EUROPEAN COMMISSION DIRECTORATE GENERAL FOR ENERGY Directorate B - Security of supply, Energy markets & Networks B.3 - Internal Market III: Retail markets Coal & Oil EU OFFSHORE OIL AND GAS AUTHORITIES GROUP (EUOAG) FIRST MEETING BRUSSELS, CONFERENCE CENTRE ALBERT BORSCHETTE 14 TH SEPTEMBER 2012 1. Welcome and introduction DRAFT RECORD OF MEETING The 1 st meeting of the EU Offshore Oil and Gas Authorities Group (EUOAG) took place in Brussels, from 9.00 till 16.00 of the 14 th of September, 2012 with the participation of the experts nominated by the Member States Offshore Authorities and Commission officials. The list of participants is attached (Annex 1). The meeting was co-chaired by the Commission (Mr. Jan Panek (JP) Head of Unit DG ENER-B.3 and Mr. Eero Ailio (EA, Deputy Head of Unit)) and by Mr. Steve Walker, Head of Offshore Division, HSE, UK (SW), while Mr. Michalis Christou (COM DG JRC) (MC) acted as the technical secretary of the Group. The Chair (JP) opened the meeting and welcomed the participants. He underlined the importance of the Authorities Group as a forum for the exchange of experiences and expertise between the national authorities and the Commission, and as a peer advisory body, providing concrete comments and input to issues of the implementation of offshore safety legislation. The Group, which was set up by Commission Decision 2012/C 18/07 of 19 January 2012, consists of experts nominated by the Member States Offshore Authorities, following an invitation letter by Mr. Philip Lowe, Director General of DG ENERGY. Introducing the aim of the meeting, the Chair said that the main purpose is to agree on issues of governance of the Group, including in particular the Rules of Procedure, and to discuss the needs and priority areas of work. He presented the Draft Agenda, which was then adopted by the Group. The Co-Chair (SW) also welcomed the participants and underlined the high political importance of offshore safety, both in the EU and in the United Kingdom. He stressed that we are all short of resources and we need to collaborate and share our experiences to ensure that offshore operations are pursued safely. 2. Approval of Minutes EUOAG Inaugural meeting, 8 May 2012 The Chair (JP) informed the Group about the Inaugural meeting, which took place in Brussels on the 8 th of May with the participation of experts from the offshore
authorities of the Member States. The purpose of that meeting was to prepare the work of the Group. Following a proposal by the Commission, the participants had agreed with the nomination of Mr. Steve Walker (SW) as Co-Chair. The participants had also discussed priority areas of work and had agreed to send to the Technical Secretariat their needs and priorities, structured along the answers to 5 questions by the Chairs. The Draft Record of the meeting, which had been distributed to the Group, was accepted without changes. 3. Governance of the Group Rules of Procedure Issues of governance of the Group were discussed under the next Agenda item. The Commission had proposed Draft Rules of Procedure (ROP), in accordance with the standard rules of procedure of expert groups, as they are presented in Commission Decision C(2010) 7649 final, SEC 1360 final. The following topics were discussed in detail: Representation of Member State Authorities; Participation of third parties; Chair; Convening of meetings; and Agenda and Summary minutes of the meetings. In the discussion that followed, it was noticed that it is reasonable to extend the representation of Member States Authorities up to two representatives per Member State, in order to allow complete coverage of both safety and environmental protection issues, also in those Member States where these issues are covered by different authorities. The Member States can also nominate alternate representatives of their Authorities to provide adequate replacement, in case nominated representatives cannot attend a meeting. It is also important that the names of these representatives be communicated to the Chair, so that continuation in the work and composition of the Group is ensured. The Group accepted these principles. Concerning co-chairmanship it was noticed that it would be difficult for an expert to co-chair the meetings and at the same time represent the Authority of his/her Member State. Therefore, the Group agreed that for the period of co-chairmanship, the Member State providing co-chairmanship needs an alternate. Concerning the participation of third parties, the Group was of the opinion that it should open its doors to stakeholders, at least for parts of the meetings. At the same time it is desirable to devote certain sessions of the meetings exclusively to the authorities. The Chair, after discussion in the Group, could invite relevant experts from stakeholders to participate ad hoc or as active observers. 1 These stakeholders include industrial associations, trade unions, non-governmental organisations, consultants, academia and offshore safety authorities from other concerned countries. In particular, it was decided to send official letters and to invite Norway and Faroe Islands to nominate representatives to the Group. 1 Broad participation rights without voting right and reimbursements. 2
