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Lloyd's Maritime and Commercial Law Quarterly

BLOW-OUT IN THE NORTH SEA

Norwegian viewpoints on liability from pollution damages

Gunnar Brask

Storebrand Insurance Co., Ltd., Oslo.

Most authors of legal articles have their feet planted on solid ground. Usually there exist enactments, Court decisions, or text-books on the subject either from their own country or from neighbouring jurisdictions. As far as the liability aspects of the offshore oil and gas activity in the North Sea are concerned there is not much help to find from such sources. Neither have we experienced any substantial pollution damage up to now and what I am going to write about the subject will therefore have to be accompanied by expressions as “perhaps”, “probably”, “if”, etc.
The offshore activity has recently started up in an area which for a thousand years has been reserved for vessels of all sizes and shapes employed in all sorts of trade. This typical marine area has in the last decade been invaded by Non-Marine people as technicians and engineers, rough-necks, and navvies. They have brought along drilling equipment, storage tanks, platforms for crew and administration, pipe-laying barges, etc. Down on the seafloor divers are stumbling around between various set-ups of ventilators and security measures as well as pipelines and pump installations. This mixture of Marine and Non-Marine activity naturally creates a collision of two legal systems, the Maritime and the Non-Maritime Law.
A further difficulty is the fact that the North Sea now is divided between the surrounding states which means that their jurisdictions meet mid sea. In case of a major oil pollution more than one jurisdiction will be involved. In the present article this problem of international law shall as far as possible be avoided. Just one more reservation—it is the legal position of the claims following an oil pollution which is the subject matter, not damages to or loss of installations, vessels, pipelines, etc. Pollution damages caused by transportation of oil in ships will also be kept outside the scope of this article.
The four questions which shall be raised are as follows:
  • I. How can a major oil leakage occur?
  • II. Who will suffer damage?
  • III. Who can be held liable?
  • IV. Who can pay a compensation of say £20 million?

I. How can a major oil leakage occur?

There are obviously many possibilities. During the drilling operation a high-pressure oil reservoir is suddenly and unexpectedly hit. This can in itself result in a blow-out. The drilling rig can also be damaged by an accident, e.g., caused by heavy weather, fire, or explosion, or it may be run into by a vessel. We have had situations in the North Sea when platforms have been drifting without control, or when platforms have been broken down and the various parts have been drifting along. If these runaways should hit another drilling platform during a vital stage in its drilling operation, this could create a very dangerous situation. Blow-Out Preventers (BOP), choke/kill valves and other devices intended to prevent anything from going wrong are certainly carefully tested. As they are man-made and also handled by man, we know, however, that the impossible might be possible. Examples can be taken from aircraft crashes or railway catastrophes where the human element often has proved to be the weakest point in the chain of security measures.

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