Egypt, wells are
planned in waters up to 2,700 meters.
Why does the depth matter?
As divers can only operate in a maximum
depth of 200-250 meters, intervention in deeper
waters in case of accidents become more
difficult. In depths of 1000 meters, the
pressure is such that even rescue work with
remote control is difficult.
In addition, when drilling in deeper waters, the
blowout preventer (BOP) on the well is
positioned on the sea bed in stead of on the
drilling installation itself, as is the case
when drilling wells in shallower waters. As a
result, maintenance and inspection of these
BOP's will be more difficult.
A further complicating factor when drilling in
deeper waters is that the drilling installations
used are not standing on the sea-bed but are
floating on the sea surface. This will require
continuous positioning of the installation over
the well or anchoring of the installation to the
How much do offshore accidents cost in financial
In the impact assessment performed prior to
submission of the legislative proposal, it is
estimated that the cost of a major accident in
EU waters is in the range of €205 - €915 million
per year. This range is based on accident
statistics regarding wells and blow-outs and
reported costs related to property damage and
clean-up of oil spills.
Who will cover the costs of the new safety
Industry has the primary responsibility for
the safety of all of its operations and has to
take care of the costs involved. Member States
will have to cover the costs for the
establishment of national competent authorities.
When will the new requirements take effect?
The new requirements will be applicable to
new installations and operations immediately
after the adoption of the new Regulation by the
Council and the European Parliament.
Transitional periods of a maximum of two years
are foreseen for existing installations.
The new rules could then enter into force in
2014 for existing production installations. For
planned production installations there is a
transition period of one year which means that
the rules could apply from 2013 on. For
non-production installation (e.g. drilling
installations) there is a transition period for
one year too, so the new rules could apply from