Participation of technical experts, i.e. persons with particular technical competences, is also of great importance, especially in cases where these specific competences are lacking from the Group. Since the Group is expected to be involved into the process of evolving further the offshore safety legislation, it is necessary to ensure appropriate technical expertise in all issues, and when competences are lacking, to seek them externally. However, as stressed by members of the Group, if technical expertise is lacking, we should seek it from true technical experts, contrary to e.g. lobbyists. In other words, distinction should be made between the competences of the experts and their political/commercial views. In a question to what defines an experts the Group answered that it is exactly the competences that define an expert. Member States may propose experts, but a discussion within the Group should precede their invitation. Some members of the Group wondered about the wording in Art.1 of the ROP, related to nomination of the Co-Chair of the Group. Commission representatives clarified that the wording in the rules of procedure could not be different than the wording in the Decision itself. In any case, the intention of having a Co-Chair nominated from the members of the Group is clear, unanimously accepted and proven already at the Inaugural meeting. One the roles of the Co-Chair is to ensure that the opinions of the Member States are adequately taken into consideration. Concerning the issue of whether the individual positions of the members can or cannot be mentioned in the minutes of the meeting, the Group was of the opinion that decisions should be made on an ad hoc basis. The relevant Article of the ROP was amended accordingly. Finally a number of suggestions were proposed that increase clarity of the ROP and address situations not initially foreseen in the standard Rules of Procedure (for example, the possibility to convey a meeting by using electronic means such as video-conference). A revised version of the Rules of Procedure was prepared by Commission staff and distributed to the Group for consideration. Summarizing the discussion, the Chair invited the members of the Group to submit written comments to the revised ROP by the end of September 2012. Also, in conformity with the ROP, the Chair will forward a formal invitation to Norway and Faroe islands to nominate representatives as per Art.6 of the Rules of Procedures (ROPs). ACTIONS: COM: To formally invite Norway and Faroe Islands to nominate representatives to the Group. All Members: To provide comments to the Secretariat on the revised Rules of Procedure, by the end of September 2012. 3
4. Progress with co-decision for proposal for EU offshore legislation The Commission staff (JP and EA) gave a brief on the progress of the discussions at the European Parliament Committees and the Council Energy Working Group for the proposal for EU offshore legislation. Starting with the Parliament, 3 Committees are discussing the proposal (ITRE, ENVI, JURI) with the Committee on Industry, Research and Energy (ITRE) having the lead. The issues debated include: Independence of the Competent Authority; independence of the verification process; Legal form (i.e. Regulation or Directive); Liability, including civil liability and financial security; Workers rights, occupational safety and tripartite participation; Exploration and hydrocarbons exploitation in the Arctic; Definitions of terms, such as major hazard, major accident, operator, etc. Agency for supervision; enforcement of EMSA for response to accidents. Especially concerning the role of EMSA (European Maritime Safety Agency) some members of the Group noticed that if EMSA assumes the roles described in some proposals, there would be an overlap with the objectives of EUOAG. They noticed that EMSA has competences and a well-established role in shipping and the maritime sector, but competences in safety of offshore oil and gas operations were