THE ATLANTIC COUNCIL OF THE UNITED STATES
BLACK SEA ENERGY & ECONOMIC FORUM 2010
SESSION IV: AFTER THE GULF OF MEXICO:
HYDROCARBON DEVELOPMENT AND RISK MANAGEMENT
WELCOME AND MODERATOR:
DP HOLDING SA
DEP. MINISTER OF ENVIRONMENT, ENERGY & CLIMATE CHANGE HELLENIC REPUBLIC
CHAIRMAN OF THE BOARD,
PRESIDENT AND CEO,
FRIDAY, OCTOBER 1, 2010
Federal News Service
OBIE MOORE: This particular panel – I’m very pleased to be the chair of this distinguished panel. My name is Obie Moore. I’m the CEO of DP Holding SA, which is a Swiss-based investment group that is owned by Dinu Patriciu, who is the namesake and founder of the Atlantic Council’s Eurasia Center in Washington, D.C. We’re going to talk today about an event that everyone knows about, has read about, is aware of most everywhere on the planet. The events in the Gulf of Mexico with the blowout of the Macondo well destroying the Deepwater Horizon oil platform were events that have reminded all of us of the environmental, economic and political risk inherent in hydrocarbon development.
We will talk today about the lessons from this experience and risk management strategies that obviously now are being reevaluated. What are the right lessons for us to take from this and more specifically how to assess these range of conclusions from this event for government regulators, especially here in the Eurasian oil and gas development region.
Let me first just briefly introduce our panel here today and extend apologies for Deputy Minister Ignashchenko, who is not able to be here in Istanbul this week. But also I think we may – Minister Khetaguri, minister of energy from Georgia may not be able to attend. But in any event, I think we have three persons here, very well prepared to talk about this subject.
First let me introduce His Excellency Yannis Maniatis, who is the deputy minister of environment, energy and climate change for the Hellenic Republic. He’s a former member of parliament. He also held important positions with the ministry of transport and was president of the Postal Savings Bank. In addition, he is a past board member and head of green development of the Andrea Papandreou Institute.
From private industry, we’re honored to have Mr. Nusret Cömert, who is the chairman of the board of PETFORM, which is the Petroleum Platform Association, and his fulltime job is as managing director of Shell Exploration & Production Gas in Turkey. His career started with Shell after his degrees in mechanical engineering with a master’s degree in business after positions in London and elsewhere. He’s risen the ranks through Shell Oil and also serves as the president – as the chairman of this platform association.
Lastly, we’re pleased to have Jay Glick, who is the president and chief executive officer of Lufkin Industries. After spending most of his 36-year career in the oil industry living in the U.K. and the Eastern Hemisphere, Jay joined Lufkin and became its president and CEO and they are expanding aggressively in Europe these days.
Let me just first just kind of set up and just focus on a couple of facts, no more than a couple of facts, but just kind of run though the sort of litany of events and then we’ll turn it over to our panelists. At approximately 9:45 p.m., on April 20, 2010, a seafloor oil gusher burst up the well platform and exploded, tragically killing 11 oil platform rig workers and injuring 17 others. The oil rig sank two days later. It was a total loss. It sunk to the bottom of the ocean. The spill that began to then spread throughout the Gulf of Mexico, quickly surpassed the volume of the 1989 Exxon Valdez oil spill as the largest ever to originate in U.S.-controlled waters.
At peak, there were 3.5 million feet of containment boom that were deployed in response to the oil spill. By June, the oil had washed up on the pristine shores of the outer barrier reefs that guard the shores of Mississippi, Alabama and Florida. As to the surface spill, more than 2,600 vessels were deployed, dozens of aircraft and more than 25,000 personnel remain today deployed in the response effort to this oil spill.
In June, after meeting with President Obama, BP executives agreed to create a $20 billion oil response fund, to escrow those funds for expected damage claims. The fishing industry, incredibly hard hit; the National Oceanic Aviation Administration (sic) posed a fishing ban which still remains in effect for approximately one-third of the Gulf area, which is about 210,000 square kilometers.
