Offshore oil operations to be covered by a special institution

The Ministry of Energy, Small and Medium Enterprises and Business Environment has drafted a bill on the safety of offshore oil operations, to regulate “the minimum requirements to prevent any major accidents and to limit the consequences of such accidents deriving from oil operations in Romania’s area of responsibility in the Black Sea”, according to Law 17/1990 on the judicial regime of internal waters, territorial sea, contiguous zone and Romania’s exclusive economic zone.

“Major accidents related to offshore oil operations can have devastating and irreversible consequences on the marine and coastal environment, as well as significant negative effects on coastal economic activities,” reads the draft bill.

Large fines for breaking the law

The draft law sets fines between RON 50,000 and RON 250,000 for operators who do not comply with this document. Thus, it is punishable by a fine between RON 50,000-RON 100,000 the operator who fails to submit to the competent authority, within 45 days of the entry into force of the oil offshore agreement, the compulsory documents (such as the general policy for major accidents prevention, the safety and environmental management system, a report on major hazards, etc.).

The fine for the offense was also set between RON 100,000 and RON 150,000 for non-compliance with internal plans to intervene in case of emergency or, for example, for the operators’ and owners’, involved in a combined operation, failure to notify. A fine between RON 150,000-RON 200,000 will also receive the oilmen that, in case of a major accident, do not take all appropriate measures to prevent its expansion and to ease its consequences. Another fine between RON 200,000 and RON 250,000 was set for situations when the connected production facilities and infrastructure are operated not only in the authorized perimeters and not only by the designated operators in this regard, and for situations when the operator does not provide a safety zone around an installation, where the vessels are banned from entering or remaining. The execution of offshore petroleum operations without the offshore oil agreement “is considered an offense punishable in accordance to Law no. 238/2004, as amended and supplemented.”

According to the document submitted to public debate, the operator is bound to draw up a report on major hazards on a production facility, but also on major hazards on a non-production installation, which are to be submitted to the competent authority. The owners of oil agreements are also required to develop internal action plans in case of emergency, and also to implement the general policy for preventing major accidents in the petroleum operations. “The Ministry of Transport, through the specialized departments, together with other authorities having legal powers in this respect, and if the case with the information and collaboration support of the competent authority, ensures thorough investigation of major accidents,” reads the draft law.

According to the bill, the main changes are the setting up of a competent authority responsible for regulation and inspection, respectively having institutional coordination and dialogue abilities with market operators and establishing a system of clear obligations to petroleum agreements holders, operators and owners. “Thus, this law institutes the functioning of a competent, objective and independent authority from any other national authority, exercising functions related to the economic development of the offshore natural resources, to the licensing of offshore oil operations and to the management of revenues from those operations, while avoiding conflicts of interest between the functions of the competent authority, on the one hand and the functions of other authorities, on the other hand,” the draft underscores.

The authority’s main responsibilities, authority to be set up under the coordination of the General Secretariat of the Government (SGG) within 30 days from the date of the law’s entry into force, are as follows: the assessment and approval of reports on major hazards, the assessment of notifications regarding the design and evaluation of notifications of well operations or combined operations and other such documents that are submitted; it prepares reports and the cooperation with the competent authorities.

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