lacking. Furthermore, the Member States have their own system in place, e.g. for inspections, control, accreditation, etc., so, according to them, increased responsibilities of EMSA in these areas would not only be unnecessary but also harmful. From the Commission it was noticed that, when it comes to preparedness and response to the accidents, EMSA has the ability to mobilize resources and means, organizing exercises and establishing joint coordination procedures, while mobilizing means for cleaning up oil spills. It has therefore a well-established role in preparedness and response. An overlap may also exist, related with information exchange, but that is an area where there is space for everyone and overlap is not harmful. Concerning the overlap between the activities of EUOAG and EMSA, it was noticed that EMSA has an executive role (i.e. related with execution of tasks), not a policy-making one. The Commission representatives suggested first to wait for a final proposal by the Parliament on that issue before being able to evaluate it. It was also suggested to consider EMSA as a tool for the purposes of increased offshore safety through its response and satellite monitoring services. Clearly, EUOAG cannot have an opinion right now, but once the EU offshore legislation is finalized EUOAG would need to work with other bodies such as EMSA to ensure there is a clear separation of roles. Concerning the discussion on the legal form, the Commission had used 4-5 criteria for proposing a Regulation as the most appropriate legal form (including, for 4
example, the fact that a Regulation allows the regulator to directly address the operator, while a Directive only addresses the Member States). The EU Presidency will intend to prepare a text addressing these issues and achieving the same objectives through a Directive. Again, this process is still ongoing and the Group has to wait until the EP and the Council further develop their positions. Another issue was the independence of the Competent Authority (CA) and the distinction between the safety CA (for offshore safety and environmental protection) and licensing authority (incl. economic promotion of offshore activities), especially in Member states with small offshore exploitation activity. Currently there is ongoing work in the Council addressing this issue and the overall objective of the COM is to have EU legislation that improves offshore safety. Other issues addressed in the discussions include the tolerability of risk, the evaluation and acceptance of the Report on major hazards (RoMH), and the relationship between the holder of a license and the drilling contractor in terms of duties, preparation of RoMH, etc. It was stressed that an expert group of practitioners, such as EUOAG, could prepare guidance on these topics. 5. Discussion on priority areas of work During the Inaugural meeting in May 2012 it was agreed to provide input on the needs and priority areas of work for the Group. This input was structured as answers to 5 questions posed by the Chairs: What do you need/want from the EUOAG? What do you think others in EUOAG will need from you? What do you think EUOAG may need from NSOAF members? What do our other stakeholders need from EUOAG? What should be the priority areas of work for EUOAG? The Technical Secretariat (COM-JRC) had collected the responses and compiled them in a Summary Report, which was presented at the meeting. Eleven (11) members had responded. Their responses, although varying significantly amongst themselves in style and level of detail, can provide significant qualitative insights. The members consider EUOAG as a forum for exchange of experience and expertise, providing quality advisory input to COM and to offshore "delegated authority" Committees and exchanging experience and lessons learned from accidents / near-misses. They also want the Group to develop guidance for the implementation of EU offshore legislation and for use of standards and industry best practices. They are also expecting an effort for cooperation with third countries (neighbouring to EU), to promote capacity building amongst national authorities and to set up sub-groups to examine specific issues. The priority areas of work were the following: 5
