After over 18 months of consultations, the Bulgarian government adopted a new ordinance on the safety of offshore oil and gas operations (the “Ordinance”), which was promulgated in issue 103 of the State Gazette dated 27 December 2016 and applies to the existing installations and infrastructure from 30 November 2017 onwards.
The Ordinance implements the provisions of Directive 2013/30/EU on the safety of offshore oil and gas operations (“Offshore Safety Directive”). EU Member States had until 19 July 2015 to implement the Offshore Safety Directive, but Bulgaria and some other EU member-states missed this deadline. Due to the delay in implementation, on 17 November 2016, the European Commission initiated infringement proceedings against the United Kingdom, Poland, Spain and Bulgaria; these states were given two months to comply with the European legislation.
The Ordinance provides a framework regulation listing the future secondary legislation to be passed rather than a complete set of rules. This is an obvious risk for the operators due to uncertainty and potential over-regulation.
The Ordinance nominates six public bodies as the competent authorities: the Council of Ministers, the Ministry of Energy; the Ministry of Transport; the Ministry of Interior; the Ministry of Defence; and the Ministry of Foreign Affairs. However, having several competent authorities, despite being in line with the provision of Art. 8 of the Offshore Safety Directive, is not in line with the local administrative traditions and principles. Given the new government’s commitment to deep offshore exploration in the “Han Asparih”, “Silistar” and “Teres” blocks, it will be important to monitor the practical implications of the Ordinance and the coordination of these public bodies with combined powers in this important field.
Below is an overview of the six competent authorities’ various powers under the Ordinance:
• The Ministry of Transport (the “MoT”), somewhat unnaturally, is the leading competent authority. Under Art. 3, para. 6 of the Ordinance, once the number of the normally attended installations exceeds six, the MoT ‘switches on’ as the main competent authority. The MoT is also obliged to control the technical equipment and the minimal equipment for reaction in the case of oil spills and takes the lead in the liquidation of potential spills.
• The Ministry of Energy (the “MoE”) provides the annual reporting obligations to the EU Commission and receives and reviews the reports of the title-holders. The MoE also develops the policy, processes and procedures for assessing the reports of the title-holders; develops and manages the database of the reports; and verifies compliance. Very importantly, the MoE also adopts the internal response plans.
• The Council of Ministers is charged with adopting a National strategy for offshore safety; a National emergency response plan; an annual Report on the implementation of the OS Ordinance; Financial and organizational measures for effective implementation of the OS Ordinance; etc.
• The Ministry of Defense assists, by means of the Bulgarian Navy, in case of major accident.
• The Ministry of Interior assists for the development of the national emergency response plan.
• The Ministry of Foreign Affairs assists with international aspects of the Ordinance’s implementation.
If you would like more information, please contact Kostadin Sirleshtov.