What is an International Proxy, and How Does OTC Fit that Role?
The Bureau of Safety and Environmental Enforcement (BSEE), Petroleum Safety Authority Norway (PSA) and NORSOK act as the regulatory authorities that recommend policies and procedures to govern the operations of oil and gas exploration and production companies operating in the U.S and North Sea regions. These are robust, well-staffed governing bodies, but the reach of their authority is limited to these countries. Many West African and Central and South American countries do not have their own regulatory authorities to oversee oil and gas operations within their borders. In these instances, we often see that BSEE, PSA or NORSOK requirements are voluntarily adopted by international oil companies (IOCs) working in these developing countries as a compliance reference. In some cases, the standards of these countries are contractually mandated by the leasor in nations lacking regulatory resources. Without fully developed regulatory compliance infrastructure or the engineering review staff to issue permits based on a thorough analysis of operations, these developing regions rely on third parties to ensure that their regulatory policies and requirements are met by the operator. A third-party, independent, special engineering firm such as OTC can review the operator’s plans and issue documents and statements of fact certifying that the operation is being planned or conducted according to the rules and regulations that the country chooses to enforce.
The role of a proxy
OTC’s staff works with operators, production companies and their contractors to review their exploration or decommissioning plans against compliance regulations, make approvals and issue what is in essence a permit for them to proceed, certifying that the operation is being conducted according to required regulations.
When OTC performs this type of work, we make ourselves available 24/7 during operations and can even place inspection personnel on location to prove to the local regulatory authority that the operation has been properly reviewed and approved. If there are any changes required to be made to the plan, we can review them and issue a ‘departure,’ which states that the new plan still meets the requirements of the regulatory structure that the operator is following.
In summary, the operator benefits from this service because they have an independent third-party that stands behind the work that was completed and the country in which the work is being performed benefits because they are assured of operational integrity by a third-party.
An important tool in decommissioning
OTC’s regulatory proxy service exists for good reason, and it is particularly beneficial during decommissioning work. There is currently a tremendous amount of decommissioning work to be carried out in developing countries in West Africa and Central and South America, and as operators undertake the task of returning the environment to how it used to be, OTC can be on hand to assure the country and operator that everything is being done according to regulations. With a regulatory compliance expert like OTC serving in this vital third-party role, everyone involved can be assured the work has been professionally reviewed and can be safe in the knowledge that they will avoid any future calls to rectify errors and redo work at the cost of millions of dollars.
