Knowledge Centre
Key Issues
The UK regulatory regime is widely regarded as one of the most robust in the world but the offshore oil and gas exploration and production industry, its regulators and the trade unions are not being complacent.
Within a month of the Deepwater Horizon incident occurring, they joined together to form the UK oil spill prevention and response advisory group, called OSPRAG. The purpose of OSPRAG was to review the sector’s offshore drilling practices in the UK continental shelf (UKCS) in light of the events in the Gulf of Mexico and assess the industry’s readiness to respond to a major event in this country.
The group was chaired by Jim House and provided direction and support to three specialist review groups, listed below.
Oil Spill Emergency Response Group
Insurance and Indemnities Review Group
Technical Review Group (TRG)
Review of prevention practices and procedures
OSPRAG’s technical review group completed a review of the UK offshore oil and gas industry’s practices in the following areas: well examination verification and primary well control, blow-out preventers (BOPs) and competency, behaviours and human factors. This work concluded that there is a high degree of confidence in the UK regulatory regime and that it drives the right safety and environmental behaviours.
Implementing and sharing best practice
The review process described above also identified several best practices. A new pan-industry group, the Well Life Cycle Practices Forum (WLCPF), chaired by ExxonMobil, was created under the umbrella of Oil & Gas UK, to allow these practices to be shared across the industry. Members of the forum include drilling managers, well engineers and designers and they will work closely with the HSE, trade unions and other regulators. The group will advance recommendations made by OSPRAG and facilitate the dissemination of lessons from Macondo and other similar events. The group's work will be handled through an initial six subteams whose members will provide expertise in the following fields:
- blow-out preventer issues
- well examination
- verification
- competency, behaviours and human factors
- relief well planning requirements
- well life cycle integrity guidance
Development of well capping device
At Oil & Gas UK's Board meeting in November 2010, the decision was taken to proceed with procurement and funding of a well capping device, recommended by OSPRAG, which could close off a well in the event of a major well control incident. Find out all about this ground-breaking development here.
Oil Spill Emergency Response Group
The ultimate aim is to ensure that the UKCS has a robust and sustainable oil spill response capability based on sound science and work to achieve that end is on-going.
Response to lower impact spills
The OSPRAG Oil Spill Emergency Response Group’s strategy was primarily to secure a range of options which can be selected to respond to the types of oil spill which, relative to Macondo, might have a higher probability of happening but would result in a lower environmental and economic impact. In practice, this means making sure that the UK industry has access to sufficient stocks of response equipment (such as booms, dispersants and specialist response vessels as well as trained personnel) to deal with a range of higher probability, lower impact spill scenarios. OSPRAG proposed the purchase of additional stocks of dispersants for use in the UK.
Response to higher impact spills
Industry, regulators and agencies undertook a thorough review of the UK's response capability and recommended some enhancements in order to respond to a large-scale, ongoing release, such as that caused by the loss of well control during drilling on Macondo. One of these was the development of the capping device to seal off the uncontrolled flow of oil from a well.
Another was the development of an enhanced ‘tool kit’ of resources, designed to allow emergency response teams to swiftly ‘gear up’ with tools, equipment and personnel necessary to tackle a more serious incident and would cover contingencies such as the sourcing of equipment and vessels for burning oil in-situ, containment and recovery of oil at sea and further options for the use of dispersants.
Testing oil spill response capability
On 18 and 19 May 2011, a major two day exercise called Exercise SULA was carried out to simulate how the UK would react to a major oil spill incident offshore, with a focus on well control, at sea counter pollution measures and shoreline protection. The exercise tested subsea well control response capability, command and control functions, and the counter pollution response used to control an ongoing oil spill. More information on the exercise is available here and the lessons learnt were presented at the OSPRAG Summit in September 2011.
Between 16 and 26 July 2011, the UK oil and gas industry also successfully tested its ability to deploy a well capping device in the waters west of Shetland. More information on this exercise, known as the Emergency Equipment Response Deployment (EERD) is available here.
A report on both exercises is available here.
Insurance and Indemnities Review Group (IIRG)
Increasing the OPOL limit
Following a recommendation by OSPRAG, the Offshore Pollution Liability Association Ltd (OPOL) which administers a voluntary industry mutual agreement requiring each operator to accept strict, ‘no fault’ liability for pollution damage and reimbursement of public authorities for remedial measures up to a pre-determined limit, increased that limit in mid-August to $250 million. This came into effect on 1 October 2010. The new limit is sufficient to cover the third party costs of an oil spill in modelled spill scenarios, except in a few cases where top-up arrangments are needed.
It should be noted that companies also carry insurance for their own and other liabilities beyond this; usually covering loss or damage to property and operators’ extra expenses, which include controlling a well, redrilling, and further pollution liability cover. Details of the mandatory financial requirements that must be met before drilling or other operations can take place in the UKCS are available here.
Cooperative Emergency Assistance
OCES (Operators’ Cooperative Emergency Services) is a joint declaration among the national oil and gas trade associations of the UK, Norway, Denmark, the Netherlands, Germany and the Irish Republic. It states that operators may call upon each other for support in emergency situations regardless of national boundaries. The provisions were first drafted by the national associations in 1979 and reviewed periodically since. However, in the immediate aftermath of the Macondo incident in the Gulf of Mexico in 2010, OSPRAG recommended a new review of the arrangement.
A workshop for representatives from the national industry associations was held in Copenhagen in November 2010. The scope of the emergency assistance code contained within the joint declaration was discussed, as were its practical applications in the event of an emergency, the potential barriers to cross-boundary assistance and revisions needed in light of Macondo. It was agreed that the approach to revising the joint declaration would focus initially on the key operational aspects, followed by a subsequent review of the legal aspects. The revised arrangements were tested through a table top exercise in April 2011.
In January 2012, an updated version of the arrangement was signed by all six trade associations.
