ALBERT

Description: Energy security remains a vital issue for the European Union (EU), even more so in the wake of the events that unfolded in early 2014 in Ukraine. The EU’s already fragile position in the international energy arena in terms of security of supply appears to be more uncertain than ever after its umpteenth fallout with its historic energy supplier, Russia. This situation is untenable and calls for swift and decisive action to adequately tackle the issue once and for all. The article looks at the creation of a single EU energy market through integration of energy networks in the EU. It then examines various ways to diversify the EU’s energy supply, whether through increasing the import of liquefied natural gas, through its relations with the Eurasian Union, the promotion of renewable energy or the construction of alternative pipelines and energy routes. The article then offers an analysis of the latest developments of the Energy Charter Conference. The article concludes that from energy transit, to technology transfer, to investment protection, energy and trade present interplays across various fields. Improvements can be made to the EU trading system to ensure greater energy security and more efficient energy markets.

Description: Despite the Egyptian authorities’ great hopes for the fledging shale gas industry in Egypt, it appears that it could be difficult for Egypt to realize these lofty ambitions, at least in the near future. The Egyptian shale gas industry faces technical challenges as well as a critical lack of detailed regulations regarding the exploration for and the production of shale gas. There is also a lack of guidance over the manner in which foreign investments can be made in the industry.

Description: The demand for thermal coal has risen dramatically over the past 20 years, driven by an emerging markets-led commodities super cycle, which has recently come to an end. Today, thermal coal generates over 40 per cent of global electricity and is available in large quantities in countries such as China, India and the USA. Thermal coal is also the primary contributor to CO 2 emissions, a substantial driver of climate change. This has resulted in material tension for ‘sustainable and responsible’ institutional investors and strategic challenges for certain state-owned companies. Deciding upon the electricity generation technology in which to invest poses a significant dilemma. Thermal coal is abundant and by far the cheapest when externalities are not internalized. Electric renewables currently suffer from intermittency, viable storage solutions and are not very scalable. While cleaner than thermal coal, natural gas is abundant yet often needs to be imported and is more expensive than thermal coal. Although safe, scalable and clean from an emissions perspective, ‘new’ nuclear energy suffers from perception problems. The mixed method inductive methodology was used to determine the extent to which thermal coal remains investable over the next 20 years and has led to two divergent yet plausible scenarios impacting thermal coal investability. In assessing the investability of thermal coal across four chief stakeholders and geographies, a multifaceted interpretation of the term ‘investability’ is developed, which recognizes disparate financial and non-financial investment drivers. The research shows that thermal coal remains investable by a variety of stakeholders, particularly in the Transformative scenario, but their reasons for investing differ materially both by geography and the type of stakeholder. Finally, the key drivers for both scenarios are identified that can be monitored and used as an early warning system to inform investment decisions.

Description: In March of 2015 New Zealand’s Court of Appeal brought to a conclusion a long running dispute between the joint venture partners in the Pohokura gas and condensate field located in Taranaki, New Zealand. Todd Pohokura v. Shell Exploration NZ Limited et ano deals with the rights to production and offtake arising under the Association of International Petroleum Negotiator’s (AIPN) 1995 Model Form joint operating agreement (JOA), the powers of the Operating Committee in regards thereto and the practical implications of entering into a field development without documenting all the necessary gas sale and transportation arrangements in advance. The factual matrix provides an opportunity to review the principles of common law relevant to production and offtake, including the development of those principles from early English common law into U.S. domestic law, and how those principles have been reflected in model form JOAs on both sides of the Atlantic, including the AIPN forms and ultimately the Pohokura JOA. The analysis confirms the New Zealand courts’ rulings upholding the power of the Operating Committee to determine production rates under the AIPN Model form. However, it concludes that gas offtake arrangements that amend or add to the rights and obligations of the parties under the JOA must be agreed unanimously and are not within the jurisdiction of the Operating Committee to determine.

Description: Pursuant to a generous Association of International Petroleum Negotiator (AIPN) 2014 Summer Research Award, this article identifies, evaluates and compares the legal and fiscal rules, regulations and incentives necessary for countries with significant shale petroleum and natural gas formations to attempt to replicate the boom that is ongoing in the USA. As others have pointed out, 1 several legal, tax, and operational barriers can impair duplication of the US shale revolution in similarly endowed nations. This article identifies key factors responsible for the surge in US shale production, distill the fundamental forces from the US experience that are applicable to any jurisdiction, and evaluate and compare how several countries fare in this vein. The report also identifies avenues for reform and innovative policies that could be applied in other jurisdictions.