To provide quality input and guidance to ensure consistency of implementation of EU-wide offshore legislation To assist the transfer of the experiences of North Sea MSs to help capacity building in offshore regulatory regimes in other regions Facilitation of relevant information exchange concerning occurrence, causes and responses to major accidents and high-potential near-misses To share intelligence on industry practices and standards and to promote - where appropriate - guidelines on best practice To promote collaboration with third countries on offshore safety and environmental protection It was clear that all Members are committed to collaborate, to exchange information/knowledge and to work towards consistent implementation of the EU legislation. NSOAF Members have shown a high level of responsibility and they are willing to help in transfer of experience, putting more focus to exchange of information, both on incidents and on industry practices. For the non-nsoaf Members the emerging issues are capacity building, development of guidelines, agreed best practices (authoritative) and standards, and promotion of collaboration with third countries. It was commented that some of the needs and priorities mentioned by the Members, i.e. capacity building, development of guidelines, agreed best practices and collaboration with third countries, are actually the issues raised by the European Parliament. The Group should address these issues. Many members of the Group (UK, Denmark, the Netherlands, Ireland, Norway) stressed the fact that we need to take account of the limitations in resources and, for that reason, adjust our ambitions accordingly and be more realistic. The need for sharing experience was also highlighted, so that Member States with less experience in offshore safety management can hear and learn from Member States with more experience. Specific actions for accomplishing this objective include organization of workshops, examples of RoMH, best industry practices, well control, etc. The dedicated website, which is being developed by the JRC, is also expected to help in spreading offshore safety control experience. The Commission representatives presented the Commission planning for EUOAG work in 2013, bringing the discussion to more specific tasks for the Group. The plan, schematically depicted in the following Figure, has two basic lines of activity: implementation of the new EU legislation and general issues mainly covering the development of technical standards. The implementation of EU legislation includes tasks such as the development of common format for sharing information, monitoring of implementation, development of best practices and guidelines and cooperation projects. The last few tasks should be carried out in the context of the Authorities Group. 6
Annex IV(7) of the proposed legislation specifies a number of priority areas where industry and competent authorities need to cooperate in order to develop standards and guidance. These range from improving well integrity and monitoring effectiveness of barriers, to reliable decision making and key performance indicators. Amongst these, the development of best practices on the content and evaluation of MHRs is extremely important. Summarizing the discussion on future priorities of work, the Co-Chair (SW) noticed that (i) members of the Group have made clear that there are resource problems; (ii) difficulties are likely to be encountered in the implementation of the legislation, which hopefully will be known by December; (iii) one or more workshops should be organized in 2013 with the involvement of practitioners to share their work; (iv) continuing exchange of information on incidents and near-misses; and (v) the members of the Group should seek opportunities to inform each other about developments, best practice documents, etc. There was also consensus that for the next meeting it is sensible for representatives of selected stakeholders to be present in parts of the meeting. At this point COM provided an overview of stakeholders who have expressed interest in the work of the Group. These include: - Industry, in particular OGP and IADC - Trade Unions, namely ETUC and IndustriAll - OSPAR, who could be asked to coordinate with the Secretariats of other Seas Conventions and who has done acknowledgeable work after Macondo. It was generally agreed that enough information about priority areas of work is available to the Chair and Co-chair (EA and SW) in order for them to draw up the Agenda of the next meeting. 7
