Cabinet Regulation No. 412 regarding protection of the environment during exploration and production of hydrocarbons in the sea

1. These Regulations prescribe environmental protection requirements during exploration and production of hydrocarbons in the sea, in order to eliminate or reduce environmental pollution, which may arise because of the exploration and production of hydrocarbons.

2. A person performing exploration or production of hydrocarbons has the duty to use the best available techniques, taking into account the principles of transparency, complexity, scientific justification, planning, precautions, the environment and the national economy. II. Environmental Impact Assessment and Monitoring

3. Before the approval of exploration and production of hydrocarbons in the Cabinet, the Ministry of Environmental Protection and Regional Development shall submit the information regarding the state of the environment in these blocks to the Cabinet.

4. A manager of exploration and production of hydrocarbons (hereinafter – operator) shall, prior to commencing the exploration and production of hydrocarbons in the earliest possible stage of technical planning, design or taking of a decision regarding the intended operation, propose the performance of an environmental impact assessment in accordance with the requirements specified in the 1992 Helsinki Convention on the Protection of the Marine Environment of the Baltic Sea Area (hereinafter – the Helsinki Convention) and in the 25 February 1991, ESPO Convention On Environmental Impact Assessment in a Transboundary Context.

5. An operator shall ensure monitoring at the place of exploration and production of hydrocarbons, taking into account the opinion of the previously completed environmental impact assessment. A monitoring programme shall be approved by the Marine Environment Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) Administration of the Ministry of Environmental Protection and Regional Development (hereinafter - Marine Environment Administration) prior to the receipt of authorisation for exploration and production of hydrocarbons.

6. Monitoring surveys shall be carried out in accordance with the requirements of ICES (International Council for the Exploration of the Sea) and HELCOM (Helsinki Commission), using standardised methods.

7. The monitoring data, obtained with the funds of legal or natural persons, is the property of the relevant legal or natural persons and shall be available to the State administrative bodies free of charge. An operator shall submit the monitoring reports and copies of data to the Marine Environment Administration in accordance with the approved monitoring programme.

8. State monitoring, in accordance with the sea monitoring programme, shall be carried out notwithstanding monitoring being performed by the operator. III. Discharge during Exploration and Production of Hydrocarbons

9. It is prohibited to discharge diesel oil drilling mud and waste thereof into the Baltic sea, but it shall be purified and reused on site or shall be conveyed to the shore for purification and utilisation, co-ordinating these operations with Marine Environment Administration.

10. The use of drilling mud produced from a diesel oil base shall only be permitted in exceptional cases, if it is necessary due to geological, technical or safety reasons and it has previously been co-ordinated with the Marine Environment Administration, ensuring compliance with the requirements referred to in Paragraph 9 of these Regulations.

11. It is prohibited to discharge water based drilling mud and waste thereof into the Baltic Sea, prior to the toxicity thereof being controlled in accordance with the Annex to these Regulations in a laboratory accredited for this purpose. Toxicity control shall be ensured by the operator who shall inform the Marine Environment Administration regarding the results.

12. If the results of the toxicity control referred to in Paragraph 11 of these Regulations verify the harmlessness of the drilling mud and drilling waste to the environment (none of the substances referred to in Paragraph 1.2, Annex I of Helsinki Convention have been added to the mud as components thereof and the concentration of mercury (Hg) or cadmium (Cd) does not exceed 1 mg/kg in the mud), after co-ordination with the Marine Environment Administration, the utilisation of the water based drilling mud and discharge of drilling waste into the sea shall be permitted.

13. It is prohibited to discharge chemical substances included in the list of harmful substances referred to in Paragraph 1.2, Annex I of the Helsinki Convention and materials containing such substances.