Description: Texas law has only recently codified in precedential decisions a reasonable formula for production allocations for horizontal, including fracked, wells. The ancient regime of the Rule of Capture does not generally apply, because of the nature of the geologic deposits and the new technology. This reasonable formula is applicable in the international arena for cross-border deposits and production blocks. Other national law and international treaties provide scant guidance in these matters and governments, national oil companies and international oil companies should review this formula to aid in negotiations for fair and equitable allocations that should preclude unnecessary disputes and litigation.

Description: Oil and gas fields that straddle a domestic licence boundary or a delimited international border are often unitized so that they can be developed efficiently and effectively as a single entity. The unitization process is usually governed by a pre-unit agreement and a unitization and unit operating agreement. Provision for expert determination in these agreements should include a decision on the basis for tract participation, the determination of initial tract participation around the time of unitization, the formulation of key elements of prescribed technical procedures for any redetermination of tract participation, the redetermination of tract participation post-production, and the enlargement or reduction of the unit area and/or unit interval. The agreements must also define the key issues of how an appointed expert is to arrive at a decision. Expert determination is generally preferred to pendulum decision-making, an expert should carry out an integrated study with a single deliverable as opposed to one that is subdivided into discrete incremental steps, and the expert should table an initial decision for technical and procedural scrutiny by the parties before delivering a final binding decision. Experience has shown that adherence to these principles of prescription facilitates expert engagement during subsequent field life and thereby promotes Pareto-efficiency, fairness and equitability.

Description: Renewable energy provides an answer to the most pressing socio-economic challenges governments face today, in particular the effects of climate change. Although efforts have been made throughout the world, it is necessary that investment in renewable energy is further increased if it is to have a marked impact on the reduction of carbon dioxide (CO 2 ). The lack of national investment is inevitably going to trigger the inflow of foreign investment which may be subject to performance requirements which are regulated by a number of economic treaties. The Article reviews all the norms currently applicable and stresses their differences to provide a typology of existing prohibition. The analysis is further refined by a comprehensive review of the case law (both decided by trade and investment tribunals) to identify the type of requirements which have been implemented on renewable energies. It also explains and anticipates the role of the most favoured national treatment in the context of bilateral treaties in a manner hitherto unexplored. In doing so, this Article provides a comprehensive analysis of the performance requirements in international treaties with a view to assessing their impact on the further development of renewable energies.

Description: This brief contains an update of the current situation of upstream petroleum investment in Thailand. It is a critical appraisal of the ongoing reformation of the new Petroleum Act, which intends to adopt all three types of upstream contract, namely, concession, production sharing and service contracts, to govern the contractual relationship between Thailand and upstream investors.

Description: Local-content legislation and policies in oil and gas producing countries have become a key priority of host governments and industry players alike. Increasingly, more resource-rich developing countries are enacting local-content legislation as a means of maximizing the benefits to be gained from their petroleum industries. However, these laws and policies are being implemented with insufficient research into their efficacy, and as a result have often yielded mixed results. This article assesses the effect of local-content legislation and policies in the oil and gas industry presenting insights on the challenges faced by industry players with regard to their implementation. We trace the channels through which local-content legislation advances value creation by evaluating different implementation programmes, using clearly stated local-content targets to measure their efficacy. Nigeria, Ghana, Brazil and Norway are chosen as case study countries to highlight the diversity of local-content strategies for countries at different developmental stages. The motivation for this research is to provide host governments, investors and domestic suppliers with guidelines on how to successfully develop and implement local-content regulations and strategies. The experience of the case study countries above show that the success or otherwise of local-content legislation and policies remains a function of a country’s institutional setting and developmental paradigm. Based on the review of the case studies, we summarize that successful local-content legislation and policies should be anchored on the following principles: (i) local-content policies need to look beyond simple generation of economic rents to focus on the development of linkages; (ii) the tools developed to measure agreed local-content benchmarks must be clearly defined to the acceptance of all industry players; and (iii) entrenching local content depends on the availability of an industrial-supply base that can act as growth levers.

