EU on the safety of offshore oil and gas operations - Main contents

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dossier	COM(2020)732 - Assessing the implementation of Directive 2013/30/EU on the safety of offshore oil and gas operations.
document	COM(2020)732
date	November 16, 2020

Annex III, point 3(v) of the Directive). The competent authority should therefore assess the plan for decommissioning before it grants authorisation to start oil and gas production.

When a decision is taken to take a fixed production installation out of use, an amended RoMH should be produced if no initial assessment was performed or if the conditions have changed. The RoMH report should at a minimum include a description of major hazard risks associated with the decommissioning of the installation (Annex I of the Directive, point 6(4)(b)).

It follows from this that the decommissioning is subject to the approval of competent authorities, who may require measures and procedures to ensure safe decommissioning. In contrast, the Directive does not stipulate whether, to what extent, or how the operator/ owner should remove the platform. The Directive only addresses possible safety aspects relevant to the end of the lifecycle, but not environmental concerns after decommissioning.

4.10.2Oslo and Paris Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR)

In the absence of specific EU legislation on the dismantling of offshore platforms, OSPAR rules ⁵ on decommissioning provide a template for its Contracting Parties to decide on operators’/owners’ requests for decommissioning. These rules apply to all Member States with offshore operations, namely Spain, the Netherlands, Germany, Denmark, the UK, and Ireland ⁶ . The OSPAR rules may also serve as an example for Member States preparing authorisation decisions. However, in OSPAR a Contracting Party may ask for a derogation from the duty to dismantle an installation. OSPAR rules do not apply to EU Member States with offshore activities in the Baltic, Mediterranean or Black Seas ⁷ .

4.10.3Conclusions and options to proceed

Under the Directive, operators of installations are required to submit an amended RoMH to the competent authority addressing all aspects of decommissioning (e.g. wells, structure, hazardous materials). The operator is not allowed to proceed with the intended operations until the competent authority has accepted the amended RoMH. Many other consents and authorisations are required from the Member State prior to decommissioning. Once the decommissioning is complete and the structures are removed, the Directive ceases to apply, as there are no relevant activities under the Directive. However, other conditions continue to apply regarding operators’ responsibilities, including for seabed surveys pursuant to licensing regulations and other national legislation.

The Directive is silent on whether a fixed structure should be partially or wholly removed and attributes/delegates the responsibility for assessment and decision to Member States. This is consistent with the Directive’s aim to prevent accidents, including to the environment. For example, it may be demonstrated that the risks of attempting full removal of a structure are unacceptable with current knowledge and technical capability, or that risks are significantly higher than for partial removal.

The decision on the extent of removal is therefore left to other parts of the Member States’ legal framework, and the Directive will be applied to ensure that major accident risks are as low as reasonably possible for the selected method.

Further analysis appears necessary regarding the permanent sealing of wells. It is vital that the public can have full confidence that the competent authority is entirely free from restrictions when exercising its function of accepting risk assessments for the permanent abandonment of production installations. It also appears that it would be useful if Member States were to incorporate more transparent obligations from the relevant conventions into their legislative policy.

At the current stage of analysis, the Commission sees potential added value in exploring whether it would be useful to amend the Directive to create additional standards for the degree of removal, as well as on post-decommissioning.

4.11Mutual recognition of mobile drilling units (MODU)

Industry and regulators are broadly divided on the mutual recognition of mobile rigs, i.e. on whether and how a Member State should accept installation risk assessments approved by another Member State, pursuant to the Directive. However, the Commission has not been able so far to identify any technical justification for a Member State to insist on carrying out a second in-depth assessment within 5 years of the MODU’s approval by another Member State.

This lack of mutual recognition appears to be in contravention of the principles of the single market. The Commission will keep this situation under review. It would be helpful for the Member States concerned to provide a technical and legal case study to demonstrate the validity of their argument. Industry should also provide information demonstrating cases where, in their view, unnecessary administrative burdens have been imposed.

5Conclusions and follow-up

The Commission’s analysis has demonstrated the strengths and weaknesses of the Directive as implemented by Member States and used in practice. The findings have been largely positive. Potential benefits in terms of avoided accidents largely exceed the cost of implementation and the adjustments needed in the offshore installations.

The report on experiences of implementing the Directive covers the period from the date when Member States implemented the Directive to the end of transitional arrangements for the industry. It follows from this assessment that both the Directive and the Member States’ implementing legislation appropriately address offshore safety. The Directive clearly up-scaled the safety of offshore operations, not only in the European Union but also in other parts of the world via EU enterprises’ global safety policy and culture.

At the same time, the Directive harmonised rules in Member States and created a level playing field across the EU. According to the consultations with Member States and stakeholders, the Directive deals in a clear and structured manner with all relevant safety aspects for preventing accidents and the means for mitigating them. Based on the Directive as implemented, Member States opened direct communication channels on all safety-relevant subjects. Member States also carry out regular peer reviews, e.g. via the EUOAG, and share best practices. Both Member States and stakeholders were satisfied with the effectiveness of the Directive, which became fully applicable to the entire offshore industry from 19 July 2018.

According to the EU Green Deal, all EU actions and policies should work together with the objective of helping the EU achieve a successful and just transition towards a sustainable future. Its initiatives are to be implemented in the most effective and least burdensome way, and all other EU initiatives must live up to a green oath to ‘do no harm’. The Offshore Safety Directive helps achieve these aims.

