In face of the current and future developments of offshore drilling, this report questions the suitability of the international framework regulating it. Covering both safety and liability and compensation, it analyses the current international and regional regulations, highlights the regulatory gaps and explores options to fill them, focusing on the most appropriate level of intervention and on the principles upon which offshore drilling activities should be based.
Highlights:
- A NEVER-ENDING RUSH TO OFFSHORE OIL AND GAS
The last decades have been marked by a considerable development of offshore oil and gas activities. Because of an increasing energy demand and technological innovations, drilling activities extended and moved into deep and ultra-deep water areas. As of today, almost a third of the oil and a quarter of the natural gas consumed in the world come from underwater areas and this rush to offshore oil and gas exploration and exploitation is not about to end: forecasts show a continuing growth of production in traditional offshore regions and significant development in new areas.
- INCREASING THREATS TO THE ENVIRONMENT
Drilling more and deeper unquestionably means increasing the threats to the environment and natural resources. Recent accidents on offshore platforms have demonstrated that the environmental risks of offshore drilling activities concern all regions in the world and all types of companies, even the big players. Because these accidents had transboundary impacts, discussions were recently reopened on the suitability of the current international framework to regulate offshore oil and gas activities. In this regard, it clearly appears that there are important regulatory gaps, both in terms of safety of offshore drilling activities and liability and compensation in case of accidents.
- BETWEEN STRATEGY AND REALISM: BUILDING ON THE REGIONAL LEVEL TO STRENGTHEN THE REGULATION OF OFFSHORE DRILLING ACTIVITIES
Strengthening the regulation of offshore drilling activities could mainly come from the regional level, for two main reasons. First, the adoption of global conventions dealing with safety on the one hand, on liability and compensation on the other hand, seems very unlikely in the short term: as of today, the strong opposition from certain States, as well as the absence of a “champion” institution, prevent from achieving it, even if this ambition should not be abandoned. Second, there are regional organisations on which States can rely to better regulate offshore drilling activities, regional seas programmes in particular. However, in most countries, the resolution of environmental problems related to offshore oil and gas exploration and exploitation will not come from the sole adoption of agreements, even legally binding. That is the reason why a strategic framework is needed in order to create the conditions for success of current and future regional binding agreements.
