Question:
Write an essay on Legal Aspects of Oil and Gas Industry?
Oil and gas is one of the most essential resources of our society. Over the years, several emerging countries have emphasised towards the discovery of natural resource with the aim of ensuring the economic growth of the nation. In this regard, more specifically it can be stated that through emphasising towards the natural resources, several global petroleum and gas manufacturing organisations have generated energy. As an effect, economic development has been witnessed and wealth has been maximized for the global nations in terms of foreign earnings. On the other hand, growth of petroleum and gas industry has also ensured sustained economic development for a nation (Marful-Sau, 2009).
According to the report of Lukoil (2013), it is revealed that petroleum and gas has been one of the most growing industries among the global market place. In this regard, more specifically it can be argued that over the years the petroleum and gas production has been increased at a rate of 1.2% annually (Lukoil, 2013). On the other hand, based on the report of Ernst & Young (2014), it is identified that the consumption of petroleum and gas has been increasing approximately around 50% in every year. Thus, with the aim of ensuring the future prosperity, several governments have incorporated economic policies and legal aspects i.e. petroleum and gas industry (Ernst & Young, 2014).
In this assignment, the aim is to discover and analyse the commercial, technical and legal aspects of the petroleum and gas industry. Moreover, the study will also highlight the key aspects of the governments through which sustainability development can be ensured for the petroleum and gas industry. Additionally, the study will also try to examine as well as evaluate the key features of the legal aspects by which governments usually negotiate challenges during the international trade operation of oil and gas industry. Furthermore, this particular assignment will emphasise towards the factors by which international petroleum and gas manufacturing organisations can ensure their long term sustainability development.
In order to highlight the impact of the petroleum and gas industry it is identified that the government of United Kingdom (UK) has extremely emphasised towards the environment planning related principles for ensuring the future growth of petroleum and gas industry. At the same time, through emphasising towards environment planning related principles governments of UK has also tried to ensure the balance of natural resource and ecology related aspects of the society. In this regard, based on the report of United Nations Environment Programme (UNEP) Industry and Environment (2015), it is identified that the government of UK as well as United States (US) have contributed their exclusive attention towards the execution of environment related programs with an objective of ensuring the growth of petroleum and gas industry within the globe. At the same time, through emphasising towards the legal framework, the governments of UK and US have also tried to ensure its statutory control over the global oil and gas industry (United Nations Environment Programme (UNEP) Industry and Environment, 2015). In this context, based on the report of Management of Ghana National Petroleum Corporation (2008), it is notified that through the assistance of constant supervising and monitoring, governments can execute the growth of petroleum and gas industry. At the same time, through incorporating qualitative measures outcome of the petroleum and gas industry can be developed significantly (Management of Ghana National Petroleum Corporation, 2008).
In order to discuss the technical, commercial and legal aspects of the petroleum and gas industry; it can be claimed that petroleum and gas is one of the key aspects of modern society. In this context, it can be also argued that through ensuring the growth of petroleum and gas industry, global petroleum and gas manufacturing organisations can enhance the supply of energy towards the power industry. At the same time, it may also ensure the supply of fuel for transportation purpose. Moreover, through emphasising towards the technical, commercial and legal aspects of the petroleum and gas industry; it is also possible to ensure the resource of planning related aspects of minerals. Apart from this, through emphasising towards oil and gas industry; governments can ensure protection of water resources as well as emissions of pure air, which will lead positive impact towards the society in terms of health and safety related aspects. Additionally, it will also reduce the negative impact on the society in terms of climate change related aspects (Department for Communities and Local Government, 2013).
Based on the report of Swansea University (2015), it is identified that the government of UK has introduced a new legal constituent, which is named as Latin Legum Magister (LLM). In this regard, it can be argued that through emphasising towards the LLM, the government of UK has tried to ensure the protection of natural resource in a significant manner. Moreover, it can be stated that through emphasising towards the LLM related aspects, the government of UK has tried to establish conduct and ethics amid the petroleum and gas manufacturer during the practice of business operation. Simultaneously, through emphasising towards the LLM related aspects, the government of UK has tried to protect the waste of natural resource within the globe (Swansea University, 2015). In this context, the report of The University of Houston Law Center (2014), mentioned that through concentrating towards the LLM related aspects the government of UK has tried to ensure the protection of the intellectual property rights. Additionally, it can be argued that through adopting LLM related aspects, the government of UK has tried to enrich the international trade and commerce operations within the petroleum and gas industry (The University of Houston Law Center, 2014).