6. Technical items 6. 1. Update with Elgin incident situation and HSE investigation The UK gave an update on the Elgin G4 gas release and the investigation carried out by HSE. At the Elgin G4 wellhead platform, located 270 km North-East of Aberdeen, a natural gas leak occurred on 25 March, following a well intervention operation. Following the release, all 238 workers on both the Elgin and adjacent Rowan Viking platforms were safely evacuated. The initial gas release rate was estimated at about 2 kg/s (170 tonnes/day), which constitutes a major hydrocarbon release. The release was killed after 52 days with Top-kill of Well G4, completed on 19 May by Wild Well Control, using heavy mud and two permanent cement plugs were installed in G4. Relief well drilling was suspended, and annuli pressures in other Elgin wells are being monitored. The total quantity of hydrocarbons released is estimated at 6172 tonnes (50:50 gas/condensate). From the first moments of the incident both HSE and DECC were involved in following the event, and closely monitoring the company in their efforts to restore safe conditions, and to monitor the environment. HSE has put together 2 teams: A recovery team, discussing risk assessments with TOTAL and monitoring their efforts for stopping the leak; and an investigation team, which is not in direct contact with the company and its purpose was to collect forensic evidence and investigate the causes of the incident. Indeed, forensic evidence from the computers was collected, on-site visits were made and more than 50 statements were taken. Event and Causal Factor Analysis (ECFA) techniques were used to identify lines of inquiry. The investigation is still on-going. The incident has triggered wider industry work: HSE asked the industry, via the Wells Life Cycle Practices Forum (WLCPF), to demonstrate progress in the longer-term recommendations of HSE Research Report 409 (on HPHT wells; http://www.hse.gov.uk/research/rrpdf/rr409.pdf). On request of HSE, a WLCPF sub-group specifically on HPHT matters will be established. The Chair (EA) thanked JM for the update and underlined how important it is for the Group to exchange information on incidents and to identify from the actual cases good practice in accident response and investigation. 6. 2. Report from 25 th NSOAF Annual meeting Mr. Steve Walker (UK) (SW), as Chair of NSOAF, reported back on the 25 th NSOAF meeting, which took place at Craigellachie, Scotland, on 23-25 May 2012, hosted by HSE. SW said that all presentations will be sent on a CD to non-nsoaf members of the Group, through the Secretariat. Some of the topics discussed at the NSOAF meeting were: use of a common NSOAF incident reporting format and collection of accident/incident together with some near-misses statistics; the working group following the review of Directive 92/91 and the Commission study on effectiveness of the Directive (performed by DNV); the safety training working group; the risk-based inspections activity; and the emergency planning and response activity (presented by the Netherlands). 8
The next meeting of NSOAF will be held in 2013 in Dublin and will be Chaired by Ireland. 6. 3. Forthcoming IRF Meeting The Netherlands informed the Group about the forthcoming IRF meeting, to be held in Rio de Janeiro, Brazil, 25-27 September 2012. He highlighted 5 projects that will be discussed and are of great interest for the work of EUOAG, namely: (i) Performance measures project and key performance indicators on safety, both lagging and leading indicators; (ii) Safety culture project; (iii) Well control and BOP project, where OGP and IADC have been asked to review/revise the basis of BOP design; (iv) Fitness to operate project, which deals with the requirements of small companies to operate and how this can be addressed at the licensing process; and (v) Standards project, which will deal with the difficulties in the development of new global standards, especially in the context of the sanctions against Iran affecting collaboration between ISO and API. The issue of standardization was discussed in the Group, which stressed the need for smooth continuation of the process and expressed their worries about the withdrawal of API from the ISO process. It was agreed that the best quality and most acceptable standards are those developed by ISO and therefore standardization through this organization should continue. The Netherlands informed also the Group about the next IRF Conference, which is taking place in Perth, Australia, in September 2013. The IRF Conferences are organized every 2 years, addressing senior managers, etc., and are highly recommended. The previous IRF Conference was held in Stavanger, Norway, in 2011 and was a very successful event. 7. AOB 7.1. Commission studies and other international activities The Chair (EA) informed the Group on a number of Commission studies and other relevant international activities. Commission Liability studies: Two studies are presently carried out by the Commission on liability: DG ENVIRONMENT study on environmental liability, in the context of the Environmental Liability Directive (ELD); and DG ENERGY study on civil liability and financial security. These are expected to yield inputs for the discussion on possibilities to improve the allocation of the liabilities for major accidents, on issue identified during Commission impact assessments. Commission Extractive industries study: A study is presently carried out by the Commission (DG EMPLOYMENT) on the implementation of the Extractive Industries Directive 92/91, with a view to review/revise the Directive. The study 9
