Report Number: AA/77-01-01/11959

November 2011

UK Response to EC Impact
Assessment on Offshore
Regulation
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Confidential to Oil & Gas UK

Prepared for:

Prepared by:

Bob Lauder

Carol Humphreys and Mike Johnson

Oil & Gas UK

GL Industrial Services UK Ltd trading as GL Noble Denton

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Holywell Park
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Tel: +44 (0)1509 28 2559
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This Report must be read in its entirety and is subject to any assumptions and qualifications expressed therein. Elements of this Report contain detailed technical data
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Registered in England and Wales No. 3294136 Registered Office: Holywell Park, Ashby Road, Loughborough, Leicestershire, LE11 3GR UK

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Executive Summary
The European Commission (EC) has published a draft regulation on the safety of offshore oil and gas
activities. To support this draft regulation, an Impact Assessment has been prepared, which provides both
the average annual cost of major offshore accidents in European waters and the potential benefits of
changes to regulation through a postulated reduction in incidents. The Impact Assessment then shows that
this benefit could be greater than the additional regulatory cost and so is used to support the recommended
approach.
The key points in the Impact Assessment are:
The average annual cost of all major offshore accidents is estimated to be between 205 million
and 915 million, which is made up of:
o The average annual cost of blowout incidents, estimated to be between 140 million and
850 million. (A blowout is defined as an incident where formation fluid flows out of the
well after all the predefined technical well barriers or the activation of the same have
failed.)
o The average annual cost of all other major accidents, estimated to be 65 million.
The recommended option (Option 2) is considered by the EC to have the potential to save
approximately half of the total annual cost of major accidents (between 103 million and 455
million) with annual costs of 133 to 139 million plus one off costs of 18 to 44 million.
As the annualised cost of major accident hazards is dominated by the costs associated with blowouts, Oil &
Gas UK contracted GL Noble Denton to review this aspect of the Impact Assessment by examining the
estimation of the frequency and consequences of blowouts and how these are used within the cost benefit
analysis.
Summary of Findings
The review of the EC Impact Assessment has shown:
The frequency assigned to blowouts in the EC Impact Assessment that have a duration of 15 days
or more is in agreement with industry data and is not disputed.
The consequences of blowouts in the EC Impact Assessment are based on high flow, 50+ day
events which the data shows are a very low proportion of blowout events.
Industry data shows that 30% of blowout events are associated with wells being drilled for
exploration and appraisal.
70% of blowout events are associated with production wells which will have much reduced
consequences compared to the upper bounding case used in the Impact Assessment, (Deepwater
Horizon).
A survey of UKCS operators carried out in 2011 showed that of the current oil production wells only
54% flow naturally and only 22% flow naturally at a rate of more than 1000 barrels of oil per day
(bopd), i.e. 2% of the Deepwater Horizon flow rate.
The upper bound of the cost estimates used in the EC Impact Assessment for longer duration
blowout events (30,000 million) is considerably higher than what could be considered a
representative cost for a longer duration blowout event.
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Using more realistic, yet still conservative, estimates of the costs of blowout events, the cost of
longer duration blowouts is calculated to be of the order of 62 million per year, giving a total cost
of all major accidents of 127 million.
The EC Impact Assessment assumes a reduction in incident costs of 50% by the introduction of EU
regulation despite stating in relation to North Sea activities bearing in mind that the region's riskbased regulatory framework is considered at present amongst the very best in the world.
90% of the offshore oil and gas activities in European waters fall within this risk based regulatory
framework.
The reduction in incident costs also takes no account of changes already, voluntarily, introduced by
the UK oil and gas Industry in the management of well operations post the Deepwater Horizon
event.
Accepting the EC estimate given in the Impact Assessment that a reduction in incident costs of 50%
will be achieved by the introduction of EU regulation, a reduction in costs to 63.5 million will be
realised. The costs of the proposed regulatory change, at over 130 million, far outweigh the
benefits.
If the benefit from the regulatory change is less, say a 20% reduction in incident costs, the
regulatory costs are more than five times the benefit obtained.
Given these findings, it is concluded that the cost benefit analysis given in the EC Impact Assessment is
fundamentally flawed and that the assertion that it supports the introduction of EU wide regulations (Option
2) is invalid.