Based on the report of The University of Houston Law Center (2014), it is also identified that due to the presence of LLM features, modern petroleum and gas manufacturing organisations have witnessed greater profitability and success during the during international trade operations. At the same time, it is also revealed that the major stakeholders of the petroleum and gas industry have been benefitted in a significant manner due to the presence of LLM features. As an effect, it is revealed that during the business operations of petroleum and gas industry, the loyalty of the stakeholders such as federal governments, consumers, owners, investors and banks has been enhanced in a significant manner. The following discussion will highlight the legal aspects of the oil and gas industry within the globe (The University of Houston Law Center, 2014).
In accordance with Soyer and Kurtz-Shefford (2014), it is notified that the government of UK as well as US has highly concentrated towards the contracts as well as liabilities of the petroleum and gas industry. In this regard, rationally it can be claimed that the governments of UK and US has tried to ensure the development of gas and petroleum projects within the globe by concentrating on its life cycle. Similarly, with an aim of ensuring the exploration and manufacturing of gas and petroleum, the governments of UK and US has emphasised towards the confidentiality agreements during the international trade operations. Additionally, through concentrating towards confidentiality agreements the governments of UK and US has also ensured the positive impact towards the society as well as environment in terms of natural resource and minerals. Moreover, existence of legal aspects i.e. oil and gas industry has assisted governments to negotiate with the threats and challenges within the industry (Soyer and Kurtz-Shefford, 2014).
According to the report of OPEC (2015), petroleum and gas industry is one of the most valuable industries within the globe. In this context, it can be stated that the petroleum and gas industry can influence the growth rate of a nation in terms of gross domestic product (GDP) and profitability. At the same time, the petroleum and gas industry may also create an impact on the economy and employment related aspects of a nation. Based on the report of OPEC (2015), it is also witnessed that the government of UK as well as US has highly concentrated towards the innovative and courageous approaches, which has enhanced the recognition of the petroleum and gas industry within the globe. On the other hand, through emphasising towards the technological aspects the government has enhanced the growth rate of the petroleum and gas industry in around the globe. Moreover, it can be also claimed that public and commercial legal aspects have also assisted global petroleum and gas manufacturing organisations to enhance its operational efficiencies and reduce challenges during the international trade operations (OPEC, 2015).
Moreover, it can be also claimed that the World Trade Organisation (WTO) has also provided their extensive attention for ensuring the development of petroleum and gas industry by reducing internal and external challenges during the international trade operations. On the other hand, it can be claimed that for enhancing the overall efficiency of the petroleum and gas industry, WTO has highly concentrated towards human rights and intellectual property rights related aspects, which may influence the overall performance of the international trade operations. At the same time, WTO has also introduced financing and licensing mechanism for ensuring the development of the petroleum and gas manufacturing related projects. In this context, Soyer and Kurtz-Shefford (2014) claimed that through ensuring intellectual property rights i.e. natural resources and by enhancing human rights, the governments of UK and US has enriched overall competencies of the oil and gas industry (Soyer and Kurtz-Shefford, 2014).