14. It is prohibited to discharge impure economic waste water and waste into the sea.

15. It is prohibited to discharge production waste water and replacement water into the sea, if the oil content therein, determined with analyses and sampling methods recognised by HELCOM (Helsinki Commission), exceeds 15 mg/l. Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) 2

16. If, using the best available methods, it is not possible to fit within the limit referred to in Paragraph 15 of these Regulations (up to 15 mg/l), the Marine Environment Administration has the right to increase the discharge limit up to 40 mg/l and to request the execution of relevant additional measures in order to eliminate environmental pollution. The Marine Environment Administration shall review discharge limits at regular intervals taking into account developments in waste water production and purification technology.

17. The management plan for all types of waste water, waste and by-products (hereinafter – waste management plan) shall be approved by the Marine Environment Administration before obtaining an authorisation for exploration and production of hydrocarbons.

18. The authorisation for the use of water and for the release of polluting substances into the atmosphere in accordance with regulatory enactments and recommendations of HELCOM (Helsinki Commission), as well as taking into account the environmental impact assessment, shall be issued by the Marine Environment Administration.

19. Injection of gas and water into the oil-bearing bed for the promotion of production, as well as the re-injection of produced liquids into the oil-bearing bed in the course of proceeding with the production of hydrocarbons shall not be considered as pollution of subterranean depths. The operator shall co-ordinate the referred to operations with the Marine Environment Administration.

20. This Chapter does not apply to cases when human life or objects related to the production of hydrocarbons are under the threat of complete destruction and discharge is the only possibility of eliminating these threats and if there is the certainty, that the injury caused by the discharge will be less than that injury if the discharge has not happened. Such discharge shall be done so that possible injury to human life and the marine environment shall be reduced to a minimum.

21. Discharge performed in accordance with Paragraph 20 of these Regulations shall be notified to the Marine Environment Administration within 24 hours, beginning with the commencement of the discharge, indicating the content of the substances discharged, possible amount, place and time. IV. Elimination of the Consequences of Disasters and the Operational Plan in the Event of Unexpected Pollution

22. In accordance with Paragraph 472 of Cabinet Regulation No. 168 of 16 August 1994, Latvian Maritime Regulations (Maritime Code), an operator shall draw up an operational plan in the case of unexpected pollution for every object involved in the exploration or production of hydrocarbons (hereinafter – operational plan), which shall be approved by the Marine Environment Administration before obtaining the permit for exploration or production of hydrocarbons.

23. The location (storage) of equipment for the elimination of consequences of disasters shall be indicated precisely in the operational plan. Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) 3

24. Equipment for the elimination of consequences of disasters shall be stored and maintained so that the pollution elimination measures may be commenced immediately. An operator shall ensure the immediate commencement of elimination measures of consequences of disasters, but that the commencement of additional measures provided in the operational plan – shall not be later than eight hours after the disaster.

25. Utilisation of dispersants during elimination measures of oil pollution shall be limited as much as possible and each case of utilisation thereof shall be previously co-ordinated with the Marine Environment Administration. It is prohibited to use oil sinking substances for the elimination of pollution.

26. Equipment for the elimination of consequences of disasters shall meet the following conditions: 26.1. the quantity of equipment shall comply in order to eliminate the possible consequences, if the leakage of oil has occurred from drillings, platforms or pipelines of exploration or production of hydrocarbons, taking into account the geological location of the drilling, evaporation and emulsification of oil; 26.2. oil collection systems, booms and transport materials shall be designed so they can be used and they are effective in the current conditions and the height of waves that prevail in the relevant region (a height of waves up to 2 meters and a current of up to 1 knot), and the equipment shall be capable of being operated in the prevailing temperature in the relevant region; 26.3. the capability of the equipment to be used in the conditions of ice for the elimination of consequences of disasters shall have been examined in conditions of low temperature, ice and under the ice; 26.4. the equipment intended for the elimination of pollution of harmful substances other than oil, used in a substantial amount, shall comply with the following conditions: 26.4.1. the quantity and type of equipment shall be such, so that the user may determine and inform about the amount of pollution and location thereof, avoid or reduce the release of substances and eliminate the pollution; and 26.4.2. if the pollution is floating and insoluble in water, the user may restrict, collect and transport it in the circumstances referred to in Sub-paragraph 26.2 of these Regulations.

