EU Tightens Offshore Oil Regulation

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May 21, 2013

A NASA photograph shows the extend of the Gulf Oil Spill in 2010. Photo: NASA

Jonathan Stearns

May 21 (Bloomberg) — The European Union tightened safety rules for offshore oil and natural-gas exploration to curb the risk of a major accident after BP Plc’s 2010 spill in the Gulf of Mexico, the largest in U.S. history.

The European Parliament approved legislation that forces oil and gas companies to submit special hazard reports and emergency-response plans before offshore operations can start. The law also requires operators of offshore platforms to prove their ability to cover potential liabilities and extends the zone in which businesses would be liable for damage to 370 kilometers (230 miles) off the coast from the current 22 kilometers.

“The rules we are currently coming up with can be used as a template at international level,” said Ivo Belet, a Belgian member who steered the legislation through the 27-nation EU assembly today in Strasbourg, France. EU governments have already signaled support for the law, making their final approval a formality in the coming weeks or months.

The tighter regulation marks the EU’s effort to improve safety and bolster the “polluter pays” principle in the energy industry following the Gulf of Mexico spill three years ago. Eleven rig workers died and more than 4.1 million barrels of crude gushed into the Gulf after the Deepwater Horizon rig exploded and sank while drilling BP’s Macondo well off the Louisiana coast.

The EU has almost 1,000 offshore oil installations, including 486 in the U.K., 181 in the Netherlands and 61 in Denmark, the European Commission, the bloc’s regulatory arm in Brussels, said when proposing the new rules in October 2011. The average cost of offshore oil and gas accidents in the EU ranges from 205 million euros ($264 million) to 915 million euros a year, the commission said at the time.

Representatives of the International Association of Oil and Gas Producers weren’t immediately reachable by telephone at the group’s London and Brussels offices to comment on the new EU legislation.

Copyright 2013 Bloomberg.

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