Russia Requires Firms to Develop Financial/Insurance Contingency Plans for Oil Spills

President Vladimir Putin on Monday signed legislation requiring companies involved in oil production or handling other hydrocarbons to have adequate resources for a contingency plan in the case of a spill.

The law makes it mandatory for companies to have sufficient financial reserves to prevent potential spills or clean them up if they occur. The financial reserves can take various forms, including an insurance contract or a letter of guarantee to pay the damage from a given accident.

The law also requires companies handling hydrocarbons to draw up plans to prevent and clean up spills by Jan. 1, 2024.

In late May, a fuel tank at a power station in the Arctic city of Norilsk leaked 21,000 tonnes of diesel into rivers and subsoil, an incident that the environmental campaign Greenpeace compared to the 1989 Exxon Valdez oil spill.

The Kremlin has said the new legislation is aimed at preventing similar spills.

The mining company Norilsk Nickel has pledged to “eliminate the consequences of the accident at its own expense,” and is challenging a request for more than $2 billion from Russia’s environmental watchdog, which has said the damage to the Arctic could be unprecedented.

(Reporting by Gabrielle Tétrault-Farber; editing by Kevin Liffey)

Photograph: Russian President Vladimir Putin, participates in a meeting with cultural figures marking the Russian Language Day via teleconference at the Novo-Ogaryovo residence outside Moscow on Saturday, June 6, 2020. Photo credit: Alexei Nikolsky, Sputnik, Kremlin Pool Photo via AP.

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Topics Energy Oil Gas Russia