The Offshore Pollution Liability Association Ltd

The Offshore Pollution Liability Agreement (OPOL)

This explanation and the questions and answers that follow are intended to summarise the principal points and effects of OPOL, but should not be taken as a substitute for and do not form a part of OPOL itself, or the associated documentation, to which reference should be made.

Parties to OPOL

The parties to OPOL are operators of, or those who intend to become operators of, offshore facilities used in connection with exploration for or production of oil and the exploration for or appraisal of gas. It was decided that only the operators should be parties, since they are more directly involved and in a better position than non-operators to assume the obligations imposed by OPOL. For example, facilities such as pipeline systems could serve a number of different participants, but have only a single operator whose responsibility is usually defined by an operating agreement.

Application of OPOL

OPOL applies to those offshore facilities from which there may be a risk of an escape or discharge of oil causing pollution damage. These facilities are wells, drilling units, platforms, offshore storage/loading systems and pipelines, where these are to seaward of the coastal low water line, including gas wells when being drilled, re-completed or worked upon. They do not include permanently abandoned wells, installations or pipelines, or facilities for the production, treatment or transport of natural gas or natural gas liquids.

Scope of OPOL

All offshore facilities in the OPOL designated States operated by a member are generally subject to OPOL. In certain circumstances an application for membership may be accepted on the basis that not all of the applicant's operated facilities in the designated States will be subject to OPOL.

OPOL covers escapes or discharges of oil from offshore facilities within the jurisdiction of any State that is specified in OPOL. It applied initially to offshore facilities within the jurisdiction of the United Kingdom of Great Britain and Northern Ireland, but has subsequently been extended to offshore facilities within the jurisdictions of Denmark,the Federal Republic of Germany, France,the Republic of Ireland, the Netherlands, Norway, the Isle of Man , the Faroe Islands and Greenland, but excluding those offshore facilities located in the Baltic and Mediterranean Seas, and can be extended so as to apply to offshore facilities within the jurisdiction of any other State.

The location of the pollution damage or the place where remedial measures are taken need not necessarily be within waters within the jurisdiction of a State designated in OPOL; the location of the offshore facility is the governing factor.

Claims under OPOL

There are two classes of claimants under OPOL:

a) Public Authorities, defined so as to include Governments and other public bodies and municipal and local authorities, may claim in respect of remedial measures taken to prevent, mitigate or eliminate pollution damage, or to remove or neutralise the oil following an escape or discharge. The cost of remedial measures undertaken by the party to OPOL, who is the operator of the facility, may be set off against the total amount of compensation that would otherwise be available under OPOL to meet the claims of Public Authorities.

In addition OPOL operators are required to be responsible for the costs of those remedial measures which they do undertake.

These measures do not however include the cost of well control or any measures taken to protect, repair or replace the facility. The reason for giving the party involved right of set off is to encourage it to take prompt action upon the occurrence of an escape or discharge of oil.

b) Anyone, including a Public Authority, may claim compensation for pollution damage. This is defined as direct loss or damage caused by contamination, but excludes loss of or damage to the facility which is the source of the escape or discharge of oil.

Claims are made directly against the party concerned, and must be filed within one year of the date of the incident which resulted in the escape or discharge of oil.

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