An amended regulatory regime for health, safety and environmental matters will result from the implementation of an EU Directive. This directive was published following the Deepwater Horizon accident in the Gulf of Mexico in 2010, which resulted in the death of 11 workers.
Reasons, aims and application of the new Directive
EU Directive 2013/30/EU on the safety of offshore oil and gas operations was published on 28 June 2013 and the UK must implement the requirements of the Directive by 19 July 2015.
The EU recognised that major accidents relating to offshore oil and gas operations may have devastating and irreversible consequences on the marine and coastal environment as well as significant negative impacts on coastal economies. By introducing the Directive, the EU aims to reduce the occurrence of major accidents as far as possible and to limit their consequences.
The Directive applies to both existing and future offshore oil and gas installations and operations. It establishes minimum conditions for safe offshore exploration and exploitation and improves the response mechanisms in the event of a major accident. In addition to safety, the Directive contains requirements relating to licensing, environmental protection, emergency response and liability.
The Offshore Regulator under the new regime
The Department of Energy and Climate Change’s (DECC) Offshore Oil and Gas Environment and Decommissioning Team is currently responsible for implementing offshore environmental legislation, and HSE’s Energy Division is responsible for implementing health and safety legislation for offshore oil and gas operations. The DECC and HSE work closely together under a Memorandum of Understanding.
Under the new regime, the Offshore Safety Directive Regulator (OSDR) will be the new Competent Authority, responsible for the regulation of major safety and environmental accident hazards in the offshore oil and gas sector.
The OSDR, a partnership between HSE and the DECC, is responsible for implementing the requirements of the Directive and overseeing ongoing industry compliance. The DECC and HSE will still have separate functions outside the scope of the Directive. An enhanced Memorandum of Understanding is being established and the OSDR will operate in a similar way to the Competent Authority regulating onshore major hazard installations under the Control of Major Accident Hazards regulations (COMAH).
The OSDR’s role includes:
- Accepting and/or assessing relevant safety cases and Oil Pollution Emergency Plans (“OPEP”),
- Well notifications and other notifications.
- Dealing with the reporting of incidents and dangerous occurrences.
- Intervention planning and investigation of incidents.
Other regulatory changes resulting from the Directive
There has been an attempt to maintain existing procedures as far as possible but some new provisions are necessary to meet the requirements of the Directive.
The Directive requires operators and owners to produce a report on major hazards. The UK’s existing regime already requires operators and owners to produce a safety case, which includes a great deal of the information required to be in the report on major hazards. The regulations requiring a safety case will be amended to meet the additional Directive requirements, including the provision of relevant environmental information.
To continue operating in the UK Continental Shelf, operators and owners will need to submit a revised safety case and have it accepted before the relevant transition date. Existing OPEPs will also require updating and approval, and non-production installations will need an approved OPEP for the first time.
Public consultation and response
A public consultation on the EU Directive, the review of offshore Approved Codes of Practice and the updating of UK onshore oil and gas safety legislation to cover emerging energy technologies was concluded in September 2014. It is expected that the response to the consultation shall be published in early 2015.
It is recognised that the UK’s offshore oil and gas regulatory regime is one of the best in the world and major accidents are thankfully rare. However, there is little room for complacency in such a high risk industry and any lessons to be learned from the Deepwater Horizon tragedy are welcome.This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.