INTERNATIONAL PETROLEUM LAW AND TRANSACTIONS | Owen L. Anderson, Jacqueline L. Weaver, John S. Dzienkowski, John S. Lowe, Keith B. Hall, Frédéric Gilles Sourgens
INTERNATIONAL PETROLEUM LAW AND TRANSACTIONS
first Edition

INTERNATIONAL PETROLEUM LAW AND TRANSACTIONS

by Owen L. Anderson, Jacqueline L. Weaver, John S. Dzienkowski, John S. Lowe, Keith B. Hall, Frédéric Gilles Sourgens

ISBN: 978-1-943497-39-3

International Petroleum Law and Transactions provides comprehensive coverage of international petroleum law and transactions from both a legal and a commercial perspective. It serves as a valuable reference for lawyers, negotiators, commercial investors, regulatory agencies, and the many international governmental and nongovernmental organizations concerned with oil and gas development and as a teachable text for students in law, business, and other professional schools.

The first three chapters provide essential background about the international petroleum industry; address the meaning of sovereignty respecting petroleum resources, particularly boundary issues; and consider the extraterritorial laws that constrain a petroleum investor's actions within a host country, with a special focus on transnational antibribery law.

The book then turns to the relationship between the foreign investor and the host government (HG) - in particular, a HG's petroleum codes, petroleum investment contracts, fiscal terms, decommissioning regulations, and environmental regulations. A chapter is devoted to dispute resolution, including political risk, arbitration, and guidance in drafting dispute resolution clauses. Contracts that a consortium of petroleum investors make with each other are covered next, with a special focus on joint operating and farmout agreements. This section also addresses petroleum services contracts, with a special emphasis on drilling contracts and oil, natural gas, and liquefied natural gas (LNG) marketing contracts. The text proceeds through the chain of contracts that link oil and gas exploration, development, production, and marketing-contracts nested in a rich mix of extraterritorial and international law, the domestic law of the host country, and international codes of conduct. The final chapter concludes with a consideration of the role of petroleum in the future energy mix.

Individual chapters are also available: Chapter 1, Chapter 2, Chapter 3, Chapter 4, Chapter 5, Chapter 6, Chapter 7, Chapter 8, Chapter 9, Chapter 10, Chapter 11, Chapter 12, Chapter 13, Chapter 14

Read more > Hide

OWEN L. ANDERSON is a Distinguished Oil & Gas Scholar at the University of Texas School of Law, Co-Academic Director of the Kay Bailey Hutchison Center for Energy Law & Business at the University of Texas, and the Eugene Kuntz Chair in Oil, Gas, & Natural Resources Emeritus and George Lynn Cross Research Professor Emeritus at the University of Oklahoma College of Law. He is an Honorary Senior Fellow at the University of Melbourne Faculty of Law; a member of the Honorary Lecturer and Principal Researcher of the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee; and a Visiting Professor at the University of Sydney. He has authored over 100 articles, several books, and treatises on water law and domestic and global petroleum law. He is Editor-in-Chief of the Texas Title Standards and a lifetime Honorary Trustee of the Rocky Mountain Mineral Law Foundation and member and former officer of the Association of International Petroleum Negotiators (AIPN), form and style editor of AIPN model contracts, and founding member of the editorial board of the AIPN-Oxford University Journal of World Energy Law and Business. He a life member of the National Conference of Commissioners on Uniform State Laws, a member of the American Law Institute, and a trustee of the Energy and Mineral Law Foundation. He is a member of the Texas, Oklahoma, and North Dakota bars and an arbitrator and consultant on oil and gas law and policy.

JACQUELINE L. WEAVER is Professor Emerita at the University of Houston Law Center, where she held the A.A. White Professor of Law chair until her retirement in 2017. Her teaching and research interests cover oil and gas law, energy law and policy, international petroleum, and environmental and natural resources law. She is the co-author of Smith & Weaver, Texas Law of Oil and Gas (a three-volume treatise); Energy, Economics and the Environment (a casebook on U.S. energy, including FERC regulation of pipelines); and several books on international petroleum transactions and Texas oil and gas law. She has won many teaching awards. She has lectured on topics in international oil and gas in Africa (Uganda, Ghana, Namibia, and Angola), Kazakhstan and India (as a Fulbright scholar), Lisbon, and Bangkok. She has written articles on offshore safety after the Macondo disaster in the Gulf of Mexico, energy markets, sustainable development in the international petroleum industry, comparative unitization laws, energy policy, and traditional oil and gas law topics. Professor Weaver holds a B.A. in Economics from Harvard University and a J.D. degree from the University of Houston.