Although the United States Oil Pollution Act of 1990 limits BP’s liability for non-cleanup cost to $75 million unless gross negligence is proven, BP in a very strategic move said that they would pay – they didn’t want to get into the issue apparently of gross negligence and said they would pay for all cleanup and remediation regardless of the statutory liability cap. So far they’ve spent approximately upwards to 4 billion U.S. dollars. Finally on September 19, five months after the spill, BP, the company leasing the Deepwater Horizon oil drilling platform, finally submitted and sealed the Macondo well.
Now, there’s more effects that will turn to assessing and compensating for the damages. Lawsuits have been filed against not only BP but Transocean, Cameron International, Halliburton Energy Services. In addition, there’ve been over 68,000 legal claims for damages having been submitted to a specially created Gulf Coast claims facility, with $240 million already paid out to claimants. This is something that although it has been capped, it is not going to go away. And I think it’s a timely subject for us to assess this and see how it’s affecting the business aspirations and ongoing activities of participants here in this conference and to also hear from governments’ viewpoint.
Let me just turn first, if I could, to Mr. Cömert. I’ll just follow the order of people on the agenda. How are these events – whenever it sunk in, how did you industry, your association and Shell Oil respond to this? How has it affected the job that you have?
NUSRET CÖMERT: Thank you, Mr. Moore. First of all, I would like to again reiterate that I’m sitting here as the chairman of PETFORM, fully and only representing the industry and secondly I would like to take you to first – (inaudible) – challenge. Perhaps it can also facilitate the discussion in Turkey because the main role of our association – this is an association established 10 years ago for the subject of exploration and production and also the gas industry.
MR. MOORE: As long as we just – but feel free to jump into any comments of Mr. Cömert. This is an open discussion and we’re trying to synthesize information here.
MR. CÖMERT: Thank you, very much, please do so, and our main contribution has been on the regulatory front and legislation front in the industry for the development but to help extract hydrocarbon resources, oil and gas resources, of Turkey, if any, and also to support the gas liberalization activities and then also to help develop we believe on the security of supply of particularly the region. So going back to – sorry, the BP part, the developmental challenges, so we all know that the world population is growing.
The world business economic development is there, mainly in India and China. The big portion will be there and the need for energy is there and we all know that to support this wealth and economic development, energy demand is also increasing quite significantly and well, despite good developments on the renewable side, which will play an important role in the future, we believe, and also the nuclear development also. But for some obvious reasons oil and gas will continue to play an important role or the most important role for the future.
So the world will need it and easy oil alone will not be sufficient to meet that demand. That requires more difficult exploration and more difficult activities within the whole world including unconventional. And everything is putting a pressure on the environment, both emissions and also all kind of environmental challenges. So this is a challenge the whole world, the human being is facing and the industry is facing. From thereon, of course the Deepwater development is also part of that challenge on land also.
MR. MOORE: Let me ask you directly. Do you think – because there is pressure to look for alternative and renewable energies, there’s pressure to expand the boundaries of hydrocarbon exploration that then led to the deepwater oil technology being deployed. Do you think this event in the Gulf of Mexico will affect extending the frontier, if you will, to deepwater drilling, that that will be globally surpressed as a result of this?
MR. CÖMERT: Well, we all will see. But my point was unfortunately the easy oil that we know and onshore cannot – to deep wells the oil and gas could be produced and served to the market would not be sufficient. So all kind of development including deepwater and all others will continue and the technology is there. The technology is there. So that would be what I wanted to underline. That would be part of the fact and the life for the future.
MR. MOORE: I want to come back to that but I want to turn to Jay Glick and get Jay’s views. Again, these events in the Gulf of Mexico, how has that affected your company’s activities, risk mitigation, crisis management and then specifically about your view about extending, whether this will have any effect on deepwater drilling in the future.
JAMES GLICK: Right, let me start of first by saying I’m attending this conference because we are opening an operation in Romania. So we will have involvement in the Black Sea. But I’m going to be speaking to this particular topic from the vantage point of my 20-year care with Cameron, who you mentioned earlier, with Cameron-made blowout preventers, and my involvement in the offshore drilling industry started back in 1974 in the early days.
So my comments really will be directed from that knowledge and that background. I think it’s important to remember two things as we look at the Macondo Deepwater Horizon tragedy. First of all, what was it and what was it not? It was a failure of judgment. It was a failure on a number of parties’ part to follow best industry practice. What it was not was an equipment failure and it wasn’t an indictment of the process of deepwater drilling.