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Contents
1

Introduction ........................................................................................................................................1

Blowout Frequency............................................................................................................................2

2.1

Blowout Prevention and Area of Operation ...................................................................................... 2

2.2

Dependency on Type of Operation..................................................................................................... 3

Consequences and Annualised Cost..............................................................................................4

3.1

Basis for the EC Cost Estimates......................................................................................................... 4

3.2

Comments on EC Costs ....................................................................................................................... 4

3.3

Revised Costing..................................................................................................................................... 6

Cost Benefit Analysis........................................................................................................................8

Summary and Conclusions ............................................................................................................10

References ........................................................................................................................................11

Appendix A Clean up Costs...................................................................................................................12

Appendix B Incident Data.......................................................................................................................14

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Introduction

The European Commission (EC) has published a draft regulation on the safety of offshore oil and gas
activities. To support this draft regulation, an Impact Assessment has been prepared [1][2], which provides
both the average annual cost of major offshore accidents in European waters and the potential benefits of
changes to regulation through a postulated reduction in incidents. The Impact Assessment then shows that
this benefit could be greater than the additional regulatory cost and so is used to support the recommended
approach.
The key points in the Impact Assessment are:
The average annual cost of all major offshore accidents is estimated to be between 205 million
and 915 million, which is made up of:
o The average annual cost of blowout incidents, estimated to be between 140 million and
850 million. (A blowout is defined as an incident where formation fluid flows out of the
well after all the predefined technical well barriers or the activation of the same have
failed. [3])
o The average annual cost of other major accidents, estimated to be 65 million.
The recommended option (Option 2) is considered by the EC to have the potential to save
approximately half of the total annual cost of major accidents (between 103 million and 455
million) with annual costs of 133 to 139 million plus one off costs of 18 to 44 million.
As the annualised cost of major accident hazards is dominated by the costs associated with blowouts, Oil &
Gas UK1 contracted GL Noble Denton to review this aspect of the Impact Assessment by examining the
estimation of the frequency and consequences of blowouts and how these are used within the cost benefit
analysis.
This review makes reference to a number of previously published studies. These include comments on the
EC impact assessment provided by Det Norske Veritas (DNV) to the Norwegian Oil Gas industry
association (OLF) [4].

Oil & Gas UK is the representative body for the UK offshore oil and gas industry. It is a not-for-profit organisation, established in April 2007 but
with a pedigree stretching back over 30 years
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2 Blowout Frequency
Both the EC Impact Assessment and the DNV review for OLF [4] use data published by the International
Association of Oil & Gas Producers (OGP) [3], which in turn is based on data published by SINTEF. The
EC Impact Assessment uses data for blowout events up to 2006 [5] whilst the DNV review uses more recent
SINTEF data (up to 2010 [6]).
Both assessments arrive at broadly similar frequency assessments, i.e.
EC:

2.7x10-2 per year in European waters, i.e. repeat occurrence once every 37 years

DNV

2.1 x10-2 per year in UK and Norwegian waters, i.e. repeat occurrence once every 48 years

The main document of the Impact Assessment [1] states that analysis of the frequency data has been
undertaken in order to determine the frequency of long duration events, quoted as being circa 50 days in
duration. Annex I provides more detail on this analysis and shows that the quoted frequency is actually for
a blowout event that lasts more than 14 days (i.e. 15 days or more). The quoted DNV frequency is also for
blowout events lasting 15 days or more. The data shows that long duration events globally account for a
very small proportion of blowouts and the rate in the North Sea area is lower than the rest of the world.
Data presented in the DNV review indicates that only 20% of the blowout events lasting 15 days or more
would continue for more than 50 days.
Given the broadly similar results from the Impact Assessment and the DNV review, it is judged that there is
little benefit to be obtained in a third review of the data to provide baseline frequency estimates of blowouts
lasting 15 days or more. However, there are two areas associated with blowout frequency estimation that
deserve further comment and these are discussed below.