Description: This article demonstrates how the oil regulatory framework enacted in Brazil in 2010 will have detrimental effects on technology and innovation. The shortcomings essentially derive from three of its aspects: (i) operational exclusivity; (ii) the governance structure of the operational committee; and (iii) local content policies which lack adequate focus and strategic planning. All these elements actually stem from an excessively intrusive regulatory approach, within a typical top-down model, disproportionately reliant on command and control procedures. The current regulations will lead to significant drawbacks in technology and innovation in Brazil that will inevitably affect Petrobras. Even worse, however, they will not guarantee the development of a dynamic and sustainable industry of suppliers. Instead of using Petrobras to propel its industry of providers towards higher technological standards, suppliers will be dragging the national oil company downwards at the expense of the whole sector. A less intrusive regulatory framework, based on reflexive and responsive regulations is more suitable in this context, since it induces agents to continuously interact in a favourable way for the intended outcomes, instead of imposing norms and rules on them that most probably lead to other undesirable consequences.

Description: Sellers and buyers of political risk insurance (PRI) ask a simple question about a claimed indirect expropriation: ‘Is it covered by the PRI policy?’ The answer is far from simple. This article investigates only one PRI coverage—compensation for indirect expropriatory conduct. Numerous definitional issues and uncertainties exist. Investors in energy projects and PRI insurance providers will therefore both benefit from direct and clear discussions about the scope of indirect expropriation cover under a PRI policy before the policy is purchased.

Description: A number of recent governmental actions have impacted energy companies' abilities to perform under contracts relating to the extraction and export of natural resources in countries such as Russia, Iraq, and Libya. What steps can a company take to protect itself when relations between oil-rich countries and the West deteriorate? Should a company continue performing under its contract at the risk of violating economic sanctions or should it refrain from performing and risk contractual liability? While tempting to assume that the relevant contract's force majeure provision will provide sufficient protection, force majeure is not a magic talisman that can always be invoked to avoid contractual obligations that have become too difficult to perform. This article analyzes relevant case law and model clauses published by the Association of International Petroleum Negotiators and the International Chamber of Commerce to provide practical guidance on force majeure situations resulting from government action and civil unrest.

Description: When the Master Deed was conceived one of its core objectives was to expedite and simplify the United Kingdom Continental Shelf (UKCS) asset transfer regime. Although the Master Deed has had some successes since its introduction in 2003, its effectiveness in reducing the time and cost of asset transfers in the UKCS has been hindered by an inconsistent application of legal principles and the overtly adversarial legal and commercial culture that prevails in the UKCS. The UKCS’s viability to continue as a profitable producing basin is currently under threat as margins are squeezed by high producing costs and low commodity prices. During such times of increased financial pressure, it is imperative that regulators react to these challenges by developing and nurturing a regulatory environment that reduces administrative obstacles associated with asset transfers encouraging greater liquidity and investment. This article argues that with the support of a proactive and collaborative regulator, which safeguards the consistent application of transfer provisions, discards outdated methodologies and fosters a more collaborative culture between UKCS participants, the UKCS transfer regime has the potential to be one of the most dynamic and user friendly regimes of its kind. Maximizing the effectiveness of the transfer regime will ensure that the UKCS remains a competitive environment to carry out oil and gas operations, elongating its producing life and increasing overall hydrocarbon recovery.

Description: Russia is posing a series of challenges to gas consumers and gas producers alike. But the effectiveness of these challenges remains a matter of considerable debate. Overall, prospective Russian actions and policies have profound implications for the development of the European gas market in general, and thus for potential US LNG exports to Europe. Moreover, underlying all this is the most worrisome question of all: do Russia’s policies and actions enable gas consumers—and indeed, some Central Asian gas producers—to regard Russia as a reliable energy partner? This article therefore addresses: Prospects for the full implementation of the Russia–China gas accords; Prospects for Turkmen gas supply to both Russia and China; Prospects for the development of both Gazprom’s Turkish Stream project and the EU-backed Southern Gas Corridor; Prospects for US LNG in Europe; The potential challenge that a change in Russian gas export policies could pose to European gas prices. The article also seeks to answer the question as to whether Russia can be considered a reliable partner, particularly in connection with long-term deliveries to Europe.

Description: Article 33 of the 1945 Constitution of Indonesia is the most basic rule that serves as the main source for every policy concerning natural resources in Indonesia. It is interesting that ever since the independence of the Republic of Indonesia, there is no official or formal interpretation with regard to that provision. This article will discuss the Indonesian Constitutional Court’s interpretation of Article 33 of the 1945 Constitution of Indonesia. Furthermore, it will discuss overlapping rules and policies, and how derivative rules are in contradiction with Article 33 of the 1945 Constitution of Indonesia. An understanding of this provision is crucial in order to understand the general principles of gas governance in Indonesia.