On the other hand, with the aim of ensuring the practice of law, the governments of UK and US has highly concentrated towards the commercial aspects of the petroleum and gas industry. At the same time, the governments have also provided their higher attention for ensuring the relationship between international traders, by establishing major contracts between worldwide nations. Apart from this, the governments of UK and US has also emphasised towards the negotiable bills of lading for establishing better trade relations within the globe. In this context, the governments have also engaged tankers and ships for enhancing business performance within the petroleum and gas industry. As an effect, it is identified that through the assistance of tankers and ships the governments of UK and US has reduced international trade barriers and also minimize trade and commerce related challenges i.e. petroleum and gas industry. In this regard, Williams (2014) argued that the governments of UK and US have concentrated towards the economic policy and international trade related laws for ensuring the overall growth of the oil and gas industry. As an effect, it is identified that the overall treat of the global warming has been reduced in manner. Simultaneously, carbon (CO2) emission and chances of substance dangerous gases such as sulphur and nitrogen compounds have been reduced in an effective manner, which has ensured the balance of socio-environment in terms ecological as well as atmosphere related aspects (Williams, 2014).
In accordance with Soyer (2014), indemnity of ships and tankers is one of the key aspects i.e. international trades. In this context, more specifically it can be argued that through concentrating towards the insurance law, governments can ensure the recovery of losses during the disaster conditions such as tsunami, store and earthquake among others. Thus, it can be claimed that through emphasising towards the insurance laws it is possible to ensure the relevance of international business operations. At the same time, through adoption of insurance laws, the governments of UK and US have enhanced the efficiency of overseas business operations and it has also reduced international trade related challenges. Additionally, it can be argued that through emphasising towards the trade related laws, governments can enhance the future prosperity of oil and gas industry (Soyer, 2014).
Based on the viewpoint of Tettenborn (2014), international trade law is one of the key aspects through which global petroleum and gas manufactures can enhance the overall business efficiency and outcome of the business operations within the industry. Moreover, Tettenborn (2014) claimed that through emphasising towards international trade laws, it is possible to maintain the structure and operations of the international trade. Simultaneously, by concentrating on the international trade laws it is possible to develop the capital improvement plan (CIP). At the same time, through establishing adequate international trade laws it is possible to maintain the cost, insurance and freight (CIF) contracts of the petroleum and gas manufacturer. Additionally, proper international trade laws always emphasise towards the free on board (FOB) i.e. of international trade operations of petroleum and gas manufacturer. Thus, it can be evidently stated that adequate international trade laws can assist oil and gas manufacturers to minimize the international trade obligations i.e. buyers and sellers (Kerr, 2007).
In this context, it can be stated that over the years, International Chamber of Commerce (ICC) has provided their higher attention towards the international trade laws with the aim of enhancing the international trade relations amid global nations. Moreover, ICC had concentrated on adequate international trade laws, with an aim of minimizing the trade risk involvement. On the other hand, through emphasising towards the international trade laws, it is also possible to reduce the chances of breach of contract during petroleum and gas trade operations. Consequently, through concentrating on the international trade laws, it is possible to ensure the authenticity of the bill of lading, insurance of transit goods and genuineness of the trade transport documents, which may conforms the protection of law i.e. international trading (Tettenborn, 2014).
According to the view point of Leloudas and Wen (2014) international litigation and arbitration is one of the foremost challenges for the global petroleum and gas manufacturing organisations. In this context, it can be argued that that international litigation and arbitration can obstruct the overall business performance for an organisation. At the same time, it may also influence several challenges for a nation in terms of economic and financial aspects. In this regard, the governments of UK and US have highly emphasised towards the factors through which it is possible to resolve the challenges of the governments in terms of international litigation and arbitration (Leloudas and Wen, 2014). Thus, ICC had paid extensive attention towards the judicial and arbitration structures with an objective of reducing the international trade disputes during the trade and commercial operations. In this context, it can be evidently stated that through incorporating special international laws, the governments of UK and US have addressed international litigation and arbitration i.e. oil and gas industry (Likosky, 2005).
According to the viewpoint of Toth, (2006), during the practice of international trade operation within the petroleum and gas industry, it is highly essential for the organisations to incorporate international banking and commercial payments mechanism for ensuring effective outcome of the business process. In this context, it can be stated that through emphasising towards banking and commercial payments mechanism, it is possible to reduce discrepancy in terms of cash payments. At the same time, it may also reduce obligation of the buyers in terms of documentary credits and bills of exchange. Moreover, it may also ensure integrated international payments for the oil and gas industry (Toth, 2006).