2.1

Blowout Prevention and Area of Operation

Further review of the OGP data shows that it deliberately separates data for North Sea Standard
operations2 from data for operations that do not meet this standard. The frequency of blowouts on wells
that meet the North Sea Standard operation are consistently lower than those that do not meet this
standard. This suggests that North Sea operations are already performing better than the global average,
though as this is a small data set care should be taken about drawing conclusions that are too wide ranging.
In the EC analysis the frequency of an event lasting 15 days or more is the only frequency used in
estimating the annualised cost. Any risk calculated using the frequency of a 15 day event with the costs for
a 50+ day event will clearly be a gross over estimation.
Though the historical data suggests that there is a downward trend in blowout frequencies, the EC analysis
has not taken any direct account of this. Given the limited amount of data, this approach is not
unreasonable.
However, aside from any quantitative analysis, there are good reasons to expect that blowout frequencies
should be reducing. DNV have reviewed [7] the technological improvements in blowout prevention. While
the quantification of the benefits can be disputed (DNV estimate that current frequencies are expected to be

North Sea Standard operation has the specific definition of a well with a blowout preventer installed including a shear ram and following the
two barrier principle.
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a factor of 3.5 lower than the historical data) there is very strong evidence to show that current blowout
frequencies are less than those estimated from historical data. In addition, the UK oil and gas industry, as
part of the Oil Spill Prevention and Response Group (OSPRAG) response to Deepwater Horizon, carried
out a technical review of well operations to provide assurance as to the safety of such operations on the UK
Continental Shelf. That review has also prompted work to produce further industry guidance, capturing good
practice, on matters such as Well Integrity Management; Well Examination and Verification; Well Control;
and Training and Competence. Guidelines for Well Operators on Well Examination and Guidelines for Well
Operators on Competency of Well Examiners were officially published 29th November 2011. All of these
enhanced measures provide additional confidence in UK well operations management.
As a consequence, the blowout frequency used in the EC Impact Assessment should be viewed as highly
conservative for 50+ day events.

2.2

Dependency on Type of Operation

The published base frequency data used in the Impact Assessment is also subdivided by the different types
of operations during which blowouts could occur, i.e. during exploration and development drilling, well
intervention, and production. In the EC analysis, these separate frequencies have been combined to
provide the single estimate for blowout events lasting 15 days or more. This is then the only frequency used
in estimating the annualised cost. The combination of the data loses any distinction between blowout events
during exploration and appraisal drilling operations compared with those from production wells, where the
consequences may be very different. Blowouts on production wells are very unlikely to be able to sustain a
long duration, significant spill event. A survey of operators in the UKCS carried out by Oil & Gas UK in 2011
(with responses from all the main operators) indicates that for 1070 oil production wells:
46% cannot flow naturally.
Only 22% can flow naturally and have a production rate of more than 1000 barrels of oil per day
(bopd).
Though this data is specific to UKCS, it can be expected that there will be similar low flow and not naturally
flowing wells in the rest of European waters. No consideration has been given to this factor in the EC
Impact Assessment.
Using the data quoted in Annex I of the Impact Assessment, about 70% of the frequency of blowouts comes
from production wells with the remaining 30% coming from drilling and completion operations.
Again, the application of a single frequency is too simplistic and ignores the fact that larger events (both in
release rate and durations extending significantly beyond 15 days) are less likely, particularly in the case of
production wells.
As will be seen in the following sections, these factors can significantly affect the
estimated annual costs from blowout events.

