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Review of the UK Oil and Gas Regulatory Regime: Written Ministerial Statement by Charles Hendry

My Rt.Hon. Friend the Secretary of State for Energy and Climate Change, in a statement to the House on 14 June 2010, indicated that a review…

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My Rt.Hon. Friend the Secretary of State for Energy and Climate Change, in a statement to the House on 14 June 2010, indicated that a review of the regulatory regime for the offshore oil and gas sector would be undertaken. I am pleased today to have deposited in the House the report of that review conducted by a panel under the independent Chairmanship of Geoffrey Maitland, Professor of Energy Engineering at Imperial College, London.

The impetus for this exercise was, of course, the disaster which befell the Deepwater Horizon rig during drilling operations in the Gulf of Mexico in April 2010. The tragic loss of life and widespread pollution which arose as a consequence of the blow-out on that rig were a salutary reminder to industry and regulators alike of the need for the highest standards of safety and environmental control in this potentially hazardous industry. Inevitably the incident led to a number of both internal and independent investigations in the US which have shed a great deal of light on the causes of the disaster and given rise to recommendations designed to ensure that the risks of a repeat are minimised.

Given the infrequency with which such serious incidents occur in the offshore industry, it is important that we learn all available lessons from them. I am, therefore, grateful that Professor Maitland and his colleagues have examined the US evidence with obvious rigour and distilled from it such a constructive road-map for driving ever higher standards in the UK.

I am pleased to note the report acknowledges as the starting point the strengths of the UK’s safety and environmental control regime and the high regard in which the authorities are held both domestically and by international observers. I trust that the industry itself will be reassured to note that the report also acknowledges the extent to which UK operators and industry bodies have mobilised themselves since Deepwater Horizon in an effort to raise those standards. The review has, however, identified a number of important areas, particularly around the assured implementation of regulatory requirements and the promulgation of best practice, where there appears scope for further improvement.

A great many of the insightful recommendations of the report are characterised by the theme of collaboration, whether that be between regulators, amongst operators or across those boundaries. In this respect, as one of the responses to the Deepwater Horizon incident, a new Memorandum of Understanding (MoU) has already been signed between DECC and the Health and Safety Executive (HSE). I have asked that the joint Board, which has been established as a result, provides advice to myself and Department of Work and Pensions (DWP) Ministers on the recommendations which are relevant to the regulators. I have also asked my officials to work with HSE and, where relevant, Maritime & Coastguard Agency colleagues in considering with industry the broader recommendations with a view to identifying and embedding the improvements this report suggests are achievable.

I have requested that regulators work with industry to produce an agreed response and action plan by July next year.

Published 1 May 2012