Petroleum (Exploration and Extraction) Safety Act 2015

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Amendment of Petroleum and Other Minerals Development Act 1960 - definitions, assessment of licence applicant and approval of operator

22. (1) In Chapter I of Part II of the Petroleum and Other Minerals Development Act 1960 —

(a) the following definitions are inserted into section 2(1):

“ ‘major accident’ means, in relation to offshore petroleum activities:

(a) an event involving an explosion, fire, loss of well control, or release of oil, gas or dangerous substances involving, or with a significant potential to cause, fatalities or serious personal injury;

(b) an event leading to serious damage of petroleum infrastructure involving, or with a significant potential to cause, fatalities or serious personal injury;

(c) any other event leading to fatalities or serious injury to multiple persons;

(d) any major environmental incident resulting from incidents referred to in paragraphs (a), (b) and (c) and which relates to offshore petroleum activities;

‘offshore’ means situated in the territorial seas, the exclusive economic zone (within the meaning of Part 3 of the Sea-Fisheries and Maritime Jurisdiction Act 2006 ) or a designated area under section 2 of the Continental Shelf Act 1968 ;

‘offshore petroleum activity’ means any activity that is authorised to be carried on under or in connection with an offshore petroleum authorisation;

‘offshore petroleum authorisation’ means any one or more of the following, where the area to which the licence or lease extends is situated offshore:

(a) an exploration licence granted under section 8;

(b) a petroleum prospecting licence granted under section 9;

(c) a reserved area licence granted under section 19;

(d) a lease undertaking granted under section 10;

(e) a petroleum lease granted under section 13;

‘petroleum undertaking’ has the meaning given to it by section 13A of the Electricity Regulation Act 1999 ;

‘prospective offshore petroleum authorisation holder’ means a person in respect of whom an application has been made to the Minister—

(a) for the grant of an offshore petroleum authorisation to that person, or

(b) for consent to a transfer of an offshore petroleum authorisation to that person (whether or not after the transfer the offshore petroleum authorisation will be held jointly with another person, including an existing petroleum authorisation holder),

but where that application has not been determined;”,

and

(b) in section 2(1), the following is substituted for the definition of “the Minister”:

“ ‘Minister’ means Minister for Communications, Energy and Natural Resources;”.

(2) In Chapter III of Part II of the Petroleum and Other Minerals Development Act 1960 the following is inserted after section 9:

“Assessment of technical and financial capability of applicant for offshore petroleum authorisation

9A. (1) The Minister shall satisfy himself or herself as to the technical and financial capability of the prospective offshore petroleum authorisation holder to carry out the functions and obligations conferred by that offshore petroleum authorisation in determining whether to grant or transfer such an offshore petroleum authorisation.

(2) When assessing the technical and financial capability of a prospective offshore petroleum authorisation holder under subsection (1) to carry out any offshore petroleum activity pursuant to an offshore petroleum authorisation, the Minister shall consider, inter alia:

(a) the risk, hazards and other relevant information relating to the licensed area concerned including, where appropriate—

(i) the cost of degradation of the marine environment under the European Communities (Marine Strategy Framework) Regulations 2011 ( S.I. No. 249 of 2011 ),

(ii) environmentally sensitive marine and coastal environments, and

(iii) marine protected areas, including special areas of conservation under the European Communities (Environmental Liability) Regulations 2008 ( S.I. No. 547 of 2008 ) (as amended by the European Communities (Environmental Liability) (Amendment) Regulations 2011 ( S.I. No. 307 of 2011 )) and special protection areas under the European Communities (Marine Strategy Framework) Regulations 2011 (S.I. No. 249 of 2011);

(b) the particular stage of the offshore petroleum activity or activities;

(c) the ability of the prospective offshore petroleum authorisation holder—

(i) to meet the costs of carrying out the offshore petroleum activity or activities in question,

(ii) to meet the costs for the immediate launch and uninterrupted continuation of all measures for effective emergency response and subsequent remediation in the event of a major accident, and

(iii) to have or to put in place appropriate insurance, indemnity provision or other financial assurance instruments to cover liabilities potentially deriving from the particular petroleum activity or activities in question;

(d) available information relating to the safety and environmental performance of the prospective offshore petroleum authorisation holder, including in relation to major accidents, as may be appropriate to the offshore petroleum activity or activities for which the offshore petroleum authorisation is to be granted or transferred;

(e) the procedures proposed by the prospective offshore petroleum authorisation holder in the event of a major accident for ensuring prompt and adequate handling of appropriate compensation claims including in respect of appropriate compensation payments for transboundary incidents potentially deriving from the particular petroleum activity or activities in question.

(3) Prior to the grant of an offshore petroleum authorisation, the Minister shall consult, where relevant, with the Commission for Energy Regulation and the Minister for the Environment, Community and Local Government in relation to considerations made under subsection (2)(a), and any other person considered necessary.

(4) The Minister shall only grant or transfer an offshore petroleum authorisation to a prospective offshore petroleum authorisation holder where satisfied with the technical and financial capability of the prospective offshore petroleum authorisation holder to carry on the offshore petroleum activity or activities pursuant to the offshore petroleum authorisation and in accordance with the conditions of that offshore petroleum authorisation.

(5) It shall be a condition of an offshore petroleum authorisation that the procedures proposed by the prospective offshore petroleum authorisation holder under subsection (2) (e) are established and remain in place for the duration of the offshore petroleum authorisation.

Approval of appointment of operator

9B. (1) Once notified of a proposed appointment of an operator under section 13KA(1) of the Electricity Regulation Act 1999 by a petroleum undertaking, the Minister shall, having consulted with any person he or she considers necessary, approve the appointment of the operator or object to the appointment of the operator proposed.

(2) Where the Minister objects to the operator proposed by a petroleum undertaking, the Minister shall require the nomination of a suitable alternative by the petroleum undertaking or require the petroleum undertaking to assume the responsibilities of the operator under the licence.

(3) The appointment of an operator by a petroleum undertaking shall not take effect until approval of the appointment by the Minister has been given in writing.

(4) If notified by the Commission that an operator referred to in subsection (1) no longer has the capacity to meet its obligations under this Act, the Minister shall notify the petroleum undertaking accordingly in writing and require the petroleum undertaking to assume the responsibilities of the operator under the licence, and propose a replacement operator without delay for the approval of the Minister.”.