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3 Consequences and Annualised Cost

3.1

Basis for the EC Cost Estimates

The Impact Assessment provides lower and upper costs for the base case blowout of 5,000 million and
30,000 million respectively. The Deepwater Horizon blowout in the Gulf of Mexico provides the
benchmark for the upper limit. This had an estimated release rate of 50,000 bopd for about 100 days. The
cost was derived from BP estimates and is therefore relatively well defined. However, its use in calculating
the upper limit of the annualised cost assumes that all blowout events lasting 15 days or more will cost
30,000 million, giving an upper bound annualised cost of 850 million.
The Impact Assessment is less definitive regarding the derivation of the lower bound cost estimate for a
blowout event lasting 15 days or more. The assessment refers to an environmental statement produced by
Hess for an appraisal well off Shetland [8] detailing two cases:
A blowout event involving the release of 88,000 barrels (approximately 12,000 tonnes) of oil per day
which is then brought under control
A much longer duration event lasting 2 months with a total oil spill of about 500,000 tonnes (3.7
million barrels) of oil.
The first event represents the worst case uncontrolled blowout where intervention is successful in bringing
the well under control. The second case is again the worst case uncontrolled blowout, but in this case the
well is not brought under control and the reservoir pressure depletes over a period of 2 months to a point
where the release effectively stops.
The Hess environmental statement provides no information on the cost of such an event. In order to derive
a cost associated with these incidents, the Impact Assessment makes reference to published data on oil
clean up costs [9] to derive the clean up costs of US$1.6 billion and US$6.6 billion for the two Hess blowout
events based on just over US$13,000 clean up cost per tonne. It is not entirely clear how the minimum
cost for a blowout event is then calculated from these values as the final cost includes compensation costs
as well as clean up costs. However, the minimum cost of any blowout event lasting 15 days or more on an
exploration, development or production well derived from these cases is finally given as 5,000 million.
The lower bound of the annualised cost for blowout events is then determined by multiplying the total
frequency of blowouts lasting 15 days or more (2.7x10-2 per year) by the minimum cost of 5,000 million to
give an annualised cost of 140 million. That is it is assumed that all of these blowouts have at least the
consequences identified in the Hess statement for an appraisal well, ignoring the fact that many wells
cannot release oil at anything like the rate assumed by the EC.

3.2

Comments on EC Costs

The comments on cost analysis provided in the EC Impact Assessment cover a number of areas.
Likelihood and Magnitude of the Upper Bound
The upper bound on the annualised cost is clearly highly conservative as events such as Deepwater
Horizon are at the very high end of the possible range of consequences. They therefore have a much lower
chance of occurring than the probability used in the Impact Assessment, which is the frequency of all events
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lasting 15 days or more. It could also be argued that the compensation costs are high in the US and such
costs are unlikely to be incurred within European waters.
Minimum Blowout Event
The lower bound blowout event in the Impact Assessment, based on an appraisal well for Hess, is
considered to have flow rates significantly higher than the majority of the currently producing wells on the
UKCS. This event was the scenario used as the basis for the recent UK emergency response exercise
Sula, organised to test the industrys response to a significant oil spill in conjunction with the National
Contingency Plan. As discussed earlier, the data quoted in Annex I of the Impact Assessment shows that
about 70% of blowouts are from production wells rather than during drilling. Given that only 22% of UKCS
wells flow naturally and produce more than 1000 bopd, an event resulting in a spillage of 88,000 bopd is
considered completely unrepresentative of production well blowouts in the UKCS3.
Even when extended to all European waters, the blowout event used in the Impact Assessment to define
the minimum consequences is actually much worse than most production well blowouts could ever be.
Cost of Oil Spill
The clean up costs quoted in the Impact Assessment are the baseline values in [9] and are reproduced in
Appendix A. The costs vary depending on the location and initially it appears that the Impact Assessment
has selected a reasonable average. However the reference includes tables for modifying factors that allow
clean up costs to be adjusted to provide a more case specific assessment (these factors are also
reproduced in Appendix A). In the case of larger offshore oil spills, these modifiers would reduce the clean
up costs by more than an order of magnitude but the Impact Assessment has chosen not to apply these
factors building in yet more conservatism to the estimate.
On its own, this would reduce the lower cost estimate to less than 500 million with an average cost of only
14 million, compared to the 140 million given in the Impact Assessment.
Oil Spill Response
The analysis does not take any account of the work voluntarily carried out by the UK Industry under the
auspices of the Oil Spill Prevention and Response Group (OSPRAG) set up in response to the Deepwater
Horizon event. OSPRAG carried out a technical review of well operations to provide assurance as to the
security of such operations on the UK Continental Shelf. That review has also prompted work to produce
further industry guidance on matters such as Well Integrity Management; Well Examination and Verification;
Well Control; and Training and Competence. A particular response of the group was the design and
manufacture of a capping device that can be used to bring a blowout event under control in 30 days. All of
these enhanced measures provide additional confidence in UK well operations management.
Oil & Gas UK are also currently developing estimates for oil spill costs for significant blowouts on the UKCS
[10]. This includes detailed modelling of a number of blowout scenarios and calculation of the likely costs,