Based on the above discussion, it can be stated that technical, commercial and legal aspects is one of the most essential factors, through which global petroleum and gas manufacturing organisations can enhance their operational efficiency and also can ensure the authenticity and reliability of the business operations. Simultaneously, it is also revealed that the governments of UK and US have emphasised towards consultation and disclosure of the international trade related information with an objective of enhancing the quality of business operations (Likosky, 2006). Moreover, the governments have also emphasised towards the employment, utility and infrastructure related aspects with an aim of ensuring smooth execution of trade operations within the petroleum and gas industry. Additionally, the governments have paid more attention towards health and community related aspects for establishing positive relations with the stakeholders’ of the oil and gas manufacturer (Department for Communities and Local Government, 2013).
Conclusion
From the above discussion, it is revealed that most of the emerging countries governments have incorporated legal aspects along with technical and commercial aspects, with an aim of enhancing the operational efficiency of the petroleum and gas industry. At the same time, through concentrating on legal aspects, the governments of UK and US have enhancing the ability of negotiating challenges during the international trade operations. Thus, in order to conclude the topic, it can be evidently stated that adequate legal aspects may improve future prosperity oil and gas industry.
References List
Marful-Sau, S., 2009. Is Ghana Prepared to Manage The Potential Environmental Challenges of an Oil and Gas Industry?. University of Dundee, pp. 1-15.
Management of Ghana National Petroleum Corporation, 2008. Status Report on the Jubilee Field Oil and Gas Development. Daily Graphic, pp. 26-26.
Department for Communities and Local Government, 2013. Planning practice Guidance for Onshore Oil and Gas. Crown copyright, pp. 1-29.
The University of Houston Law Center, 2014. Practice of Law in the Oil and Gas Industry. Assignments, pp. 1-2.
United Nations Environment Programme Industry and Environment, 2015. Annual Report 2014. Publications, pp. 1-62.
Ernst & Young, 2014. Oil & Gas Industry Forecast. Assurance, pp. 1-47.
Lukoil, 2013. Global Trends in Oil & Gas Markets To 2025. Global Trends, pp. 1-64.
Parashar, S., No Date. Legal Aspect of Oil and Gas Sector. Subject: Oil and Gas [Online] Available at: https://www.manupatrafast.com/articles/PopOpenArticle.aspx?ID=3b9928f3-1807-4916-b783-33b3c38992db&txtsearch=Subject:%20Oil%20And%20Gas [Accessed on 8 July, 2015].
UNEP Industry and Environment, 1997. Environmental Management in Oil and Gas Exploration and Management. Oil Industry International Exploration and Production Forum, pp. 1-76.
Swansea University, 2015. LLM in Oil and Gas Law. College of Law, pp. 1-2.
Soyer, B. and Kurtz-Shefford, T., 2014. LLM in Oil and Gas Law. Oil and Gas Law: Contracts and Liabilities, p. 2.
Kurtz-Shefford, T., 2014. LLM in Oil and Gas Law. Public and Commercial Legal Aspects of Oil and Gas Exploration and Production (Compulsory), p. 2.
Williams, R., 2014. LLM in Oil and Gas Law. Charter parties: Law and Practice, p. 2.
Soyer, B., 2014. LLM in Oil and Gas Law. Marine Insurance Law, p.2.
Tettenborn, A., 2014. LLM in Oil and Gas Law. International Trade Law, p. 2.
Leloudas, G. and Wen, S., 2014. LLM in Oil and Gas Law. International Litigation and Arbitration, p. 2.
Kerr, J., 2007. Ecuador’s New Energy Minister Calls for Renegotiation of Contracts, But Not Nationalization. Global Insight.
Toth, 2006. Documentary Credits in International Commercial Transactions with Special Focus on the Fraud Rule. Athens/Budapest, pp. 1-191.
Likosky, M. B., 2006. Law, Infrastructure, and Human Rights. Cambridge University Press.
Likosky, M. B., 2005. Privatising Development: Transnational Law, Infrastructure and Human Rights. Leiden.
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