There are a number of applications. I think there’s something like 35,000 wells that have been drilled offshore or globally. You can count on one hand the number of problems that have been created from those wells. So there was no reason that the blowout occurred and you can say, well, it did occur. And even though there were judgment errors made, are those going to be repeated; are they inherent in the process; and why is it important to distinguish between what it is and what it isn’t?
I think it’s important because the solution and the government response needs to be based on what caused it and we need to not overreact to the tragedy and come up with inappropriate policies that potentially could create a situation or create an environment in which another tragedy is lurking. So I think it’s very important that the government response be measured. I think it’s important that the industry participation in developing the correct response be listened to and I think that it’s very critical that we not overreact.
As you were saying, everyone recognizes that there’s going to be an ongoing demand for energy. The easy energy has been found for the most part. So we’re going to go into more and more hostile environments to find the new sources and we need to have policies that are appropriate for that.
MR. MOORE: Okay, thank you. Let me turn to Deputy Minister Maniatis. Mr. Minister, from your viewpoint and involvement in the green movement in Europe, how do you look at this from the right policy perspective? Is this something that the environmental advocates and watchdogs and even the U.S. congressional oversight agencies overreacted to and just saw this as a public relations opportunity to advocate their positions, that it wasn’t as harmful to the industry and to the Gulf of Mexico wildlife habitat as was originally communicated?
YANNIS MANIATIS: Well, first of all I think that we all agree that we lived a tragedy, the first point. The second point is that we are discussing this issue in a region of which here, the Black Sea, Mediterranean, Caspian Sea, in a region which is very sensitive environmentally, historically, from a cultural heritage point of view and this region is even more sensitive in the sense of accidents. The third point is I think that we have to reexamine the whole procedure.
Of course we have not so much easy oil and we have to go on with offshore drillings. It’s obvious for the next years. But at the same time, I think that we need to reexamine the procedure from legislation, for example, filling all the gaps in legislations. Second, to ensure that we have a coordination among the controllers of the whole procedure; I mean, the national controllers of the whole procedure.
Third, we have to take measures in order to improve our reaction when an accident happens and then what we’re doing after the accident. And of course I think that talking about a region like Black Sea where many countries, many states – there are many states, we have to have in mind that we need very close regional cooperation. I mean cooperation among the various states of the region.
So concluding, I think that we need governments, political elites, political staff, political persons and the industry – need to see again the whole procedure in order to give to the society another approach for both sides, for more oil. We need even more oil and at the same time to go on with more rapid procedures in renewals and energy savings, energy efficiency. So this is a balance between the development, the economic development from one side and from the other side, for the protection of the environment.
Concluding, I think this tragedy will affect our whole approach on what we are going to do in Arctic, in Baltic Sea, in all the environmentally sensitive areas of our planet. So I think that the American administration has reacted in a proper way. I don’t really know what is the real causes of this tragedy. I think that we will learn the truth in one, two or three months, but we need to learn the true causes. And finally, we need to react. I mean European Union, Caspian Sea countries, Black Sea countries and Mediterranean countries as a whole entity, intergovernmental, interregional entity in order to avoid the repetition of such a tragedy and if something happens, then to react in an even more rapid way.
MR. MOORE: I’d like to come back to this intergovernmental commission idea because one of the things we’re trying to do here at the Black Sea Energy and Economic Forum is to identify private sector and public sector cooperation to address and bring sophisticated knowhow to a sort of quasi-commission to create whether it’s white papers, strategy papers on which you can build upon.
But before going there, let me just – I saw Jay smile a moment there when we talked about the role of how the United States government dealt with this. I think the backdrop of this horrific tragedy was that it was in the midst of a global economic – unprecedented global economic downturn and secondly with the backdrop of the Katrina hurricane that the previous administration – let’s say it did not fare so well in its management of that disaster. How does your view about the U.S. administration and all the government agencies responding to this, Jay?
MR. GLICK: Yeah. I think there were colossal errors made. But let me, before I get into that – one thing I think needs to be stressed is that prior to that accident there was a regiment of government regulations in place, all of which were well intentioned, everything from testing the blowout preventers every other week to the way various drilling procedures were approved.