It is recognised that the production rate is only indicative of the blowout release rate, however this does not make any difference to the
considerable disparity between the average UKCS production well and the minimum case given in the Impact Assessment.
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including compensation. The release rates used for the modelling range from a minimum of 9,200 bopd up
to approximately 58,000 bopd,
The modelling also considers two cases in terms of duration, one where the blowout continues for 90 days,
representative of the case where a relief well is required, and a second where the blowout lasts 30 days,
representing a case where the flow can be stopped by other means.
It should be stressed that these modelled events are by no means average blowout events. The range of
spills used in the modelling spans the worst oil spillages that have occurred worldwide, with the top event
being equivalent to the Deepwater Horizon blowout. Further comparison with major blowouts is provided in
Appendix B. Given the well information gained from the survey of UKCS operators, these represent events
at the very high end of possibilities for most wells.
The costs calculated in the Oil & Gas UK modelling are:
90 day spill: 260 million to 645 million
30 day spill : 88 million to 330 million
It can be seen that all of these costs are significantly below the minimum cost estimate of 5,000 million
quoted in the Impact Assessment. It is worth noting, however, that if the Impact Assessment had taken
account of the modification factors given in [9], the calculated costs would have been relatively consistent
with the values calculated in the Oil & Gas UK modelling.
It is also important to distinguish between blowout events and tanker spills. Tanker spills often occur near
the coastline and the proportion of oil that reaches the shore will be greater, leading to a significant increase
in clean up costs. Tanker spills are therefore not a good guide to the likely costs of blowouts.

3.3

Revised Costing

In order to illustrate the considerable pessimism in the EC Impact Assessment, a more representative, yet
still mostly conservative, analysis has been carried out. The assumptions made in these calculations are:
1. The frequency of blowouts lasting 15 days or more is taken to be the same as that used in the EC
Impact Assessment, i.e. 2.7x10-2 per year.
2. The probability of such events lasting more than 50 days is the same as that given in the DNV
response to OLF. This gives the frequency of events lasting 15-50 days and 50 days or more as
2.12x10-2 and 5.8x10-3 per year respectively.
3. Drilling and completion activities account for 30% of blowouts.
4. Production and well intervention activities account for 70% of events.
5. Only 40% of naturally flowing wells will produce more than 1000 bopd.
6. For 15-50 day events:
a. The assumed costs for drilling and completion blowouts is the maximum cost estimated in
the OSPRAG study 645 million (which is actually a 90 day event)
b. Production blowouts from wells that flow at more than 1000 bopd cost the maximum value
calculated in the OSPRAG study for 30 day events, 330 million.
c. Production blowouts from wells that flow at less than 1000 bopd cost the minimum value
calculated in the OSPRAG study for 30 day events, 88 million.
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7. For 50+ day events:

a. The assumed costs for drilling and completion blowouts is 30,000 million (the cost of the
Deepwater Horizon event)
b. All production blowouts have the maximum cost in the OSPRAG study, 645 million
The revised costing based on these assumptions is shown in Table 1, which also provides a total overall
cost, including other offshore major accidents.
Table 1: Revised Annualised Costs

