Question:
• Demonstrate a good understanding of the substantive rules of International law applicable to the oil and gas industry
• Evaluate the key principles of contract formation in International commercial transactions and key international law principles and trends in the oil and gas sector
• Assess the effectiveness of international law in addressing the environmental impact of oil exploration and exploitation
• Demonstrate a critical understanding of the importance of oil and gas law as a distinct subject, studied in a practical and commercial context.
• Knowledge and understanding: Demonstration of detailed knowledge of the legal framework of oil and gas industry and the implications of national, regional and international law.
Oil and gas industry is one of the most growing industries amid the global market place. The demand of oil and gas has been increasing over the years approximately at a rate of 1.2% annually (Lukoil, 2013). In this regard, more specifically it can be argued that the demand of oil and gas can be highly observed in the global market due to high consumption and demand of energy in the global market. According to the report of Ernst & Young (2014), report it is revealed that the consumption of oil and gas has been increasing roughly around 50% in every year (Ernst & Young, 2014; Lukoil, 2013).
According to the viewpoint of Parashar (n.d.), it is identified that the whole oil and gas industry is globally recognised as a part of metal minerals industries. In this regard, more specifically Parashar (n.d.) argued that the whole oil and gas industry usually supervised and regulated by the governments with the aim of ensuring the future sustainability development. Moreover, it can be also claimed that the government has adopted economic policies and legal aspects with the aim of ensuring the command over the oil and gas industry. In this context, it is also notified that with the aim of ensuring the future development the government has segregated the overall oil and gas industry into three parts such as upstream, midstream and downstream (Parashar, n.d.).
In this particular assignment, the objective is to identify and analyse the commercial, technical and legal aspects of the oil and gas industry, which usually assist governments to ensure the sustainability development for the future. Apart from this, during the discussion of commercial, technical and legal aspects of the oil and gas industry the study will highly emphasise to identify the challenges of this industry. Moreover, the study will try to examine and evaluate the key areas and features through which governments are usually negotiate challenges i.e. oil and gas industry. Additionally, the study will also emphasise towards the factors through which international oil companies can enhance their future performances.
According to the report of UNEP Industry and Environment (1997), it is identified that large numbers of developed countries government has highly emphasised towards the environment planning related principles with the aim of ensuring the sustainability and responsibility of the environment in terms of ecology related aspects. In this context, government and larger oil companies has provided their exclusive attention towards the implementation or execution of the environment related programs. Similarly, the government has also provided their attention towards the legal framework with the aim of ensuring the statutory control over the environment planning related principles. Moreover, government and larger oil companies have also tried to ensure effective execution of the environment related programs through the assistance of constant supervising and monitoring. In this regard, based on the report of UNEP Industry and Environment (1997), it is witnessed that during the monitoring and statutory control, government and larger oil companies has incorporated qualitative measure for ensuring the effective execution of the environment related planning programs.
According to the report of Swansea University (2015), government and larger oil companies has introduced new Latin Legum Magister (LLM) for the oil and gas industry, which can be referred as a one of the most essential constituent through which it can be possible to ensure the protection of natural resource. At the same time, it can be argued that through concentrating towards the new LLM an oil and gas manufacturing organisation can ensure its conduct and ethics of the business operations. In this context, it can be also argued that through concentrating towards the new LLM, government of UK can protect the waste of natural resource. At the same time, by concentrating on New LLM, government of UK can also ensure the protection of the intellectual property rights i.e. natural resources. Additionally, it can be claimed that the incorporation of new LLM i.e. oil and gas industry may lead significant growth in terms of global commerce. On the other hand, new LLM features also may help modern gas and petroleum organisations to enhance their business performance in the international market (Swansea University, 2015).
In accordance with Soyer and Kurtz-Shefford (2014), it is identified that government and larger oil companies has emphasised towards the contracts and liabilities of the oil and gas industry with the aim of ensuring the life cycle of the gas and petroleum project. In this regard, Soyer and Kurtz-Shefford (2014) claimed that government and larger oil companies has highly emphasised towards the confidentiality agreement with the aim of ensuring the exploration and production of gas and petroleum. Simultaneously, through incorporating confidentiality agreement approach government and larger oil companies has tried to ensure commercial and legal issues during the international trade operations. On the other hand, through concentrating towards the confidentiality agreement government and larger oil companies have tried to ensure the environmental impact i.e. natural resource as well as minerals. Additionally, it can be mentioned that through concentrating towards the confidentiality agreement during the oil and gas business operations government and larger oil companies tried to reduce serious threats related to the oil and gas industry and it has also addressed potential liability relates aspects (Soyer and Kurtz-Shefford, 2014).