27. The duties of an operator in the case of unexpected environmental pollution are the following: 27.1. immediately identify the source of the pollution; 27.2. carry out the necessary operations in order to liquidate pollution in accordance with the operational plan; 27.3. to provide the following information to the Marine Environment administration: 27.3.1. the type of pollution and amount; 27.3.2. the time and place of the determination of the pollution; 27.3.3. the source of the pollution; 27.3.4. the operations begun for the elimination of pollution and the causes thereof; and 27.3.5. the wind and sea conditions at the place of pollution. Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) 4 V. Control

28. Officials of the Marine Environment Administration shall carry out the State inspection of the observation of environmental protection requirements in exploration and production of hydrocarbons in the Economic Area of the Republic of Latvia and in the territorial waters pursuant to the following conditions: 28.1. The Marine Environmental Administration shall submit to the Ministry of Economics the control schedule for the following year by 20 October of each year, providing that the inspections are executed at least once in every half year; 28.2. Officials of the Marine Environment Administration have the right (with prior co-ordination with an operator) in accordance with the inspection schedule and in cases, when a cause for suspicion of environmental pollution from an object related to the exploration or production of hydrocarbons arises, to inspect observation of the environmental protection regulations and the conditions of authorisation, the implementation of the environmental protection and waste management plan, as well as the readiness for elimination of pollution and compliance of the operational plan with an actual situation, to be provided with accommodation free of charge at the object related to exploration or production of hydrocarbons, to receive information necessary for the performance of functions thereof and copies of documents; and 28.3. The Marine Environment Administration shall inform the Ministry of Economics and the operator regarding the results of the inspections.

29. Operators shall ensure: 29.1. transport of the Marine Environment Administration official to the object related to exploration and production of hydrocarbons, as well as the provide the relevant working conditions for performance of the inspection in the cases referred to in Sub-paragraph 28.2 of these Regulations; 29.2. the provision of all necessary information to the Marine Environment Administration; 29.3. automated control and registration of emissions, as well as the provision of regular reports to the Marine Environment Administration regarding substances discharged into the environment in accordance with the conditions referred to in the authorisations; and 29.4. the permanent inspection of the environment protection measures plan, the waste management plan and the operational plan once in every half year. Prime Minister A. Bērziņš Minister for Environmental Protection and Regional Development V. Makarovs Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) 5 Annex Cabinet Regulation No. 412 28 November 2000 The Determination of Toxicity of Drilling Mud and Conditions for Utilisation

1. The toxicity of water based drilling mud shall be determined by testing – a test of how the water-soluble fraction, obtained by stirring the dregs for 20 hours in a closed system, then allowed to settle (forming a sediment) for two hours and taking a sample from the middle of the mass obtained, impacts: 1.1. on the photosynthesis of seaweed (Skeletonema costatum); 1.2. on the growth of sea mussel worms (Mytilus edulis); 1.3. on the reproduction of marine crustaceans (Acartia tonsa); and 1.4. on sea fish worms(Clupea harengus).

2. EC5096h (a concentration, which causes functional changes in 50 % of test organisms within 96 hours) in the tests referred to in Paragraph 1 of these Regulations shall be at least 10 000 mg/kg.

3. The following additional tests may be carried out: 3.1. a test of biological degradation (in accordance with guidelines of Organisation for Economic Co-operation and Development (OECD)); and 3.2. a bio-accumulation test (for determination of lipophilic substances by the method of chromatography).

4. The content of petroleum products in emissions shall be determined by using the standardised method of infrared rays in three absorption regions (approximately 2925, 2960 and 3025 cm-1). Minister for Environmental Protection and Regional Development V. Makarovs Translation © 2005 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre) 6