The assessment analysed how Member States implemented the Directive and drew conclusions on the strengths, weaknesses, options and challenges of this process. Overall, quality of transposition was sufficient, and the Commission will follow up remaining issues with Member States individually ⁸ .

In its current form, the Directive may not always ensure effective accident prevention outside the EU. Environmental NGOs expressed the view that although the implementation experience was positive, greater protection of the environment and stronger financial responsibility mechanisms would be warranted. Regulators and primary duty holders consider that the new regulatory measures and subjective industry arrangements need to stabilise before any further legislative developments can be considered. Further incident and information reports at EU level will consolidate the baseline of performance indicators and identify critical trends in the risks of major accidents. It is apparent that there is an upward trajectory in the industrial safety culture of the EU.

The Commission intends to follow up on three areas:

(I)liability, financial security and the handling of compensation claims;

(II)the decommissioning of installations, including questions on removal or leaving in situ, as well as subsequent follow-up;

(III)the mutual recognition of mobile drilling installation in the EU.

For the follow-up on liability, financial security, and the handling of compensation claims, two options appear available:

a.Analyse further experience with the Directive to assess whether there is need for greater EU rules and harmonisation.

b.Carry out further research and an impact assessment for harmonised industry rules regarding liability, financial security, and in a broader context, for the handling of compensation claims. ⁹

The Directive does not include provisions going beyond the requirement to decommission in a safe manner ¹⁰ . It neither prescribes nor recommends certain processes or guidance on when and how to dismantle an installation, or when, exceptionally, to leave an installation where it is. Furthermore, the legal effectiveness of the Directive ends with decommissioning, since the Directive is silent on subsequent monitoring.

For its analysis, the Commission took account of information on the decommissioning of the Brent platforms in the North Sea. Apparently, the UK government was preparing to approve plans by Shell to leave steel jackets and concrete bases underneath three of its decommissioned Brent oilfield installations. OSPAR members took very different views on the best option of dealing with this.

For the decommissioning of installations and follow-up after decommissioning, the following options appear available:

a.Powers regarding decisions on decommissioning remain with Member States, unless it is demonstrated that national policies, taking due note of international legislation (e.g. OSPAR), cannot adequately deal with this matter.

b.The Commission carries out further research and an impact assessment regarding additional rules on this subject, to be included either in the Directive or applicable environmental legislation.

With regard to the mutual recognition between Member States of mobile drilling units, the Commission proposes the following way forward:

a.Verify whether existing EU rules are adequate and ensure their proper implementation and application.

b.Determine whether additional legislation may facilitate the mutual recognition of these installations and specify costs and benefits, for example by means of an impact assessment.

The Commission looks forward to receiving views and comments on its report from the European Parliament, the Council and the European Social and Economic Committee.

(1) Commission Decision of 19 January 2012 on setting up the European Offshore Authorities Group. OJ C 18/8, 21.1.2012.
(2) Commission Implementing Regulation (EU) No 1112/2014. OJ L 302/1, 22.10.2014.
(3) Liability, compensation and financial security for offshore oil and gas operations. EP resolution of 1 December 2016 on liability, compensation and financial security for offshore oil and gas operations (2015/2352(INI)). OJ C 224, 27.06.2018, p. 157
(4)

The Directive’s definition of ‘offshore oil and gas operations’ reinforces this understanding: ‘‘offshore oil and gas operations’ means all activities associated with an installation or connected infrastructure, including design, planning, construction, operation and decommissioning thereof, relating to exploration and production of oil or gas, but excluding conveyance of oil and gas from one coast to another’.

(5) 1998 OSPAR decision 98/3 on the disposal of disused offshore installations.
(6) The Convention has been signed and ratified by all of the Contracting Parties to the original Oslo or Paris Conventions (Belgium, Denmark, the European Union, Finland, France, Germany, Iceland, Ireland, the Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom) along with Luxembourg and Switzerland.
(7) Other international agreements and conventions relevant for offshore installations are in place. Leading works are the Geneva Convention on the Continental Shelf 1958, the Basel Convention on Control of Transboundary Movements of Hazardous Wastes and their Disposal 1989, the Helsinki Convention on the Protection of the Marine Environment in the Baltic Area of 1992 and the Protocol for the Protection of the Mediterranean Sea against Pollution Resulting from Exploration and Exploitation of the Continental Shelf and the Seabed and its Subsoil of 1994.
(8) For example, Member States’ level of financial penalties for breaches of duty does not seem to be adapted either to the need to satisfy the public interest or the potential consequences of a major accident in EU waters, irrespective of the level of escalation in the accident concerned. It is unlikely that the current penalties will make a significant impression on either investors or the public.
(9) Several Member States did not fully implement the provisions of the Directive on liability, handling of compensation claims and financial security of the licensee. The Commission intends to follow this issue up individually with Member States concerned.
(10) According to the Directive, the decommissioning of installations is an inherent element of the installations’ life cycle. Powers to deal with this aspect have been delegated to Member States’ competent authorities, which request and assess a major hazard report before authorisation. These reports should include provisions for the end of the installation’s lifecycle. As soon as decommissioning is envisaged, competent authorities should assess an updated major hazard report.