JOHN S. DZIENKOWSKI is the John F. Sutton, Jr. Chair in Lawyering and the Legal Process and a Professor of Law at the University of Texas School of Law in Austin, Texas. He began his teaching career at Tulane Law School in New Orleans and joined the Texas faculty in 1988. He has been a visiting professor at a number of law schools and has lectured in numerous countries. John teaches and writes in the areas of professional responsibility of lawyers, real property, international energy transactions, and oil and gas taxation. He also was the recipient of the Texas Exes Faculty Teaching Award at the Law School in 2005. He is a four-term member of the drafting committee of the Multistate Professional Responsibility Examination. He has authored and edited numerous books and articles on a variety of legal ethics and natural resource topics. He is the long-time co-chair of the biannual Parker Fielder Oil and Gas Taxation Conference, co-sponsored by the University of Texas School of Law and the Internal Revenue Service.

JOHN S. LOWE holds the George W. Hutchison Chair in Energy Law and is a Professor of Law at Southern Methodist University. Professor Lowe has taught courses on oil and gas law, oil and gas contracts, and international petroleum transactions at SMU’s Dedman School of Law since 1987. He also served as Senior Associate Dean for Academic Affairs from 2009 to 2014. He worked as an Administrative officer for the Malawi Government for two and a half years in a program funded by USAID and the Ford Foundation after Harvard law school, then practiced law privately for five years. He was a member of the faculty at the University of Toledo from 1975 to 1978. He then joined the faculty of the University of Tulsa, where he served as professor and associate director of the National Energy Law and Policy Institute. Professor Lowe has been a visiting professor at the University of Texas, a Distinguished Visiting Professor of Natural Resources Law at the University of Denver, the Visiting Judge Leon Karelitz Chair of Oil and Gas Law at the University of New Mexico, and the Visiting Borden Ladner Gervais LLP Chair of Energy Law and Policy at the University of Alberta on a Fulbright grant. He presently holds appointments as an Honorary Lecturer and Principal Researcher of the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee, as a Senior Fellow of the Faculty of Law at the University of Melbourne, and as a Visiting Professor at the University of Sydney. He has also been an International Legal Advisor for petroleum issues in the Commercial Law Development Program of the U.S. Department of Commerce, and has lectured at universities and advised governments around the world. Lowe is a former Chair of the Section of Environment, Energy, and Resources Law of the American Bar Association and a former President of the Rocky Mountain Mineral Law Foundation. He is a member of the commercial arbitration panels of the American Arbitration Association, the International Centre for Dispute Resolution, and the CPR Institute of Dispute Resolution, as well as an editor or author of many articles and books, including Cases & Materials on Oil & Gas Law, Oil & Gas in a Nutshell, Oil & Gas Law & Taxation, and Kuntz Law of Oil & Gas.

KEITH B. HALL is the Campanile Charities Professor of Energy Law at Louisiana State University (LSU), where he serves as Director of the Mineral Law Institute and Director of the John P. Laborde Energy Law Center. He teaches Mineral Rights, International Petroleum Transactions, Civil Law Property, and Energy Law & Regulation. He has also taught Advanced Mineral Law and an Energy Law Seminar that focuses on environmental issues relating to oil and gas development. His publications have focused on oil and gas leases, pooling and unitization, hydraulic fracturing, and induced seismicity that is associated with oil and gas activities. He is co-author of a textbook on oil and gas law that is used in U.S. law schools and also is co-author of a book published by the American Bar Association on the legal issues relating to hydraulic fracturing. He is a frequent speaker at national and international oil and gas conferences. In prior years, Professor Hall has taught International Petroleum Transactions as a Visiting Professor at Baku State University in Azerbaijan, International Energy Transactions as a Visiting Professor at the University of Pittsburgh Law School, and Introduction to Mineral Law as an adjunct professor at Loyola Law School in New Orleans. Before joining the LSU Law School faculty, he practiced law for 16 years, with a focus on oil and gas litigation and transactions. Professor Hall is the Editor-in-Chief of the Institute for Energy Law’s Oil & Gas E-Report. He serves on the Rocky Mountain Mineral Law Foundation’s Board of Directors, the Association of International Petroleum Negotiators’ Educational Advisory Board, and the Executive Committee of the Energy & Mineral Law Foundation. He is a former Chair of the Oil & Gas Committee of the American Bar Association’s Section of Environment, Energy and Resources. He also is a registered professional engineer (inactive).