Duration

Frequency
per year

Activity

Proportion of
Events

Cost

Annualised
Cost

15-50 days

2.12x10-2

Drilling &
Completion

30%

645 million

4.1 million

Production (incl
well intervention)
on >1000bopd
wells

42%

330 million

2.9 million

Production (incl
well intervention)
on <1000bopd
wells

28%

88 million

0.5 million

Drilling &
Completion

30%

30,000 million

52.1 million

Production (incl
well intervention

70%

645 million

2.6 million

[ repeats every 47
years]

50+ days

5.79x10-3
[repeats every 172
years]

Total for blowouts*

62 million

Costs for other major accidents

65 million

Overall total

127 million

EC Impact Assessment

205 million 915 million

* This has been rounded to the nearest whole number

It should be noted that the revised costing still includes a group of events that are conservatively assumed
to always result in the same costs as the Deepwater Horizon blowout. These dominate the total annualised
cost and as a result, the annualised cost estimate is also not particularly sensitive to the other costs. Even if
the costs associated with all other events were doubled, the total annual cost would only increase by about
10 million.
The purpose in providing this revised costing is not to provide a definitive evaluation of the annualised costs,
but to use a more representative analysis to illustrate considerable overestimation within the EC Impact
Assessment. However, given that the revised costing is significantly less than the EC estimate, it is
important to revisit the cost benefit analysis.
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Cost Benefit Analysis

As already described, the cost benefit analysis for the EC recommended option (Option 2) has been carried
out on the basis that implementation of the option will reduce accidents to 50% of their current level.
If for the moment this level of reduction is accepted, the upper limit of the EC benefit is based on the
assumption that all blowout events cost 30,000 million, The impact of this is shown in Figure 1 where the
annualised benefit is shown for different types of accident.. This figure also shows the minimum annual
regulatory cost.
450

400

Annualised Costs/Benefits (millions)

350

15-50 days production on

<1000bopd wells

300

15-50 days production on

>1000bopd wells
15-50 days drilling &
completion

250

50+ days production

200

50+ days drilling & completion

Non-blowout incidents (other
major accidents)

150

Minimum regulatory cost

100

50

0
EC Impact Assessment

Revised Costing

Figure 1: Comparison of Maximum Benefits against Minimum Regulatory Cost

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It can be seen the revised costing still conservatively retains the postulated benefits related to 50+ day
drilling and completion blowouts and other major accidents. However, other benefits are significantly
reduced by the introduction of the more representative costing. It clearly shows that the EC upper limit,
based on assigning the worst case scenario costs to all scenarios, is highly pessimistic and cannot be
substantiated. The benefit based on the revised approach proposed in this report is less than half of the
estimated regulatory costs despite retaining much of the conservatism in the EC assessment.
The postulated 50% reduction in incident costs also seems particularly optimistic given that more than 90%
of the offshore oil and gas activities in European waters already fall within the already highly regulated
UKCS and NCS area. The EC Impact Assessment itself says of North Sea regulations bearing in mind
that the region's risk-based regulatory framework is considered at present amongst the very best in the
world. Since the Deepwater Horizon event the Industry has introduced more guidelines around well
operations the benefits of which are not included in the EC Impact Assessment.
If the reduction in major accidents costs were less, then the disparity between the regulatory costs and the
benefits becomes greater. For example, if the reduction in accident costs in Option 2 was 20% rather than
50%, then the regulatory costs would be more than five times the benefit achieved. This provides a clear
illustration of the fundamental flaws in the cost benefit analysis presented in the EC Impact Assessment.