I think if anything, one of the things that was demonstrated was the ineffectiveness of legislation that is aimed at regulating a process that really is a judgment-based process and occurs in real time with people making decisions, that the practicality of reviewing those decisions I think is questionable. But I think the other thing that it points out is that when you have inappropriate regulations, regulations that don’t really make a lot of sense in the context of drilling the well, you get the sort of things that happened in this particular case where the drilling contractor and BP I think were complicit in shortcutting or paying lip service to those tests.
When you read about the way some of the blowout preventers had been rigged so that they were actually testing with pressure being held from above just to satisfy the test. So one cavity of the blowout preventer was essentially wasted so that they could do this more accurately and test more quickly. It’s a ridiculous situation. So I think one of the cautions that I would urge regulators throughout the world is the thought that more regulation will be the solution I think is an error on the part of the regulators. What’s really required is more practical solutions developed from the industry and I think the contrast – I’ll get to your question about was the government response correct.
I think the government response was very kneejerk in the U.S. There was tremendous political grandstanding to tell a group of industry people that there are going to be criminal prosecutions and then haul them before the Congress to testify and expect them to be forthcoming with their testimony is just – it’s naïve at best and it’s cynical at worst. So it’s not a practical thing to do. But I think the government – and I think the cleanup was the second area that the government had resources that could have been marshaled much earlier and they failed to do that.
I do think that one of the things that will be an outgrowth of this is that the cleanup and spill containment devices will be much more highly developed. I think they’ll be deployed regionally. I think that’s a great area for cooperation between industry and governments. I think there was a lot learned about how in deepwater situations remote devices can be pre-engineered to shorten the response time on a blowout in which the blowout preventers themselves failed.
So I think there are a lot of things that were learned. But I would urge that as people look at governmental approaches to this, the model that I think should be used is the Cullen Commission’s response to the Piper Alpha disaster in the U.K. in 1987 in which government worked with industry and there were very practical polices developed that increased the safety in the North Sea. I hope something like that comes out of the Deepwater Horizon. But so far, the government approach would make me skeptical about that outcome being a possibility.
MR. MOORE: Before getting Mr. Cömert’s comments about industry here in the region in response, are you suggesting then that the Obama administration’s efforts to impose regulations, tighten regulations given the sophisticated technology deployed in deepwater drilling is a bit like trying to regulate morality? You just can’t quite do it?
MR. GLICK: I think there’s an element of that. I think what I’m more worried about is the fact that the industry was demonized to such an extent that it will be now very difficult politically for the Obama administration to include industry expertise in the development of those policies and I think that was a colossal error. I think the industry input is vital to sensible, practical policies and I’m afraid that public opinion has been coopted against industry to the point that it will make that dialogue very, very difficult right now.
MR. MOORE: Mr. Cömert, has the Turkish government or any of the governments in the region where your membership is active, have they seen a more aggressive response to your industry looking to more actively assess regulations, do a risk assessment of whether there are gaps in legislation? Do you feel regulatory pressure as a result of the event on the other side of the Atlantic?
MR. CÖMERT: When it gets to Turkey, the offshore drill exploration activities are still quite limited in Turkey as we highlight and we see this as a concern and problem. Only 1 percent of Turkish offshore has been explored.
MR. MOORE: Sorry, what percentage?
MR. CÖMERT: One percent.
MR. MOORE: One percent.
MR. CÖMERT: And only 20 percent of onshore has been explored and absolutely there is no data for the remaining part of that and we see that as a problem and we have continuously proposed some legislative and regulatory suggestions. We made some suggestions on this, how exploration activities could be further supported and expanded. In the past year, there has been very, very good activities in Black Sea in particular, very encouraging.
But we believe that more should follow. And for that one we have proposed a petroleum law, a new petroleum law to be enacted because the existing one is dated 1954 and the language is an old language that people can’t read. Although it served a purpose, there has been some issues around it and that has passed the parliament in 2007 but it was vetoed by the president of Turkey at the time. And now we propose that we sit and meet as an industry and a government on a new act addressing all the concerns and issues but certainly resolve more exploration activities because Turkey’s demand is increasing.
The region’s demand is increasing. Discussions are ongoing between whether oil and gas, particularly oil and gas should come to Turkey or should go to Europe and what the proportion should be where in Black Sea and in Mediterranean because we know in Mediterranean there are some structures which could be – we see promising. But then again, exploration activities are not there. Those companies, when we look at going to deepwater, several limited number of companies, they have the highest environmental problems.