is carried out by DNV. A Working Group has been formed in NSOAF (lead: Norway), which follows this study. Commission Product safety standards: DG ENTR is about to launch a study on the review of the Pressure equipment Directive, and if need be revise this Directive. Barcelona Convention Offshore Protocol: Accepted by the Council, but still needs to be discussed in the European Parliament. 8. Next meeting The 2 nd meeting of the EUOAG will take place on the 4 th of December 2012 in Brussels. It will be a full-day meeting. 9. LIST OF ACTIONS No WHO ACTION DEADLINE 1 JRC Send Presentations to the Group DONE 2 JRC Send Draft Rules of Procedure (ROPs) to the DONE Group for comments 3 ALL Send comments on the Draft ROPs to the 30 September Secretariat 4 COM Invite Norway and Faroe Islands to nominate representatives in the Group As soon as reasonably possible 5 JRC Chairs 10. Closure of the meeting Revise ROPs according to comments received by the members and prepare for discussion at the 2 nd meeting 20 November The Chairman thanked the participants for their attendance and valuable contributions and closed the meeting. Report prepared by: Michalis Christou (COM-JRC) Report approved by: Eero Ailio (COM-ENER) Steve Walker (HSE, EUOAG co-chair) Annexes: 1. List of participants 2. Agenda of the meeting 10
Annex 1 List of Participants at the 1 st Meeting of EUOAG held on 14 September 2012 in Brussels (CCAB) Energy Service, Ministry of Commerce, Industry and Tourism, Cyprus Danish Energy Agency, Denmark Danish Energy Agency, Denmark Ministry of Ecology, France Ministry of Ecology, France Federal Ministry of Economics & Technology, Germany Permanent Representation of Greece to the EU, Greece Permanent Representation of Greece to the EU, Greece Commission for Energy Regulation, Ireland Ministry of Economic Development, Italy Ministry of Economic Development, Italy EU Affairs Dept., Ministry for Resources, Malta State Supervision of Mines, Ministry of Economic Affairs, Agriculture and Innovation, The Netherlands Petroleum Safety Authority, Norway Climate and Pollution Agency, Norway Ministry of Economy, Dept. for Oil and Gas, Poland Ministry of Environment, Dept. of Geology and Geological Concessions, Poland Direccao Geral de Energia e Geologia (DGEG), Portugal Romanian Naval Authority, Romania Ministry of Environment and Forests, Romania Ministry of Industry, Energy and Tourism, Spain Department for Energy and Climate Change, UK Health and Safety Executive Offshore Division, UK Mr. Steve WALKER, Health and Safety Executive Offshore Division, UK Co-Chair of EUOAG Mr Jan PANEK, European Commission, DG ENER, B3 Chair of EUOAG Mr Eero AILIO, European Commission, DG ENER, B3 Chair of EUOAG Mr Taf POWELL, European Commission, DG ENER, B3 Mr David SCHREIB, European Commission, DG ENER, B3 Mr Michalis CHRISTOU, European Commission, DG JRC, F3 11
Annex 2 EUROPEAN COMMISSION DIRECTORATE GENERAL FOR ENERGY Directorate B - Security of supply, Energy markets & Networks B.3 - Internal Market III: Retail markets Coal & Oil EU OFFSHORE OIL AND GAS AUTHORITIES GROUP (EUOAG) FIRST MEETING BRUSSELS, CONFERENCE CENTRE ALBERT BORSCHETTE 14 TH SEPTEMBER 2012 AGENDA Time Item Lead 8:45 Registration 9:00 Welcome and Introduction Chair/Co-chair Clear report of meeting 8 May 2012 9:15 Issues of Governance of the Group I COM (i) applicable standards and procedures for expert groups (ii) progress legislation with co-decision for proposal for EU offshore 10:45 Coffee/Tea Break 11:00 Issues of Governance of the Group II (i) tour de table issues to be raised by members (ii) working with key stakeholders Plenary 12:30 Lunch Break (Restaurant facility on Level 5 of Conference Centre) 13:30 Discussion on the priorities of the Group COM & Plenary 14:15 Technical items * Plenary (i) progress with Elgin situation & HSE investigation (SW) (ii)report-back from NSOAF plenary (NL) (iii)look ahead to IRF September 2012 (to be advised) AOB 15:15 Closing remarks Chair and Co-Chair 15:30 End of the Meeting * No items have been suggested by Members. Topics are placed by Chair 12