Wednesday 18 August 2010

Oil & Gas UK Comment on Increase in OPOL Limit

Oil & Gas UK today (18 August) welcomed the measure taken by the members of the Offshore Pollution Liability Association Ltd (OPOL) to increase to US$250 million the limit of liability mutually guaranteed by the industry to cover third party costs of an oil spill on a ‘no fault’ basis. While companies operating in the UK are responsible for environmental or other material damage resulting from operational failures on their installations and there is no legislative cap on the extent of that responsibility for clean-up and compensation, in 1975, the UK oil and gas industry established OPOL.

OPOL administers an industry mutual agreement which requires each operator to accept strict, ‘no fault’ liability for pollution damage and reimbursement of public authorities for remedial measures up to a pre-determined limit. Oil & Gas UK is pleased to see that an increase in that limit to US$250 million, which is sufficient to cover the third party costs of an oil spill in previously modelled spill scenarios, has been agreed.

The Oil Spill Advisory Group (OSPRAG) has also commissioned, through its indemnities and insurance review group (IIRG), modelling of additional spill scenarios with the aim of providing a more comprehensive picture of potential oil spill costs. The IIRG’s work is just one strand of the comprehensive response by the industry, regulators and trade unions to the Gulf of Mexico incident to ensure our oil spill prevention and response provisions continue to be fit for purpose. In addition, OSPRAG is assessing the options for tertiary oil spill capping and containment mechanisms and reviewing the UK’s oil spill response capacity.

Ends

For more information, please contact Sally Fraser on 020 7802 2404.

Note to Editors

1. Oil & Gas UK is the leading representative organisation for the UK offshore oil and gas industry.  Its members, which number over 100, are companies licensed by the Government to explore for and produce oil and gas in UK waters and those who form any part of the industry’s supply chain.
2. Established shortly after the incident in the Gulf of Mexico, the UK’s Oil Spill Prevention and Response Advisory Group (OSPRAG) is the focal point for the sector’s review of the industry’s practices in the UK. For more information on OSPRAG, visit www.oilandgasuk.co.uk/osprag/