Surely that situation has been analyzed and some learnings will be drawn surely. The way that I – (inaudible) – they adopt standards and targets and so on. In Turkey, there are some examinations already in place like environmental impact assessment and requirement under some certain conditions. But it’s there and we expect that those high standards should continue.
MR. MOORE: Deputy Minister Maniatis, Mr. Cömert is advocating a proactive stance for his membership because if you look at the potential and the very small amount of exploration that’s been done in the waters here in the Black Sea and the Mediterranean, Caspian Seas, there will be more – just the demand for energy insists that there will be much more active drilling.
What is your view in terms of government looking to be more proactive to assess whether or not there are gaps in environmental safety regulations to avoid any type of disaster, whether it is a pipeline explosion, whether it is another drilling rig mishap? This is a dangerous activity no matter how technical and how sophisticated and how capable the personnel of the company is.
MR. MANIATIS: As you know, Greece is at the same time a European country and a country of Mediterranean Sea and a country of Black Sea. We participate in Black Sea economic cooperation. So from these three different but I think a parallel point of view, I could say that we all, my country and I think all the countries, to see again our legislation.
I am sure we have already found out that our legislation has gaps and we need to fill in these gaps to make our legislation more clear, more transparent, more environmentally friendly. Second, I am not sure whether in European level and in each one country we have really good mechanisms, instruments, platforms, whatever in order to act after an accident. I am not sure at all.
MR. MOORE: Yeah.
MR. MANIATIS: For example, in European Union we have the monitoring and information center in order to monitor and collect information on all of these issues. But it’s just an instrument. We have also another authority which is the European Maritime Safety Agency, which is responsible for transportation accidents, tankers for example. So I think that this already installed authority could expand its significance in order to take care of such incidents – accidents in drilling in oil platforms. I also think that the industry has to see again its face on the – (inaudible)
The society, every citizen needs to be sure that the industry has put the safety on the top of its priority catalog. Since we are living on a planet where climate change is so rapid, we don’t know what will be our future in 10 years or in 20 years. So we need to be assured from the industry’s point of view that they have done whatever is possible in order to prevent from such other accidents. Finally, I really think that our region can be a good paradigm, a good example for the rest of the planet how we can cooperate in order to reinforce our national separate forces.
For example, the Mediterranean union is a platform where we can cooperate. Black Sea economic cooperation is another platform, European Union. We have the political, interregional platforms. What we need is the political will to collaborate and the will from the industry’s side that they are going to talk much, much issues in order that the citizen in every country all over the world to be sure that we will not live another tragedy like this one.
MR. MOORE: Very good statement. I’d like to come back to you momentarily on that, the geopolitical platforms and the overlap and the common denominators. But I think it’s time we turned to the audience for a couple of questions at least. Yes, please just identify yourself, please right here and then we’ll go back up. Is there a microphone? Is there? Oh, here comes one, yes, and to whom the question is addressed.
Q: Yeah, this is – (inaudible) – representing OSPRI, which is an oil industry production preparedness initiative in the region, in the Caspian Black Sea.
MR. MOORE: It’s private sector?
Q: Private sector, oil industry, 12 members of the oil industry, and while we’re talking about the unfortunate event in Mexican Gulf, I think we all can agree that talking about looking in the mirror. We know an accident is bad business. We know that. We do everything we can to prevent that. There are some technical issues. But working between industry and government is clearly mandated in many of the conventions which are affecting Black Sea and Mediterranean and we as an association have been trying for years to get that going.
We have been very successful working with the Black Sea commission, which is stationed here in Istanbul, in developing an understanding between industry and government and assist the government to develop response capability because we’re talking a major technical event which happened in Mexico.
But there is pollution going on every day because of lack of following existing legislation, first of all. We don’t need more legislation. We need to comply with the existing one first. And then when I look on the funding which goes onto these, it’s a $65,000 commitment from each government to this regional cooperation initiatives which are going on.
MR. MOORE: $65 million?
Q: $65,000, sorry, from each individual country in the Black Sea region. Maybe that represents the commitment but it doesn’t represent the talk and we have not been able in the black Sea region to have agreement from ballast conventions, which is a major issue. Garbage have been a success story for many of the local authorities to make money on. So it’s a lot of things taking place.