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Summary and Conclusions

The review of the EC Impact Assessment has shown:

The frequency assigned to blowouts in the EC Impact Assessment that have a duration of 15 days
or more is in agreement with industry data and is not disputed.
The consequences of blowouts in the EC Impact Assessment are based on high flow, 50+ day
events which the data shows are a very low proportion of blowout events.
Industry data shows that 30% of blowout events are associated with wells being drilled for
exploration and appraisal.
70% of blowout events are associated with production wells which will have much reduced
consequences compared to the upper bounding case used in the Impact Assessment, (Deepwater
Horizon).
A survey of UKCS operators carried out in 2011 showed that of the current oil production wells only
54% flow naturally and only 22% flow at naturally a rate of more than 1000 barrels of oil per day
(bopd), i.e. 2% of the Deepwater Horizon flow rate.
The upper bound of the cost estimates used in the EC Impact Assessment for longer duration
blowout events (30,000 million) is considerably higher than what could be considered a
representative cost for a longer duration blowout event.
Using more realistic, yet still conservative, estimates of the costs of blowout events, the cost of
longer duration blowouts is calculated to be of the order of 62 million per year, giving a total cost
of all major accidents of 127 million.
The EC Impact Assessment assumes a reduction in incident costs of 50% by the introduction of EU
regulation despite stating in relation to North Sea activities bearing in mind that the region's riskbased regulatory framework is considered at present amongst the very best in the world
90% of the offshore oil and gas activities in European waters fall within this risk based regulatory
framework.
The reduction in incident costs also takes no account of changes already, voluntarily, introduced by
the UK oil and gas Industry in the management of well operations post the DWH event.
Accepting the EC estimate given in the Impact Assessment that a reduction in incident costs of 50%
will be achieved by the introduction of EU regulation, a reduction in costs to 63.5 million will be
realised. The costs of the proposed regulatory change, at over 130 million, far outweigh the
benefits.
If the benefit from the regulatory change is less, say a 20% reduction in incident costs, the
regulatory costs are more than five times the benefit obtained.
Given these findings, it is concluded that the cost benefit analysis given in the EC Impact Assessment is
fundamentally flawed and that the assertion that it supports the introduction of EU wide regulations (Option
2) is invalid.

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References

[1]

Commission Staff Working Paper Impact Assessment, Accompanying the document Proposal
for a regulation of the European parliament and of the council on safety of offshore oil and gas
prospection, exploration and production activities, sec(2011) 1293 final dated 27 Oct 2011.

[2]

Commission Staff Working Paper Impact Assessment Annex 1, Accompanying the document
Proposal for a regulation of the European parliament and of the council on safety of offshore oil
and gas prospection, exploration and production activities, sec(2011) 1292 final dated 27 Oct
2011.

[3]

Blowout Frequencies, OGP report 434-17 March 2010

[4]

DNV Memo No: 13QEL2Z-1/BRUDE, 06 Oct 2011.

[5]

Blowout and Well Release Characteristics and Frequencies, 2006; SINTEF, STF50 F06112, 2006.

[6]

Blowout and well release frequencies based on SINTEF offshore blowout database 2010
(revised). Scandpower report No. 19.101.001-3009/2011/R3

[7]

Environmental Risk Assessment of Exploration Drilling in Nordland VI, Det Norske Veritas, Report
No.20/04/2010,

[8]

Hess environmental statement, Appraisal Well 204/10a-D (Cambo 4), Hess document number
ASE-177, May 2011

[9]

Worldwide Analysis of Marine Oil Spill Cleanup Cost Factors, Dagmar Schmidt Etkin, 2000,
Presented at Arctic and Marine Oil Spill Program Technical Seminar,
http://www.environmentalresearch.com/erc_papers/ERC_paper_2.pdf

[10]

