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Two new legal instruments dealing with the reporting and monitoring of casualties and environmental incidents in the oil and gas sector have been published as part of the ongoing Mexican energy reform.

Mexico’s energy sector has been under reform since 2013, going from a state dominated industry to now opening up to foreign and private direct investments and exploration.  In order to better regulate the industry, the Mexican Government established a new Authority in 2014 called the National Agency of Industrial Safety and the Protection of the Environment in the Hydrocarbons Sector (ASEA), which is equivalent to the BSEE in the US. Companies engaged in operations in the Mexican oil and gas sector should note that, during autumn 2016, the ASEA and the Mexican Navy published two new legal instruments dealing with the reporting and monitoring of casualties and environmental incidents in the oil and gas sector. The background for these new regulatory changes is the number of environmental incidents in the hydrocarbons sector, among them the Deepwater Horizon/Macondo oil spill.

New Guidelines for reporting incidents and accidents

The Guidelines for Reporting the Occurrence of Incidents and Accidents (the Guidelines) to the ASEA entered into force on 5 November 2016.

The reporting requirements contained in the Guidelines apply only to so-called Regulated Entities [Regulados] and according to the Mexican Hydrocarbons Law, companies involved in any of the following activities are deemed to be Regulated Entities:

  • Initial assessment and superficial exploration; exploration and extraction of hydrocarbons which may include drill-ships, jack-up rigs, semi-submersible rigs and other rig designs;
  • Processing (including FPSOs and similar types of vessels), refining, selling, marketing, transport (including oil tankers) and storage of oil;
  • The processing, compression, liquefaction, de-compression and regasification of Natural Gas, as well as its transport, storage, distribution, and retail to the general public
  • The transport (including LNG vessels), storage, distribution and retail of liquefied natural gas;
  • The storage and transport by pipelines of petrochemicals, obtained from natural gas or oil refined products.

According to ASEA only entities holding a concession or contract granted by the National Hydrocarbons Commission are obliged to comply with the reporting requirements contained in the Guidelines. Hence, if a Gard Member or client is engaged in the extraction of hydrocarbons, as a contractor to a concession holder, it is the responsibility of the concession holder to comply with the Guidelines, and not the owner or operator of the offshore unit or vessel.

According to the Guidelines, Non-Regulated Entities such as companies operating tug boats, supply vessels, AHTS vessels, etc. are not obligated to report casualties or threats to the environment to ASEA. 

 

Amendments to the marine pollution contingency plan

The revised National Contingency Plan to combat and control spills of Hydrocarbons and other Potentially Hazardous Substances Spills in the Mexican Maritime Zones (the Contingency Plan or the Plan), prepared by the Mexican Ministry of the Navy entered into force on 25 October 2016.

The Plan has been in existence for some time but has now been revised as part of the Mexican energy reform, taking into account the new regime of Mexican agencies overseeing the industry, such as the ASEA.

The aim of the Plan is to coordinate all government authorities/agencies when an oil spill threatens the marine environment with the Ministry of the Navy having a leading role in implementing and coordinating all governmental actions needed to comply with the Plan.

In case of a pollution incident, the role of private companies participating in the Mexican energy sector is important but limited. Private companies’ involvement is mainly confined to informing/reporting an event causing pollution of the marine environment, while all follow-up and coordination of the incident itself will be undertaken by the relevant government agencies. Unlike the Guidelines, the obligation to notify the authorities of a casualty leading to an oil spill and a threat to the marine environment can be done by any person or entity with knowledge of the casualty or incident. The Plan, however, suggests that such an obligation lies in principle with the polluter or the party responsible for the source of the pollution.

Recommendations

Gard’s Members and clients engaged in operations in the Gulf of Mexico are advised to take note of the above and ensure that their own operating procedures concerning reporting of casualties and pollution incidents are in line with the new requirements. The templates to be used for reporting incidents under both the Guidelines and the Plan can be found here. The forms are in the Spanish language only.

We would like to thank Gard’s correspondents, Pinedo Abogados, Mexico City, for their assistance in the preparation of this Alert.

 

Note: Our Gard Alert of 20 May 2016 addressing US well control regulationsmay also be of interest to contractors engaged in drilling operations.