In accordance with Soyer and Kurtz-Shefford (2014), the oil and gas industry is one of the giant industries amid the entire globe. The industry usually operates its business operations in around the globe. In this regard, the report of OPEC (2015), mentioned that through the assistance of innovative as well as courageous approach the oil and gas industry has created its recognition in the global market place. Simultaneously, technological development has assisted the organisation to enhance its growth rate in an extensive manner. On the other hand, the industry has also witnessed certain challenges during its international operations due to internal as well as external aspects. Thus, government and larger oil companies have concentrated towards the legal regulations for overcoming all those challenges. In this context, it can be argued that the World Trade Organisation (WTO) has paid their extensive attention towards the global framework with the aim of reducing the challenges of the oil and gas industry. Moreover, it is also witnessed that the WTO has emphasised towards oil and gas industry with an aim of enhancing the influence of human rights during the international trade operations. Additionally, WTO has also provided its supporting hand towards the developing as well as under developed countries by financing and licensing on the oil and gas projects. Thus, after considering all these above stated aspects it can be evidently argued that through concentrating towards the oil and petroleum industry, WTO has ensured the intellectual property rights i.e. natural resources. Additionally, it has also assisted global organisations to enhance its business competencies (OPEC, 2015; Kurtz-Shefford, 2014).
In order to ensure practice of law, government and larger oil companies has highly emphasised towards the commercial aspects. At the same time, the government has also engaged their attention towards the major contracts of the oil and gas industry. Apart from this, with the aim of ensuring the relationship between international traders, government and larger oil companies has highly concentrated towards the negotiable bills of lading. In this context, it can be also claimed that through concentrating towards the engaging tankers and ships government and larger oil companies has addressed international trade and commerce related challenges. In this context, Williams (2014), argued that through concentrating towards the economic policy as well as international trade related laws government and larger oil companies has enhanced overall growth rate of the oil and gas industry. Moreover, it can be also stated that through ensuring the practice of law government and larger oil companies has addressed the threat of global warming. In this context, rationally it can be argued that through concentrating towards carbon (CO2) emissions and other dangerous substances such as sulphur and nitrogen compounds among others, government and larger oil companies has reduce the diversified impact of the oil and gas production in the environment and atmosphere (Williams, 2014).
According to the viewpoint of Soyer (2014), insurance of ships or tankers is one of the most crucial aspects for the oil and gas industry. In this regard, rationally it can be claimed that during the practice of law, it is highly essential for the government to provide attention towards insurance law for ensuring the recovery of unexpected loss from the disaster condition such as storm, tsunami and earthquake among others. Thus, government and larger oil companies have emphasised towards the insurance law for ensuring the relevance international business operations among the global countries. In this context, it can be claimed that the government of United States (US) and many other countries have adopted insurance law with the aim of ensuring the overseas business operation and it also assured respective position of the commonwealth countries. In this context, more specifically it can be argued that larger oil companies have witnessed several challenges during the negotiation process of drafting contracts (Soyer, 2014).
In accordance with Tettenborn (2014), international trade law is one of the most essential aspects i.e. of business operations of the oil and gas industry. On the other hand, it can be claimed that through concentrating towards the international trade law it is possible to enhance the structure and operation of international trade in terms of oil and gas. Moreover, specifically it can be argued that through concentrating towards international trade law it is possible to improve the capital improvement plan (CIP) i.e. global business. Apart from this, international trade law also assist an organisation to focus towards the free on board (FOB) and cost, insurance and freight (CIF) contracts among others. Furthermore, international trade law also can reduce the obligations in case of rights of buyers as well as sellers. Additionally, through adopting adequate international trade law it is possible to reduce the risk related aspects and ensure the remedies for breach of contract. Consequently, international trade law also ensure the authenticity of the trade transport documents, bill of lading and the insurance of transit goods, which will ensure the protection of law i.e. international buyers. In this context, it can be argued that oil companies have witnessed several challenges during the negotiation process of drafting contracts, which has influenced governments to incorporate international trade law. Thus, the International Chamber of Commerce (ICC) has highly emphasised towards international trade law for ensuring significant international trade relation between the global nations i.e. oil and gas industry (Tettenborn, 2014).