Oil Spill Compensation and Response Cost Study (UKCS), L40147 (Draft under peer review),
Oil Spill Modelling for UK Offshore Locations Interim Report, L40088 (v2), BMT ARGOSS

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Appendix A Clean up Costs

Base clean up cost presented in [9], are given in Table 2, note that values for European and North America
waters are given.
Modification factors are presented that allow the base cost to be modified for different types or spills. These
are reproduced in Table 3.
Table 2 Average Per-Unit Marine Oil Spill Cleanup Costs By Nation/Region (1999 US $) reference [9] Table 9
Region

Cost

Region

Cost

Denmark

$11,180.41

Netherlands

$6,655.37

Estonia

$6,820.62

Norway

$23,118.08

Finland

$2,115.29

Spain

$438.68

France

$2,301.58

Sweden

$15,642.36

Germany

$10,702.67

UK

$3,082.80

Greece

$8,530.29

Yugoslavia

$1,541.40

Ireland

$4,807.49

North American Values for comparison

Italy

$6,541.19

Region

Cost

Latvia

$9,212.35

Canada

$6,508.14

Lithuania

$78.12

United States

$25,614.63

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Table 3 Cleanup Cost Factor Modifiers ([9], Table 10)

Cost factor

Type

Modifier

Oil type

No.2 Fuel (diesel)

0.18

Light crude

0.32

No. 4 fuel

1.82

No. 5 fuel

1.82

Crude

0.55

Heavy crude

0.65

No. 6 fuel

0.71

< 34 tonnes

34-340 tonnes

0.65

340-1,700 tonnes

0.27

1,700-3,400 tonnes

0.15

3,400-34,000 tonnes

0.05

>34,000 tonnes

0.01

Near shore

1.46

In-Port

1.28

Offshore

0.46

Dispersants

0.46

In-Situ burning

0.25

Mechanical

0.92

Manual

1.89

Natural Cleansing

0.1

0 ~ 1 km

0.47

2 ~ 5 km

0.54

8 ~ 15 km

0.54

20 ~ 90 km

0.61

100 km

1.06

500 km

1.53

Spill size

Location type

Primary Clean up Method

Shoreline Oiling

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Appendix B Incident Data

The National Oceanic and Atmospheric Administration (NOAA) has the responsibility, under the National
Contingency Plan, to provide scientific support to the U.S. Coast Guard (USCG) in planning for and
responding to spill emergencies in the marine environment.
NOAA produced a list of case histories covering the period 1967 to 1991 4. The case histories include all
spills that:
Exceeded 100,000 barrels internationally
Exceeded 10,000 barrels in U.S. waters
Involved the use of dispersants
Involved bioremediation
Involved severe environmental impacts: (more than 500 birds killed, more than 100 mammals killed,
smothering of over a mile of intertidal zone, closure of fisheries, etc.
Of this list of 110 incidents during the 25 year period only nine where identified as platform spills or blowouts
that lasted more than one day (note that two incidents due to war in Iraq and Kuwait have been excluded).
The remainder of the incidents were primarily tanker spills.
The figure below shows the spill duration and total spill volume for the platform or blowout incidents quoted
by NOAA. Data points for the Montara (which occurred after 1991) and Deepwater Horizon blowouts have
also been added to this figure.
The range of values covered in the Oil & Gas UK case studies have been superimposed on this figure. This
indicates that the cases selected for the Oil & Gas UK study are toward the upper end of the consequence
categories previously experienced worldwide.

Oil spills case histories 1967-1991, NOAA Hazardous materials response and assessment division

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10,000,000

Deepwater Horizon

Total Spill (barrels)

1,000,000

100,000

10,000
1

10

100

1000

Days
CMPB
Funiwa
Shell
Deepwater Horizon

Ekofisk
IXTOC
Trinimar
Montarra

Hasbah
SB
YUM
Oil & Gas UK

Figure 2: Significant Blowout Events

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