Description: The Extractive Industries Transparency Initiative (EITI) Standard adopted in May 2013 broke new ground by including revenues from the sale of natural resources among the revenue streams to be reported by governments. This addition is of great significance considering the economic importance of sales revenues, in particular in the case of crude oil, and the rather opaque environment in which the sale and purchase of natural resources often takes place. Transparency of sales revenues, as for fiscal revenues from upstream activities, helps empower citizens of resource-rich countries to hold their governments accountable for the wealth generated by those resources. The author argues in favour of a global adoption of the EITI regime and its further strengthening in the area of disclosure of payments by companies purchasing natural resources, including commodity traders. The experience of Iraq with EITI reporting shows how information from the government as well as companies regarding the sale of the state’s crude oil can be made available to the public. National, top-down initiatives, such as the disclosure rules in section 1504 of the Dodd-Frank Act (not implemented at the time of writing), only compel companies under national jurisdiction to disclose payments to foreign governments. Unilateral initiatives create a patchwork of inconsistent standards, inviting regulatory arbitrage. As an example, while the disclosure requirements developed in the USA also apply to payments by listed companies purchasing natural resources for exporting (oil companies, refineries, commodity traders, etc); the scope of the legislation introduced in the European Union is limited to payments for upstream activities by companies in the extractive (and forestry) industries. The resulting unbalanced playing field, in addition to compliance costs, is an issue of concern to businesses, in particular with regard to the disclosure of commercially sensitive information. These considerations inform the ongoing debate regarding the possible adoption of transparency requirements in Switzerland, a major trading hub for physical energy commodities.

Description: Investment in upstream oil and gas operations is of great importance for the exploration and development of oil and gas fields. There are diverse and varied laws and regulations regarding investment in upstream oil and gas operations. This article intends to investigate and evaluate these various laws, as well as to provide an answer to the question as to what extent these rules are able to provide a secure legal framework for foreign investment in upstream oil activities. In this article we first prove that from a legal point of view foreign investment in oil and gas upstream activities has not been very explicitly permitted. Secondly, the basic terms and conditions of upstream oil and gas contracts, through which investments can be materialized in the oil and gas sector, have not yet been touched by regulations. And thirdly, it is still unclear which body is responsible for defining these essential terms and conditions: whether it is the Council of Ministers, the Economic Council or there is no legal body at all to legalize these terms and conditions and they are left to the Ministry of Petroleum and the National Iranian Oil Company (NIOC) itself to set these terms and conditions within the broad framework of the legislation.

Description: It is often believed that investment arbitrations are filed because some form of political risk materialized, harming the investor’s interests. This is the hypothesis that the authors examine in this article, focusing on the oil and gas sector. They analyse which types of political risk, present in the host state, eventually lead oil and gas investors to file investment arbitration claims against that state. They find statistical evidence supporting the idea that bad governance and economic nationalism are indeed conducive to arbitration claims in the oil and gas sector. However, it appears that economic hardship does not have the same triggering effect.

Description: After becoming independent in 1991 Azerbaijan has signed more than 30 production sharing agreements (PSAs) with international oil companies (IOCs), attracting more than $55 billion foreign investments for the joint development and production of major oil and gas fields and with significant impact for the country and the Caucasus region at large. The focus of this article is on the PSA as the legal agreement which regulates the legal, commercial and fiscal relationship between the government of Azerbaijan and IOCs. The article is a comprehensive and systematic analysis of the existing major PSAs from its legal, commercial, fiscal and environmental perspectives. The article identifies the key legal and contractual issues in the PSA regime and proposes ways to restructure the current regime in order to meet the challenges facing the petroleum industry of Azerbaijan in the future.

Description: Mexican energy reforms open the energy sector to foreign participation via different types of contracts, some of which may qualify as investments under North American Free Trade Agreement (NAFTA) Chapter 11. Mexican NAFTA reservations exclude some Mexican regulation from the scope of application of specific obligations in Chapter 11, such as those regarding performance requirements, most-favoured-nation treatment, and national treatment. However, Mexico’s legislative restrictions on foreign investors’ right to pursue investor–state arbitration are not covered by its NAFTA reservations and should not affect access to NAFTA Chapter 11 dispute settlement. Those restrictions are inconsistent with NAFTA Chapter 11 and Mexico cannot invoke its domestic laws to justify a violation of its international obligations. Moreover, Mexico’s reservations do not prevent the application of obligations regarding fair and equitable treatment and expropriation.

