Abstract

In many developing or newly opened countries, the lack of environmental regulations is more confusing and detrimental to project planning, timing and finance than in those countries with seemingly stifling regulations. A government without knowledgeable, experienced environmental and mineral resource staff presents real challenges to a project. The regulatory uncertainties faced by the petroleum industry as it pursues exploration and development around the globe are sometimes monumental. The interrelationship of international companies, their stockholders, standards organizations, financial institutions, host country governments, and non-government special-interest groups must be determined for each project. Each of these entities can have significant effects on projects. It is, however, in many cases, a country's lack of environmental policy and established, written regulations that is the primary inhibiting element of projects and the planning element with the longest lead time.

Introduction

Major international petroleum companies are seeking opportunities in developing or redeveloping countries. Many of these countries have not enacted modem oil and gas or environmental laws and regulations. In the transition from central command and control to distributed authority type of government, individual ministries are becoming the dominant regulator of oil and gas and environmental, health and safety (EHS) issues. Because these ministries do not have clearly defined and published EHS and mineral law regulations and procedures, getting project permits becomes a lengthy negotiation effort.

Without central government control, new, non-government organizations (NGOs) are voicing their concerns as EHS stakeholders. Project financing institutions are also expressing their individuality as a stakeholder.

Usually, neither the ministries nor the NGOs are current with oil and gas exploration and production (E&P) research, technology, standards, and practices.

The ministries or other stakeholders rarely understand each other's concerns and their total impact on project timing.

Uncertainty of regulatory requirements and difficulty of identifying all stakeholders impact operations, timing, and project costs. The amount of time, effort, and cost to get a project permitted can render it uneconomic or lower its priority in favor of other opportunities. Many projects are caught in this permitting stranglehold.

Countries must move quickly to adopt internationally accepted E&P mineral and EHS operating regulations. These must be codified and accepted by all ministerial and other stakeholders.

EHS professionals must be involved very early in concession negotiation. This will allow early identification of access restrictions, permit requirements, stakeholders, timing constraints, operating parameters, and costs.

Situation Statement

The scenario: A project leader comes to your office and inquires about the permitting timeline to shoot seismic and drill exploration well(s) in a new interest area that includes a national preserve. He wants a two-to-three page summary of work scope, agencies involved, permits needed, critical-path timeline, and costs.

When the U.S. is the area of concern, your research takes you to the Code of Federal Regulations and state rules, and with a telephone network, to colleagues that have worked this area or a similar situation. You can also call the area office of the principle jurisdictional agency to get official advice and forms.

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