Duval et al - International Petroleum Exploration and Exploitation Agreements

full all chapter5 chapter6 chapter7 chapter8 chapter9

chapter4 chapter5 chapter6 chapter7 chapter8 chapter9

Transparency and Accountability

Policy, Legal and Contractual Framework

Sector Organization and Institutions

Fiscal Design and Administration

Revenue Management and Distribution

Sustainable Development

Duval, C., LeLeuch, H., Pertuzio, A., Weaver, J., International Petroleum Exploration and Exploitation Agreements: Legal, Economic and Policy Aspects (New York, United States: Barrows Company Inc., 2nd edition 2009)

In this book, the authors address the legal, fiscal, economic, financial and policy issues surrounding the exploration and exploitation of petroleum resources in view of balancing the interests of the parties involved in petroleum deals: the host countries, the international oil companies and the consumers. It is divided into seven parts.

In part I, the authors discuss the legal, legislative and historical aspects of petroleum activities. After an overview of the significance of petroleum as source of energy in chapter 1, they look at the legal concepts applicable to petroleum ownership (from domanial, regalian and Islamic legal systems perspectives) in chapter 2 followed by a discussion of petroleum legislation (codes) as the structures that underpin the exploration and exploitation of petroleum resources in chapter 3.

In part II the authors review the main forms of international petroleum agreements. Thus, in chapter 4 they look at the evolution of such agreements from concession to risk service agreements. Chapters 5, 6, and 7 explore the legal nature and the main features of concession, production sharing and risk services agreements respectively. Chapter 8 addresses the phenomenon of state participation, including the nature and forms of such mechanisms.

In part III the authors go through the main operational and administrative clauses of international petroleum agreements, exploring in chapters 9 and 10 those clauses related to exploration, appraisal of discoveries, development and production, decommissioning, approval of annual work programs and budgets, management and control of operations, information and data, reporting, foreign exchange transfers, imports and exports, marketing and valuation of petroleum, and accounts and audits. Taking the analysis one step further in chapter 11, they not only discuss the natural gas clauses in an international petroleum agreement but also look at the international gas market and its current trends. The section is completed by chapter 12 which addresses the situation where a petroleum deposit straddles the boundaries of two or more contracts areas, a concept known as unitisation.

In part IV, Duval et al tackle the economic, financial and fiscal aspects of international petroleum agreements. They analyze the government take – the aggregate amount of taxes and other revenues accruing to the host country – under concession, production sharing and risk service agreements in chapter 13, while in the following chapter (14) they focus on how to deal with double taxation so as to ensure steady transnational investments for petroleum exploration and exploitation. Chapter 15 concludes part IV with a review of the techniques - sale of common shares, equity financing, convertible securities, corporate borrowing ‐ used to finance a petroleum project.

Part V deals with two major agreements used in petroleum operations to mitigate and spread risks: (1) a joint operating agreement - contractual framework for joint exploration and exploitation operations - is discussed in chapter 16, and (2) a farm-out agreement - assignment of a part of a participating interest to a new party – is addressed in chapter 17.

Part VI is dedicated to legal aspects of international petroleum agreements. Thus, in chapter 18 the authors discuss the mechanisms intended to deal with future events and changes: force majeure, hardship, adaptation and stabilisation clauses. In chapter 19 they look at the dispute resolution mechanisms to be included in a petroleum agreement; a special emphasis is placed on arbitration while the issues of choice of law and forum, sovereign immunity and enforcement of arbitral awards are also discussed in detail.

The final part of the book, part VII, addresses the issue of sustainable development in international petroleum agreements. Thus, the final chapter focuses on the policy of sustainable development for petroleum producing countries, local communities and investors, including the environmental and social issues related to petroleum operations

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