So what we need is definitely what I agree with you on Jay, a good dialogue between industry and the government to progress and build competence, learn lessons, convey and raise the whole standard. Legislation only works if you have competent enforcement, good enforcement. But where you don’t have businesslike officials in port making money on environmental legislation, that doesn’t work, which is happening in the region.
So what I’m asking for – and it’s unfortunate that two representatives from the Black Sea companies are not here. I’d like to ask them the question, what they intend to do in ensuring that first commitment to the conventions which are in place and then how to work with the industry and raise because we have countries in the region who doesn’t even have national response plan. We’re talking what the operator has to do in the region. They go out and drill for oil. They are bound by the industry standards to have an oil spill response plan. But they have no national plan to connect it to.
MR. MOORE: Okay, thank you very much, Mr. London. I think this underscores a very important point. There’s legislation on the books. There is a rapidly changing industry. Technology is growing. Demand is growing. Supply transport routes are proliferating. That’s one of the things that we sense with these problems come opportunities for a very business led association like the Atlantic Council and what we’re trying to do with this Black Sea Economic and Energy Forum.
So we don’t want to recreate the wheel. We don’t want to compete with others and do other people’s job but if we can be a catalyst, if we can find the drivers and in my years living and being in the business community in Romania, the real driver of reform in all of the new E.U. member states was clearly the acquis communautaire of joining, requiring, regardless of the politics of any country, you had to through a bilateral obligation to the European Union comply with all of the legislation.
Turkey has now complied already with of the 31 chapters of the acquis communautaire, I think 15 or so, about 12 to 15, some number greater than 10, less than 15. This I would see where the Hellenic Republic could have a real role. Do you see sort of cooperation between the fact that you are a member of the European Union and Turkey harmonizing its laws in this area of environmental safety?
MR. MANIATIS: Yes, we can play such a role and we are playing such a role because as you know, we’re very positive in Turkey’s positions, according to all European Union’s issues. For example, let me just say that we have taken an initiative for the Mediterranean in order to collaborate all the Mediterranean countries and the ministries of energy and the ministries of environment in order to formulate a basis, a common accepted basis on okay, what are we going to do with Mediterranean, Turkey, Cyprus, North Africa. We have to do something. We cannot leave it as it is now. At least have in mind that Mediterranean and Black Sea and Caspian Sea is not an open ocean. It’s not an open ocean.
So we need to answer, we need to reexamine our legislation. I don’t know whether European Union directives are enough. Commissioner Ettinger says that we need to update our European legislation. The second is let’s be honest. Always the market and the technological development is many, many steps before the government’s. This is the case. We know it.
Governments are following. So no government nowhere in the world will go at the same time in a parallel way with the market or the technology. So what we need is to bring these two different options in collaboration and at the same time to enforce the governmental forces through interregional cooperation.
MR. MOORE: Yeah, good. Jay, let me just turn to you, ask you for your response from a business perspective to the minister’s thoughts.
MR. MANIATIS: Let me just one more comment?
MR. MOORE: Sure.
MR. MANIATIS: All this is one side of the coin. The other side of the coin is renewable energy sources and energy efficiency, which must be our vision.
MR. MOORE: Jay?
MR. GLICK: Just to pick up on Shell’s point for just a moment, I think the North Sea maybe gives a good model that can be examined in the Black Sea and the Mediterranean because you have Holland, you have Norway, you have the U.K.
MR. MANIATIS: Developed countries.
MR. GLICK: And they all share the same oil problem essentially and they try to harmonize the requirements to drilling rigs. They tried to harmonize the procedures. I think it was a great job of involving industry expertise as well as governmental bodies in drafting the legislation that regulated that.
I think the enforcement was provided partly through government and partly through industry’s recognized obligation to comply and the environmental concerns that were raised and if you look at the countries involved, I don’t know if there’s a country in the world that’s more environmentally sensitive than Norway and Norway has had a fantastic record of drilling there.
The industry bodies, UKOOA is involved in the U.K. and so you had legislation that in many ways was able to keep up with the technology because the industry was providing the technology input to the legislation. So it was informed. It was streamlined. It as workable and I think in a lot of the world – and I think in the U.S. particularly offshore in the Gulf of Mexico – the legislation that’s in place is not streamlined. It’s not workable.
It’s a lip service-type relationship and I think the Deepwater Horizon illustrated some of the weaknesses in that. But I would maintain you cannot legislate a 100 percent security on accidents. You really need informed policy and informed procedures and great compliance.
MR. MOORE: Yes, next question?
Q: (Inaudible) – from Switzerland. During your discussion you mentioned that we need more practical solutions from the industry. But we all know that prevention takes time and money and on the other hand, you have the governments that try to incite the private sector to think of prevention. You mentioned the aspect of regulation. My question is in order that industry could take this reflection, do governments need to put that legislation in place so it will be a little bit mandatory for the governments to make pressure on companies in order to have this reflection?
That’s one of my questions and I would like to know for the private sector what changes are in your agenda after the BP event. What was concretely the position of the private energy sector after this tragic event? Did your agenda change? Did your appropriation change? Thank you.
MR. MOORE: Was there an assessment of your risk management, crisis management, procedures of your respective companies or associations?
MR. GLICK: I mean, from our side there are a number of safety issues that are monitored every day. But I think to answer the question about the industry’s response, if you look at the decisions that have been taken by ExxonMobil, by other majors in the Gulf of Mexico to proactively have spill control devices not only designed but purchased and in place in the Gulf of Mexico, to come together to bring a number of companies together who operate in the Gulf, to bring that about I think is one reflection of industry’s move to recognize some of the weaknesses that were in place prior to the Macondo accident.
But I’d go back to the real examination from Macondo that’s underway and that I think the industry will spend a lot of time on really has to do with industry best practice because if you look at the chain of events that led to the disaster, it was an epic failure of judgment. Experts were not listened to. Equipment was not maintained by competent bodies. You can just go down the list of events that led up to it, any one of which could have been overcome.
But the compilation of which were inextricably leading to an accident and that’s really what we face. But I think there has been a move by the industry to react to that in the Gulf and I think it will go on throughout the world. Brazil is clearly reexamining their deepwater programs.
MR. MOORE: Any other questions from anyone else?
Q: Thank you. (Inaudible.) On this issue, actually, has there been any element showing that Turkey is looking to reexamine its best practice? We have deepwater wells being drilled as we speak in the Black Sea. Do we have any indication that the governmental level, maybe at your level Mr. Cömert, that the industry is ready to sit down with the public authorities and discuss best practice?
MR. CÖMERT: Thank you. I would leave that of course to individual discussions with the developers, the companies and the government for this specific case. But overall, yes, the dialogue between the industry association, the industry bodies and the government is there. The communication channels are fully open and all kind of matters, including this one, the communication channel is open and the more exploration activities we desire to have, the more discussion, the wider discussion will become I’m sure. But then again, yes, the communication line is open. Both parties are willing to discuss and continue discussion and a number of companies; we have 42 member companies now.
MR. MOORE: Forty-two?
MR. CÖMERT: Forty-two –
MR. MOORE: They’re all platform operators, deep?
MR. CÖMERT: No, we have companies operating in E&P and industry and gas industry, local and international players. We have some members – we have very few members but that is an industry topic that is to be discussed and any kind of legislative and regulatory points we are under continuous discussion with the government, with all stakeholders.
In fact, when we say government, you have to appreciate that this is a multistakeholder issue to discuss any kind of things, the regulatory industry associations, the parliament, bodies over there and all the others and environment has been one topic I remember I think last year or two years ago that needed a discussion with the development parties and we have that.
MR. MOORE: We’ve got time for one more question, one final question. If not, let me just say then I see real potential here for cooperation from the industry associations, from individual leading companies and from governments here in the Mediterranean-Black Sea energy sphere, particularly with the new privatization.
The new petroleum law going forward is kind of the synergies, the drivers of E.U. accession, to have input from other actors in this sphere to say does this privatization law meet the acquis communautaire, the E.U. directives for petroleum law to be able to create drivers where you have the right industry participation with knowledgeable government officials of other countries in the region.
That’s the type of pragmatic working groups that we would like to create from this Black Sea Economic and Energy Forum going forward. So I hope all of you will exchange business cards, carry on discussions online as we go forward and look forward to seeing you all next year. Thank you all for attending this panel. (Applause.)