FRÉDÉRIC G. SOURGENS is the Senator Robert J. Dole Distinguished Professor of Law and Director of the Oil and Gas Law Center at Washburn University School of Law. Freddy serves as Editor-in-Chief for Oxford University Press’s InvestmentClaims.com reporter of investor-state arbitral decisions. He has authored or edited over 80 publications. His works have been cited in international legal proceedings and affirmatively relied upon by courts and arbitral tribunals including by the Constitutional Court of Portugal. His most recent books are Evidence in International Investment Arbitration (with Kabir Duggal and Ian Laird) (Oxford University Press: 2018) and Decarbonisation and the Energy Industry: Law, Policy and Regulation in Low-Carbon Energy Markets (with Tade Oyewunmi, Penelope Crossley, and Kim Talus) (Hart Publishing: 2020). He is currently co-authoring The Transnational Law of Renewable Energy (with Teddy Baldwin and Catherine Banet) (Oxford University Press, under contract, forthcoming 2022). Freddy has served as counsel in numerous precedent-setting international legal disputes.


HARRY W. SULLIVAN, JR., Contributing Author, is an International Energy Attorney based in Dallas, Texas, where he is an Executive Professor at Texas A&M School of Law and an Adjunct Professor at SMU’s Dedman School of Law. He also works as the Assistant General Counsel for Kosmos Energy in their West Africa exploration activities. His previous experience includes 14 years as Senior Counsel-International in the International E&P Legal Group of ConocoPhillips, Of Counsel with Thompson & Knight LLP, 15 years as Chief Counsel-International and Senior Counsel for Atlantic Richfield Company and five years as Senior Counsel for Sun Oil Company. Mr. Sullivan has a J.D. degree from Louisiana State University School of Law and an LL.M. degree from Southern Methodist University’s Dedman School of Law. He is licensed to practice law in the states of Louisiana and Texas and before the Supreme Court of the United States, and he is Board Certified in Oil, Gas and Mineral Law in Texas. He is also admitted as a Solicitor in England and Wales. His practice and experience focuses on the upstream and midstream oil and gas industry, both in the U.S. and internationally, in more than 25 countries. 

© Copyright 2020 by the Rocky Mountain Mineral Law Foundation.  All rights reserved.