In accordance with Leloudas and Wen (2014) international trade disputes is one of the major threats for the global organisations, which may hamper the business performance and also can influence few other challenges for a nation. In this regard, with the aim of resolving this particular challenge government and larger oil companies has established a special national court, which may address the international trade disputes by considering jurisdiction over the global network. In this regard, more specifically it can be argued that through concentrating towards the judicial as well as arbitration structures ICC has resolved the international trade dispute. Thus, it can be evidently mentioned that through considering the special international law government and larger oil companies has addressed international litigation and arbitration i.e. oil and gas industry. At the same time, adoption of special international law has also assisted oil and petroleum manufacturers to resolve business disputes (Leloudas and Wen, 2014).
In accordance with Tettenborn (2014), during the business operation of oil and gas industry, organisations need to adopt international banking and commercial payments mechanism, which may reduce the payment obligations for the buyers i.e. of trade operations. At the same time, it can be argued that through incorporating international banking and commercial payments mechanism global organisations can reduce discrepancy cash payments, documentary credits and bills of exchange among others. Thus, the government UK has incorporated this particular mechanism with the aim of enhancing the quality of the international banking system, which will ensure integrated international payments among the global nations during the oil and gas trading. In this context, Tettenborn (2014) also believed through adopting international banking and commercial payments mechanism global oil and petroleum organisations will witness certain advantages as well as disadvantages during the trade operations (Tettenborn, 2014).
Based on the above discussion, it is identified that along with technical and commercial aspects, legal aspects is also an essential factor, which can enhance the operational efficiency of the oil and gas industry. Simultaneously, it can be also argued that through concentrating towards the legal aspects governments can ensure the overall negotiation process i.e. of oil and gas industry, which will assist international oil organisations to enhance their business performances in an effective manner. In this context, in order to critically analyse the key features of the government i.e. of negotiation process it can be stated that legal and other agreement with the business partners will ensure the authenticity and reliability of the business operation (Leloudas and Wen, 2014).
At the same time, through concentrating on safety and security related aspects, an oil and gas manufacturer can enhance its operational efficiency. Simultaneously, government should emphasise towards consultation as well as disclosure of the information with the aim of ensuring as well as varying the quality of the business operation in more effective manner. Apart from this government need to be stay focused regarding compensation and resettlement with an aim of significant development in the oil and gas related business projects. In this regard, it can be argued that through providing attention towards compensation and resettlement an oil and gas manufacturer can enhance its market value in the operating market place. Moreover, government should highly emphasise towards the employment for ensuring smooth execution of business operation. In this context, apart from recruitment and hiring, the government should pay attention towards training and development related aspects, which will ensure long term sustainability and better execution of the business operations. Consequently, government need to concentrate towards infrastructure and utility related aspects of the oil and gas business, which will ensure greater profitability and long term sustainability for the future (Tettenborn, 2014).
Additionally, the government should pay attention towards the health management related aspects, which will ensure health concern of the community and it will also help organisations to build a positive relation with the oil and gas manufacturer as well as its stakeholders. Thus, based on these evidences it can be claimed that through concentrating towards all these above stated aspects an international oil and gas manufacturing organisation can enhance its profit margin as well as overall profitability in an effective manner (Soyer, 2014).
Conclusion
Based on the above discussion, it is identified that the overall structure of the oil and gas industry has been changed dramatically after the year 1980’s. In this regard, more specifically it can be argued that most of the emerging countries governments have incorporated legal aspects along with technical and commercial aspects, which as assisted the global oil and gas manufacturers to enhance its operational efficiency along with enhancing the ability of facing challenges. Moreover, legal aspects have also helped global oil and gas manufacturers to enhance negotiation efficiency during the international trade operations. Additionally it can be argued that adequate legal aspects can improve future prosperity of the global oil and gas organisations.
Reference List
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.
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