EU Governments Hail Plan to Toughen Offshore Oil-Drilling Rules

European Union governments signaled a readiness to tighten rules on oil exploration after BP Plc’s spill in the Gulf of Mexico, giving a political boost to proposals being drafted by EU regulators.

Energy ministers urged the European Commission, the 27- nation EU’s regulatory arm, to draft stricter standards for offshore oil drillers and broader liability rules “as early as possible in 2011.” Any proposals will need the support of EU governments and the European Parliament, a process that can take two years or more.

The commission pledged in October to propose new rules in a bid to ensure that oil-rig operators demonstrate their technical capacity to deal with accidents and to widen EU environmental- liability legislation covering coastal areas to include all marine waters.

“A clear and comprehensive liability regime in the case of an incident creates incentives for industry to follow an uncompromised safety policy,” the energy ministers said in a statement today in Brussels. With national governments in the EU responsible for granting oil-exploration permits, the ministers also stressed “the importance of the demonstration of the technical and financial capacity of the applicants to deal with any accident prior to the authorization of the respective activities.”

‘Polluter Pays’

The EU is considering ways to improve safety and bolster the “polluter pays” principle in the petroleum industry following the Gulf of Mexico spill, the largest in U.S. history. Offshore installations number more than 1,000 in the northeast Atlantic Ocean and over 100 in the EU waters of the Mediterranean Sea, according to the commission.

BP’s Macondo well gushed more than 4 million barrels of oil into the Gulf of Mexico after an April 20 rig explosion that killed 11 workers. The spill fouled beaches, killed wildlife and shut a swath of fishing grounds before the company managed to cap the well in July.

The accident led the administration of President Barack Obama to impose a temporary ban on oil and natural-gas drilling in waters deeper than 500 feet (152 meters) and prompted BP to set up a $20 billion fund to compensate victims of the spill.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.