Author Affiliations and Bios
Conditions for Use and Copyright
Dedication
Preface and Acknowledgments
Acronyms, Initialisms, and Standardization
Chapter Bibliographies
Index
Chapter One OVERVIEW OF THE INTERNATIONAL PETROLEUM INDUSTRY
1.1 - Introduction and Overview
1.1.1 - Setting the Scene
1.1.2 - Overview of This Book
1.2 - The Key Players
1.2.1 - Snapshot History of the Key Players
1.2.2 - Host Governments
1.2.3 - International Oil Companies: Supermajors, Majors, and Independents
1.2.4 - Oilfield Services Companies
1.2.5 - National Oil Companies
1.2.6 - Financiers: Equity Funding, Commercial Banks, the World Bank, and Credit Agencies
1.2.7 - Civil Society: Nongovernmental Organizations
1.2.8 - International Organizations: The United Nations and Others
1.3 - Rocks, Reservoirs, Risks, and Reserves
1.3.1 - The Rocks: Geology of Conventional Reservoirs Versus Unconventional Shale
1.3.2 - Reservoir Management: Maximizing Recovery Rates
1.3.2.1 - Conventional Reservoir Management
1.3.2.2 - Unconventional Oil and Gas Development
1.3.2.3 - Laws Related to Good Reservoir Management
1.3.3 - Decision Analysis Under Uncertainty: Risk and Probabilities
1.3.4 - Reserves Measurement and Management: SEC and SPE Rules
1.4 - Summary and Preview of the Future of the Petroleum Industry
Chapter Two SOVEREIGNTY AND HOST GOVERNMENT CONTROL OF PETROLEUM AND MINERALS
2.1 - Introduction
2.2 - Territorial Sovereignty
2.2.1 - Acquiring Territorial Sovereignty
2.2.2 - Land Boundaries
2.2.3 - Maritime Boundaries
2.2.3.1 - UNCLOS Ratifications
2.2.3.2 - Baselines and Territorial Sea
2.2.3.3 - Exclusive Economic Zone
2.2.3.4 - Continental Shelf
2.2.3.5 - Islands, Rocks, and Low-Tide Elevations
2.2.3.6 - Deep Seabed Lying Beyond National Jurisdiction
2.2.3.7 - Overlapping Claims
2.2.4 - Antarctica
2.2.5 - The Arctic
2.3 - Transboundary Reservoirs
2.3.1 - The Rule of Capture
2.3.2 - Cross-Border Unitization
2.3.3 - Joint Development Zones
Chapter Three DOMESTIC EXTRATERRITORIAL LAW
3.1 - Introduction
3.2 - The Presumption Against Extraterritoriality
3.3 - Extraterritorial Anti-Bribery Laws
3.3.1 - U.S. Foreign Corrupt Practices Act of 1977
3.3.2 - Extraterritorial Anti-Bribery Conventions and the UK Bribery Act
3.3.3 - The Effects of Bribery and Corruption
3.4 - Other Extraterritorial Laws
3.4.1 - Income Tax Law
3.4.2 - Embargoes, Sanctions, and Blocking Laws
3.4.3 - Antitrust Law
3.4.4 - Securities Law
3.4.5 - Patent Law
Chapter Four PETROLEUM LEGAL REGIMES
4.1 - Introduction
4.2 - Legal Systems
4.2.1 - Civil Law
4.2.2 - Common Law
4.2.3 - Mixed, Socialist, and Sharia or Shari’ah Systems
4.3 - Host Government (HG) Constitutions
4.4 - HG Petroleum Codes, Related Codes, Regulations, and Treaties
Chapter Five HOST GOVERNMENT FISCAL SYSTEMS
5.1 - Introduction
5.2 - Host Government (HG) Goals vs. International Oil Company (IOC) Goals
5.3 - The Traditional Concession Era
5.3.1 - Foreign Direct Investment Through Concessions
5.3.2 - From Concession to Participation
5.3.3 - The Roles of the United Nations, Organisation for Economic Co-operation and Development, and International Energy Agency
5.3.4 - The Rise of National Oil Companies (NOCs)
5.4 - HG Take Through Contractual Fiscal Terms and Taxes
5.4.1 - Introduction
5.4.2 - Bonuses
5.4.3 - Periodic Rents
5.4.4 - Royalty
5.4.5 - Production (Profit) Sharing
5.4.6 - Progressive Fiscal Contract Terms
5.4.7 - Corporate Income and Miscellaneous Taxes
5.4.8 - Special Petroleum Taxes
5.5 - Modern Types of HG Contract Fiscal Models
5.5.1 - Concessions
5.5.2 - Production Sharing Contracts
5.5.3 - The Gross-Split Contract
5.5.4 - Service Contracts
5.5.5 - Risk Service Contracts
5.5.6 - Joint Venture (Participation) Agreements
5.6 - Other Fiscal Considerations
5.6.1 - Crypto Taxes
5.6.2 - Valuation of Crude Oil Provisions
5.6.3 - Special Treatment of Natural Gas
