The Problem Regulation of Risk

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Grace Grant
6 years ago
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Ivar Alvik Petroleum Law Safety Regulation (HSE) The Problem Regulation of Risk Special characteristics of petroleum activities great risk of damages

1 Ivar Alvik Petroleum Law Safety Regulation (HSE) The Problem Regulation of Risk Special characteristics of petroleum activities great risk of damages and large damage potential Complex activity requiring advanced installations and technology Special risk attached to offshore- and deepwater activity 1

2 Different forms of damage risk that the regulations cover Large-scale catastrophes Cf the Macondo accident Piper Alpha, Alexander Kjelland in the North Sea Environmental damage/pollution blow out, oil waste Threats to life and health of personnel Risk of serious accidents, but also small accidents in the daily work Work environment risk 2

3 Different stages of the activity carry different risks need to tailor measures Exploration and drilling Field development construction and installation in difficult weather and sea conditions Production, storage and transport of oil and gas Transport of equipment and personnel offshore vessels and helicopter transport The role of regulations and law Premise safety is primarily achieved through technology, organization and competent people Role of regulations and the law to place adequate requirements on operations and activity Traditional regulatory design static requirements Typically requirements for specific technical solutions or specified conduct Insufficient for complex activities and operations Main perspective of the Norwegian petroleum safety regulation therefore: Function requirements focused on internal dynamic processes and technological development within the companies 3

4 Historical development of the regulatory framework Development from traditional static regulations in the 1960s and 1970s New regulation in 1975 introduction of requirements for internal systems and control routines ( internal control ) Full move from specification requirements to function requirements in 2001 But supplemented by specification guidelines assumed to satisfy the function requirements Different kinds of regulations of complex activities Direct safety requirements requirements for technical solutions or methods to be used Specifications Function requirements Indirect safety requirements requirements for internal control and documentation Requirements to internal processes in the companies Purpose to strengthen and verify compliance with the direct requirements Rules on exercise of state control and authority Based on cooperation between authorities and companies Requirements for reporting and approvals Justifications for government intervention and decision making 4

5 Jurisdictional reach of the regulations The jurisdictional basis - continental shelf jurisdiction under UNCLOS art 77 The coastal state exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources Main problem the relation between flag state jurisdiction and coastal state jurisdiction relating to floating installations (e.g. drilling rigs) The general principle: The flag state has jurisdiction onboard the installation The coastal state regulates the use of the installation for petroleum activities The regulatory framework basic structure Relevant basic statutes The Petroleum Act, chapters 9 and 10 (1996) The Work Environment Act (2005), cf 1-3 and the Framework Regulation 4 The Ship Safety Act (2007), cf 2 and 3, and the Framework Regulation 3 The Pollution Act, cf 4 (1981) Relevant Health Legislation, cf the Framework Regulation 5 Five central regulations provides the full detailed regulatory framework - irrespective of statutory basis The Framework Regulation (2010) scope, definitions, basic requirements and main principles The Management Regulation (2010) internal management, reporting and documentation The Facilities Regulation (2010) Design and construction of facilities/installations The Activities Regulation (2010) Conduct of activities Regulation on technical and operational matters onshore (2010) 5

6 The anatomy of the direct safety requirements how the function requirements work The main principle dynamic standard developing with technological improvements The Petroleum Act 10-1: Petroleum activities shall be conducted in a prudent manner ( ) and shall take due account of the safety of personnel, the environment and of the financial values which the facilities and vessels represent, including also operational availability The Petroleum Act 9-1: The petroleum activities shall be conducted in such manner as to enable a high level of safety to be maintained and further developed in accordance with the technological development. Cf the Framework Regulation Chapter II Supplemented by more specific function requirements, cf e.g. the Facilitites Regulation Chapter III Further supplemented by interpretations and guidelines cf e.g. the Facilities Regulation 11 Presumed compliance where a solution conforms with relevant standards (NORSOK, API etc) referred to in the guidelines Supplemented by individual government decisions and approvals Indirect safety requirements main principles The general requirement the see to it responsibility The Petroleum Act 10-6 The Framework Regulation 17 The operator s special see to it responsibility cf the Framework Regulation 7 Documentation requirements cf e.g. the Framework Regulation 23 6

7 Who are the responsible subjects? Main principle the Framework Regulation 7 The Operator as the primary responsible the see-to-it requirement The licensee as ultimately responsible cf the Petroleum Act 10-6 Andre som deltar i virksomheten både selskaper og individer The concept of the responsible party entails that most safety requirements unless otherwise specified are addressed to everyone involved Government supervision and control institutional framework Central authority is the Petroleum Safety Authority (PSA) Central coordinating responsibility for all government supervision and control of the petroleum safety regulatory framework Delegated authority to perform supervision and control, grant dispensations, decide measures and give approvals in cooperation with other relevant authorities Cf the Framework Regulation 67 7

8 Government supervision and control required approvals and consents Consent requirements for individual activities the Management Regulation 25 Requirements for Acknowledgement of Compliance for offshore facilities the Framework Regulation 25 Functions and objectives : Control with individual compliance Provides a focus and purpose of documentation and verification requirements Facilitates cooperation and dialogue between the authorities and companies in relation to specific matters The authority to grant exemptions and decide measures Underlying principle wide discretion based on the need for flexibility in concrete situations Authority to grant exemptions in case of special circumstances Cf the Framework Regulation 70 Wide measure of discretion to make decisions necessary for enforcement of the regulations Cf the Framework Regulation 69 8

9 Exercise of government authority limitations Wide measure of discretion provides flexibility in individual situations but also lack of predictability and possibility of abuse Cf the discussions on separate sleeping quarters and hot-bedding The basis of decisions in individual situations specific function requirements in light of general principles and object and purpose Court review based on general principles of administrative law The duty to provide reasons Reasonable grounds Enforcement and sanctions Administrative sanctions Denial of consents Revocation of the license, or individual approvals, consents etc where serious or continued violations occur, cf the Petroleum Act Fines, cf The Petroleum Act Implementation of necessary measures at the cost of the licensee, cf Suspension, cf Criminal sanctions The Petroleum Act

Regulatory Requirements and Reactivation Guidelines

Regulatory Requirements and Reactivation Guidelines North Sea P&A Operations June 28 th, 2017 SPE Aberdeen 7th European Well Abandonment Seminar Day 2 Claudio Pollio Blue Edge S.r.l. 1 Summary UK Regulations: