October 7, 2010 / 9:58 AM / in 7 years

EU energy chief plans deepwater drilling ban

BRUSSELS (Reuters) - Europe’s energy chief will next week reiterate his call for a temporary ban on new deepwater drilling for oil until a probe is completed into the causes of BP’s spill in the Gulf of Mexico, a draft document shows.

<p>European Energy Commissioner Guenther Oettinger attends a news conference during the Black Sea Energy and Economic Forum in Sofia in this March 2, 2010 file photo. REUTERS/Stoyan Nenov</p>

Guenther Oettinger will propose on October 13 a regulatory clampdown on the offshore oil industry, following the Deepwater Horizon accident, his spokeswoman confirmed.

“The EU has a vital interest in preventing a similar disaster,” said a draft of the proposal seen by Reuters on Thursday.

“The Commission reiterates its call upon the member states to suspend the licensing of complex oil or gas exploration operations until technical investigations to the causes of the Deepwater Horizon accident are completed and the European offshore safety regime has been reviewed,” it adds.

Oettinger is expected to say that Europe’s myriad regulations for offshore exploration are too fragmented to cope with an industry that is drilling further and further offshore in deep, rough waters as “easy oil” runs out.

It observes there are more than 1,000 installations in the northeast Atlantic, over 100 in the Mediterranean and plans for new exploration off the coasts of Cyprus and Malta.

“Licensing stands out as the first key tool to ensure the safety of new drillings in complex environments,” says the draft proposal, which would need the approval of the European Union’s parliament and its 27 member countries before taking effect.

“The licensing regime needs to be backed up by an unequivocal liability regime,” it adds.

During licensing, companies would have to prove the ‘safety case’ for each operation and demonstrate the company’s ability to prevent and deal with crises.

They might also have to prove their financial ability to handle the consequences of unforeseen events, possibly via insurance schemes or risk-coverage instruments.

The Commission will also look at bringing drilling ships under the same rules as offshore drilling rigs.

Reporting by Pete Harrison

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