5.6.4 - Ring-Fencing
5.6.5 - NOC or Local Participation
5.6.6 - Mandatory Unitization
5.7 - IOC Evaluation of Investment Opportunities and Bidding
5.8 - Awarding Access to Develop Petroleum Reserves
5.8.1 - Individual Negotiation of HG Contracts
5.8.2 - Systems Based on a Bidding Process
5.8.2.1 - Competitive Bidding System: Brazil
5.8.2.2 - Discretionary Bidding System: United Kingdom
5.9 - Financing Oil and Gas Ventures
5.9.1 - Traditional IOC Self-Financing
5.9.2 - Financing Through Private and Public Debt
5.9.3 - Equity Financing: Traditional and Venture Capital
5.9.3.1 - Traditional Equity Financing
5.9.3.2 - Financing Through Transfers of Interests in the Venture
5.9.3.3 - Structured Financing Through Special Vehicles
5.9.3.4 - The Special Role of Venture Capital
Chapter Six HOST GOVERNMENT CONTRACTS - NON-FISCAL PROVISIONS
6.1 - Introduction
6.2 - Host Government (HG) Contract Provisions
6.2.1 - Introduction
6.2.2 - Recitals and Definitions
6.2.3 - Contract Nature, Purpose, Scope, Area, and Term
6.2.4 - International Oil Company (IOC) Operational Obligations
6.2.5 - Expatriate Personnel, Import of Services and Equipment, Local Content, and Local Currency Exchange
6.2.6 - IOC Liability for Accidents and Health, Safety, and Environment Harm
6.2.7 - IOC Default of the HG Contract
6.2.8 - Hardship
6.2.9 - Stabilization and Adaptation
6.2.10 - Transfer
6.2.11 - Governing Law and Language
6.2.12 - Other Provisions
6.2.12.1 - Surface Occupants
6.2.12.2 - Insurance Requirements and Indemnification Clauses
6.2.12.3 - Confidentiality
6.2.12.4 - Anti-Corruption
6.2.12.5 - Social Projects
6.2.12.6 - Furnishing Other Agreements to HG
6.3 - Ethical Considerations When Negotiating a HG Contract
6.3.1 - The Question of Attorney Licensure
6.3.2 - Choice of Professional Responsibility Rules
6.3.3 - Issues Confronting the Lawyer in an International Transaction
6.3.4 - Conventions in Negotiation
6.4 - Conclusion
Chapter Seven OIL SPILLS, OFFSHORE SAFETY SYSTEMS, AND DECOMMISSIONING
7.1 - Introduction
7.2 - Oil Tanker Spills
7.2.1 - Introduction and Overview
7.2.2 - International Conventions on Civil Liability and Compensation
7.2.2.1 - Overview of the Conventions
7.2.2.2 - Litigation Abounds: Case Studies
7.2.3 - The U.S. Oil Spill Regime: Oil Pollution Act of 1990
7.3 - Offshore Facilities: Safety and Environmental Management Systems
7.3.1 - The 2010 Deepwater Horizon (Macondo) Disaster and Its Aftermath
7.3.1.1 - Changes in Offshore Technology and Standards
7.3.1.2 - Moving Toward a Safety Case Regime
7.3.1.3 - Enforcing Offshore Safety Regulation
7.3.1.4 - Macondo Litigation Abounds
7.4 - Decommissioning
7.4.1 - Introduction and Overview
7.4.1.1 - Onshore Fields: Past and Present
7.4.1.2 - Recurring Issues: Onshore and Offshore
7.4.2 - Scope of Offshore Decommissioning
7.4.2.1 - Offshore Drilling and Production Technology Today
7.4.2.2 - The 1995 Brent Spar Episode
7.4.3 - The International Legal Framework on Decommissioning
7.4.3.1 - The 1958 Geneva Convention and the 1982 UN Convention on the Law of the Sea (UNCLOS)
7.4.3.2 - The International Maritime Organization Guidelines and Standards
7.4.3.3 - The London Dumping Convention of 1972 and Its 1996 Protocol
7.4.4 - Regional Conventions, Including OSPAR Decision 98/3
7.4.5 - National Laws on Decommissioning
7.4.6 - Contract Provisions on Decommissioning
7.4.6.1 - In Host Government Contracts
7.4.6.2 - In Joint Operating Agreements
7.4.7 - Alternatives to Decommissioning
7.4.7.1 - From Rigs to Reefs
7.4.7.2 - CO2 Sequestration
Chapter Eight SUSTAINABLE DEVELOPMENT: INDIGENOUS RIGHTS, HUMAN RIGHTS, AND COMMUNITY IMPACTS
8.1 - Introductory Primers
8.1.1 - A Social License to Operate and the Natural Resource Curse
8.1.2 - Primer on Environmental Impacts
8.1.3 - Primer on International Law Sources Related to Sustainable Development
