Advancing the robustness of risk regulation for offshore drilling operations in China

Abstract

Robust regulation has become a pursuit in risk governance of offshore drilling operations over the recent decade. However, the idea of robust risk regulation has not been fully developed in China. This paper aims to explore what affects the robustness of risk regulation and how can a robust regulatory regime for offshore drilling operations be achieved in China. It begins with an identification of risks and values of the offshore petroleum industry, highlighting that robust regulation is the primary means to manage such risks in offshore drilling operations. It then discusses dimensions of regulatory robustness and assesses and compares regulatory regimes for this high-risk offshore petroleum industry in the United Kingdom, Norway, the United States and China. In specific, the Chinese paths to govern the risks of offshore operations are summarized. A key theoretical debate on regulating offshore drilling operations is which regulatory modes can better facilitate the robustness of risk regulation. The command-and-control regulation and self-regulation represent two primary regulatory modes of offshore risk regulation. The former is strongly dependent upon public enforcement while the latter emphasizes internal continuous improvement of the offshore petroleum industry. To develop robust offshore regulation in China, this paper suggests that a certain combination of the two modes is necessary to deliver optimal regulatory outcomes.