Industry NewsOil and gas producers in the North Sea have promised to cut leaks in their infrastructure over the next three years. The move is seen as a response to increasing safety concerns over the operation of energy assets since the Gulf of Mexico oil spill in 2010. The incident has led to enacted regulatory oversight in some countries and potentially increased the costs of production. There are concerns that the situation could lead to some projects being delayed or cancelled, potentially leading to higher fuel prices.
Industry trade body, Oil and Gas UK (OGUK) has announced a new promise in its safety initiative, "Step Change in Safety". The main pillar of the scheme will be the aforementioned reduction in leaks, which will be built into producer business plans?. Previously, the Health and Safety Executive (HSE) had reported a increase in the incidence of leakages and had been seeking a change in this trend. Steve Walker, head of HSE?s offshore division, told press at the time, "I am particularly disappointed, and concerned, that major and significant hydrocarbon releases are up by more than a third on last year."
Prior to the announcement it was also reported that the industry had been warned by the Government that it did need to do more to offset the potential for accidents. Specifically, there had been doubts over if oil-spill equipment would remain efficient in the conditions seen in the northern North Sea off of Scotland. Despite these concerns, there has been no call for a ban on deep-water drilling in UK waters such as that instigated in the US.
However, MPs are pushing for new legislation and licence conditions for offshore energy producers. This is to safeguard both the physical infrastructure, as well as ensure producers can afford any potential clean-up operation that may be required.
Energy Minister Charles Hendry commented, "We recognise that these measures could add to the cost of investing in new UK oil and gas production and urge the Treasury to reflect this when considering incentives to such investments."