8.2 - FPIC, Indigenous Rights, and Native Title
8.2.1 - Defining FPIC: Free, Prior and Informed Consent
8.2.2 - United Nations (UN) Declaration on the Rights of Indigenous Peoples
8.2.3 - Native Title in the Courts
8.2.4 - Project Reviews Under Sustainable Development Principles
8.2.5 - Conflict Versus Consent in the Extractives Industry
8.3 - Human Rights and the Oil Companies
8.3.1 - Lawsuits Under the Alien Tort Statute of 1789 (ATS) in U.S. Courts
8.3.1.1 - The Setting: Unocal in Myanmar
8.3.1.2 - Legal Analysis of Liability
8.3.1.3 - Talisman in Sudan
8.3.1.4 - The U.S. Supreme Court Ends Most ATS Litigation
8.3.2 - Code of Conduct for the Use of Security Forces
8.3.3 - The UN Guiding Principles on Business and Human Rights (UNGPs)
8.3.3.1 - Defining Human Rights and the State’s Duty to Protect
8.3.3.2 - The Corporate Duty to Respect Human Rights
8.3.3.3 - Access to Remedy
8.3.4 - Post-UNGP Developments: Legislation and Litigation on Many Fronts
8.3.4.1 - Legislation
8.3.4.2 - Litigation
8.4 - Hard Law: National Laws and Contracts with the Host Government and Local Communities
8.4.1 - National Laws of the Host Country
8.4.2 - Obligations in the Host Government Petroleum Contract
8.4.2.1 - Contract Obligations from the 1970s through the 1990s
8.4.2.2 - Contracts After 1994: The Good International Petroleum Industry Practices (GIPIP) Standard and Best Standards
8.4.2.3 - Determining What the GIPIP Standard Requires
8.4.2.4 - Social Impact Assessment Provisions
8.4.2.5 - Global Health, Safety, and Environment Reporting by Corporations
8.4.3 - Community Development Agreements (CDAs)
8.4.3.1 - Defining CDAs and Their Contents
8.4.3.2 - CDAs: Private Governance of Resource Development
8.4.4 - Some Industry Best Practices: Successes and Failures
8.4.4.1 - Chevron in the Niger Delta
8.4.4.2 - Shell Oil in the Peruvian Amazon
8.4.4.3 - ExxonMobil and the Chad/Cameroon Pipeline Project
8.4.4.4 - Outcomes Versus Efforts: Measuring Success in Taming the Resource Curse
8.4.4.5 - ExxonMobil in Papua New Guinea
8.5 - Conclusion
Chapter Nine DISPUTE RESOLUTION - INVESTMENT AND COMMERCIAL
9.1 - Introduction
9.2 - Political Risk and Disputes with Sovereigns
9.2.1 - Political Risks Facing International Petroleum Transactions
9.2.1.1 - Political Risk and International Law in Historical Context
9.2.1.2 - Re-privatization and Market Cycles
9.2.2 - Suing Foreign Governments in State Courts
9.2.2.1 - Who Is the Sovereign?
9.2.2.2 - Exceptions from Jurisdictional Sovereign Immunity
9.2.2.3 - Political Question Doctrine
9.2.2.4 - Act of State Doctrine
9.2.2.5 - Forum Non Conveniens Doctrine
9.2.2.6 - Enforcement of Foreign Money Judgments
9.3 - International Arbitration of Disputes with States and State Instrumentalities
9.3.1 - Governing Law, Stabilization, and Act of State
9.3.1.1 - Law Governing the Arbitration
9.3.1.2 - Law Governing the International Oil Company (IOC)-National Oil Company Project Documents
9.3.1.3 - Excursus: Stabilization of Host Government (HG) Law in Arbitration
9.3.2 - Drafting an Effective Arbitration Clause in HG Agreements
9.3.2.1 - Model Clause
9.3.2.2 - Seat of Arbitration
9.3.2.3 - Multi-Tiered Dispute Resolution
9.3.3 - Major Arbitral Institutions Administering Investor-State Arbitrations
9.3.3.1 - Why an Institution?
9.3.3.2 - Excursus: Major Institutions and Their Key Features
9.3.3.3 - Concluding Thoughts
9.3.4 - Drafting an Effective Sovereign Immunity Waiver
9.3.5 - Enforcement of Arbitral Awards
9.4 - Arbitration Between IOCs and Between iocs and Their Services Contractors
9.5 - Investment Treaty Arbitration
9.5.1 - Excursus: The Dominant Treaties
9.5.1.1 - Energy Charter Treaty
9.5.1.2 - North American Free Trade Agreement/Central America Free Trade Agreement
9.5.1.3 - Bilateral Investment Treaties
9.5.2 - Who Is a Protected “Investor”?
