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Author interviews

Upstream Oil and Gas

1.        What recent developments have there been in oil and gas law?

The UK government has licensed the exploitation of onshore petroleum reserves since the 1930s and offshore reserves since the 1970s. The UK Continental Shelf is now considered a mature petroleum province. One might therefore conclude that oil and gas is a stale legal subject. Yet paradoxically, maturity has led to updated laws and regulations for the industry. The super-major oil companies which dominated the North Sea from its infancy are now withdrawing and making way for new entrants. Government is encouraging this ownership diversity and has recently promoted regulations designed to make asset transfers quicker and less expensive. It is in government's interests to ensure that every last barrel or cubic foot of petroleum is produced while a specialist workforce is in place and infrastructure remains operational. The benefits are received by the Treasury in the form of increased tax receipts. Recent government measures have encouraged this diversified ownership base and facilitated field transfers. Regulators believe that more petroleum, and therefore fiscal revenue, will result from these initiatives.

Other developments relate to the use of offshore infrastructure and its decommissioning. With increasingly smaller and therefore economically marginal fields, companies are relying more and more on access to existing offshore infrastructure belonging to third parties in order to make production viable. This is particularly the case where natural gas reserves are developed and third-party pipelines are required to transport production to shore. In order to promote the internal market, the European Union has encouraged infrastructure owners to make capacity available to applicants on a transparent and non-discriminatory basis.

Lastly on recent changes, and significantly more self-evidently, the law on decommissioning offshore infrastructure is, in a maturing market, being finally implemented in practice. Regulation in this area is a product of the United Kingdom's international legal obligations, with which government is attempting to comply by imposing relevant standards on companies operating in the North Sea. The principles of legislation on this subject have been in place since 1987. However, over the last few years the law has been, and will continue to be, fine tuned.

In addition to these, there have been a number of other recent developments in law and practice – and these themes are developed throughout the book.

2.         What is the purpose of the book?

Plenty of good textbooks on oil and gas law are currently available (including sister publications produced by Globe Law and Business). The aim is to supplement, rather than replicate, these available texts. The main purpose is to reproduce several of the principal source materials underlying the law contained in existing textbooks. Sources include legislation, case law, international treaties, government guidance notes and industry best practice. Each chapter begins with a commentary in which the subject is introduced. Because the book is intended as a cases and materials text, the topics covered are limited to those areas where source materials are applicable. It does not cover subjects where there are no relevant sources. The chapters of the book are therefore limited to principles of ownership of petroleum, joint operating agreements, unitisation, the law of capture, gas sales agreements, access to infrastructure and decommissioning.

3.         Does your book focus on UK law?

The book takes UK law as its starting point. However, oil and gas disputes are infrequently litigated and there is a resulting lack of case law on many important areas of UK petroleum law. The fiduciary nature of an operator's duties is a good example. Therefore, in addition to UK law, the book cites cases from Australia, Canada, New Zealand, the United States and elsewhere. It also includes various multilateral materials such as United Nations conventions and resolutions, the European Energy Charter and similar international treaties. Relevant sections of the commentary provide a comparative analysis between the energy laws of different jurisdictions.

4.         What type of readership is the book aimed at?

It is designed for experienced oil and gas professionals with existing knowledge of the industry's contractual and legal issues. The book provides convenient access to underlying source materials, together with a commentary on those materials. It is thus intended to be used alongside an oil and gas text.