9.5.3 - What Is a Protected “Investment”?
9.5.4 - Leading Protections Codified in Investment Treaties
9.5.4.1 - Expropriation Protections
9.5.4.2 - Fair and Equitable Treatment Protections
9.5.4.3 - Non-Discrimination Protections
9.5.4.4 - Umbrella Clauses
9.5.4.5 - The Arbitration Proceeding
9.5.4.6 - Remedies
9.5.4.7 - What Happens if States Terminate a Treaty?
9.6 - International Arbitration in Commercial Transactions
9.6.1 - Scope of the Basic Arbitration Agreement
9.6.2 - Number of Arbitrators and Appointment of Tribunal
9.6.3 - Rules of Arbitration
9.6.4 - Seat of Arbitration
9.6.5 - Language of Arbitration
9.6.6 - Multi-Tiered Dispute Resolution
9.6.7 - Emergency Arbitrators
9.6.8 - Governing Law of the Contract in Chief
Chapter Ten INTRA-INDUSTRY CONTRACTS
10.1 - Introduction
10.2 - Precontracts
10.3 - Confidentiality Agreements
10.3.1 - Confidentiality Without a Confidentiality Agreement
10.3.2 - Confidentiality by Contract
10.3.2.1 - Duration of Confidentiality
10.3.2.2 - What Is Confidential
10.3.2.3 - How May Confidential Data Be Used
10.3.2.4 - Remedies for Breach
10.4 - Study and Bid Agreements
10.4.1 - The Parties
10.4.2 - Organizing the Study and Bid Group
10.4.3 - Preparing the Report
10.4.4 - Evaluation of the Study and Bid Report and Preparation of the Bid
10.5 - Farmout and Participation Agreements
10.5.1 - Conditions Precedent to the Farmout Agreement Becoming Effective
10.5.1.1 - Host Government (HG) Approval
10.5.1.2 - Other Approvals
10.5.1.3 - Operating Agreements
10.5.1.4 - Environmental Assessment
10.5.1.5 - Satisfying Conditions Precedent
10.5.2 - How the Farmee Earns the Right to an Assignment
10.5.3 - When Is the Interest Farmed Out Transferred
10.5.4 - What Happens if the Farmor or Farmee Fails to Perform
10.6 - Joint Operating Agreements
10.6.1 - The Operator’s Rights and Duties
10.6.2 - Non-Operators’ Remedies for an Operator’s Poor Performance
10.6.2.1 - Damages Recovery
10.6.2.2 - Operator Removal
10.6.2.3 - Other Controls over the Operator
10.6.3 - The Operating Committee
10.6.4 - Performing the Contract
10.6.4.1 - Awarding Contracts
10.6.4.2 - Authority for Expenditures
10.6.4.3 - The Accounting Procedure and the Joint Account
10.6.4.4 - Default
10.6.5 - Sole-Risk and Non-Consent Operations
10.6.6 - Dealing with Production
10.6.7 - Limitations on Transfer of Contract Rights
10.6.7.1 - HG Approval
10.6.7.2 - Minimum Participating Interest
10.6.7.3 - Objections for Cause
10.6.7.4 - Preemptive Rights
10.6.7.5 - Completion of the Transfer
10.7 - Conclusion
Chapter Eleven SEISMIC, DRILLING, AND WELL-SERVICES CONTRACTS
11.1 - Introduction
11.2 - Risk Allocation
11.2.1 - The Importance of Risk Allocation
11.2.2 - Introduction to Contractual Risk Allocation
11.2.3 - Classification of Indemnities
11.2.4 - Property Indemnities
11.2.5 - People Indemnities
11.2.6 - No-Fault Indemnities
11.2.7 - Group Indemnities
11.2.8 - Scope of Indemnities and More on Groups
11.2.9 - More Examples of Backup and Pass-Through Indemnities
11.3 - The Role of Insurance in Support of Indemnities
11.3.1 - Introduction
11.3.2 - Contractual Liability Endorsement
11.3.3 - Waiver of Subrogation
11.3.4 - Additional Insured Endorsement
11.3.5 - Primary vs. Secondary Insurance
11.3.6 - Severability of Interest
11.3.7 - Marine Insurance
11.3.8 - Certificates of Insurance
11.4 - UK Law and the Piper Alpha Disaster
11.5 - Gulf of Mexico and the Deepwater Horizon Disaster
Chapter Twelve CRUDE OIL MARKETING AND SALES
12.1 - Introduction and the Nature and Uses of Crude Oil
12.1.1 - The Nature of Crude Oil
12.1.1.1 - Chemical Composition
12.1.1.2 - Physical and Chemical Properties
12.1.2 - Uses of Crude Oil and the Role of Refineries
12.2 - Oil Marketing: History, Pricing, and Benchmarks
12.2.1 - The History and Evolution of Oil Marketing
12.2.2 - Countertrading
12.2.3 - Prices
12.2.4 - Benchmark Crudes
12.2.5 - Transportation Issues
12.3 - Types of Crude Oil Sales
12.3.1 - Physical Transactions
12.3.1.1 - Long-Term Sales
12.3.1.2 - Forward Sales
12.3.1.3 - Spot Sales
12.3.1.4 - Countertrades
12.3.2 - Financial Transactions
12.3.2.1 - Futures
12.3.2.2 - Options
12.3.2.3 - Contracts for Differences, Spreads, and Swaps
12.3.2.4 - Transactions on Exchanges vs. OTC Transactions
12.4 - Legal Issues Relating to Crude Oil Sales and Marketing
12.4.1 - Contract Formation and Governing Law
12.4.1.1 - Contract Formation and Contract Interpretation
12.4.1.2 - Governing Law
12.4.1.3 - Efforts to Standardize Commercial Laws
12.4.1.4 - Soft Law
12.4.2 - Allocation of Costs and Risks
12.4.2.1 - International Contracts Terminology and Incoterms
12.4.2.2 - Force Majeure, Impossibility, and Frustration
12.4.2.3 - Charters and Bills of Lading
12.4.2.4 - Insurance and Loss of Cargo
12.4.2.5 - Risk of Loss as Between Carrier and Cargo Owner
12.4.2.6 - Collisions Between Vessels
12.4.2.7 - Documentary Sales and Letters of Credit
12.4.2.8 - Transport of Crude Oil by Pipeline
12.4.2.9 - Agreements for the Extraction of Natural Gas Liquids
Chapter Thirteen NATURAL GAS MARKETING AND SALES
13.1 - What Is "Natural Gas"?
13.1.1 - Chemical Composition
13.1.2 - Properties
13.1.3 - Uses
13.1.3.1 - Electric Power Generation
13.1.3.2 - Industrial Use
13.1.3.3 - Commercial and Residential
13.1.3.4 - Combined Heating and Power
13.1.3.5 - Transportation
13.1.4 - Units Used to Describe the Quantity of Gas
13.2 - Obtaining Natural Gas and Methane
13.2.1 - Conventional Natural Gas
13.2.2 - Unconventional Natural Gas
13.2.3 - Associated Gas
13.2.4 - Coalbed Methane
13.2.5 - Biogas
13.2.6 - Coal Gasification
13.2.7 - Methane Hydrates
13.3 - Handling Natural Gas
13.3.1 - Natural Gas Processing
13.3.1.1 - Removing Water Vapor
13.3.1.2 - Removing Hydrogen Sulfide
13.3.1.3 - Mercury
13.3.1.4 - Removing Other Hydrocarbons—the Natural Gas Liquids
13.3.2 - Storage of Natural Gas
13.3.2.1 - Subsurface Storage
13.3.2.2 - Compressed Natural Gas Storage in Tanks At or Near Surface
13.3.2.3 - Storage of Liquefied Natural Gas (LNG)
13.3.3 - Transport of Natural Gas
13.3.3.1 - Pipelines
13.3.3.2 - LNG Transport
13.4 - Sales, Marketing, Contracting, and Project Issues
13.4.1 - Pipeline Sales and Transportation
13.4.1.1 - Pipeline Sales
13.4.1.2 - Contractual Provisions in Pipeline Sales and Transportation Agreements
13.4.2 - LNG Projects, Sales, and Transportation Agreements
13.4.2.1 - The LNG Value Chain
13.4.2.2 - Project Structures
13.4.2.3 - Long-Term LNG Sales and Purchase Agreements
13.4.2.4 - Short-Term and Spot Market Sales
13.4.2.5 - Risk of Loss and Costs of Transport
13.5 - Trends and Contemporary Issues
13.5.1 - Increasing Consumption and Trends Toward Shorter-Term Sales Contracts
13.5.2 - Climate Change and Other Air Quality Concerns
13.5.3 - Flaring
Chapter Fourteen THE FUTURE OF THE PETROLEUM INDUSTRY AND CLIMATE CHANGE
14.1 - Forecasts of Future Energy Supply and Demand
14.2 - Scenarios of Energy Futures
14.3 - Climate Change and the Oil Industry
14.3.1 - The Paris Agreement and Climate Science
14.3.2 - The Transition to Electric Vehicles
14.3.3 - Unburnable Carbon: Stranded Assets and Fossil Fuel Divestment
14.3.4 - Climate Risk Disclosure
14.3.5 - Oil Company Strategies for the Energy Transition
14.4 - Facing an Uncertain Future: Winners and Losers in the Energy Transition to 2100
14.4.1 - Uncertainties Ahead
14.4.1.1 - Shale Production and Geopolitical Price Wars
14.4.1.2 - Shale Production Outside the U.S.
14.4.1.3 - Global Gas and LNG Supplies
14.4.1.4 - Pace of Transition from Fossil Fuels
14.4.1.5 - Decarbonization
14.4.1.6 - Adaptation to Higher Temperatures
14.4.2 - Winners and Losers: Companies and Countries
14.4.3 - The Energy Industry in 2100