Description: Most states of the Gulf of Guinea have discovered significant offshore petroleum resources. The discoveries come at time when petro-states of the Gulf of Guinea do not have adequate regulation or capacity to manage the environmental consequences of offshore petroleum development, and at a time that the international community is yet to agree on any global offshore petroleum regulatory framework. The article, therefore, suggests that it is in the interest of petro-states of the Gulf of Guinea to protect the Gulf of Guinea by negotiating a protocol under the Abidjan Convention to regulate offshore petroleum development despite international disagreement as to the need for global offshore petroleum regulation.

Description: The Organization of Petroleum Exporting Countries (OPEC) was established in 1960, and Indonesia became the seventh country to join in 1962. However, Indonesia suspended her membership for seven years from January 2009, and has just rejoined in January of this year. During her initial 27-year tenure, Indonesia’s representatives held the position of Secretary General four times, for a total of 10 years. This article will give a brief historical overview of OPEC, as well as that of Indonesia’s oil and gas sector and her relationship with OPEC.

Description: The European Union (EU) has a recognized international legal personality and it has signed the Energy Charter Treaty (ECT) as a Regional Economic Integration Organization (REIO). As a result, the ECT, the EU and national legislation together establish different regulatory layers governing energy markets. Although those layers are in principle complementary, rules adopted in different periods and frameworks may cause inconsistencies in their implementation. The arbitral tribunal award on 21 January 2016 in the case Charanne and Construction v Spain , is only the latest illustration of the uneasy boundaries between the EU and ECT. This article will look into some of the dynamics and tensions between the EU internal energy market and policy and the ECT in the areas of transit, long-term contracts, renewable energy and external relations. The review of selected measures and case law will reveal the existence of tensions at regional and international levels and the way they are addressed to simultaneously accommodate regional and international legal orders. This article will help to understand what kind of interactions are happening today between the EU and the ECT legal systems and will offer a particular view to explain and approach those relations.

Description: To date there have been limited attempts by energy law scholars to ensure that their research impacts upon legal practice and in particular upon the decision-making of judges. One of the aims of this article is to address this issue and call for the need of energy law scholars to re-engage with what their sub-discipline of law is and also to provide new scholarship that can bridge the gap between academics and professionals in energy law. This article aims to begin a wider movement across the energy law field of scholars with the aim of initiating and advancing the aim and direction of energy law. A central aim of this article is to begin a debate on whether a paradigm shift is needed in energy law. As part of this new initiative, three theoretical frameworks are advanced and these are as follows: (i) The Energy Law and Policy Triangle; (ii) The Theory of Change in Energy Law; and (iii) The Power of Energy Law: Targeted Legislation. These theories outlined in this article aim to highlight some of what scholars and practitioners should focus on, and present them with thinking-tools or theories of how to do so. In order to finalize the emergence of energy law as its own sub-discipline of law it needs its own theory to evolve and grow as other sub-disciplines of law do both in theory and in practice.

Description: This article reviews the law applicable to boundary determinations and observes that this legal framework does not provide sufficient guidance for parties involved in development of subsoil or subsea resources that may straddle an undefined or contested boundary. Examples of how states and private parties have attempted to cope with this uncertainty are discussed. The authors propose that a duty of good faith applies to prevent the existence of legal uncertainty in such situations from being exploited to prohibit resource exploration. They finally discuss briefly how some parties seek to address these risks contractually.

Description: At their core, natural gas and LNG price review claims focus on evaluating whether or not the applicable contract sales price aligns with the various benchmarks specified in the underlying contract. While price review clauses are drafted in different ways, the common premise is a simple one. Its application, however, is mired in nuance and potential pitfalls. In this article, we consider the commercial bargain underlying price review rights with an eye to understanding the context within which the text of any price review clause should be considered. We examine some of the key issues to be considered in evaluating the market benchmarks referenced in these clauses and some of the complexities associated with quantifying market value by reference to these benchmarks. Ultimately, many factors must be considered and reconciled in the context of a price review claim. For the lawyers involved in these cases, it is critical to understand both aspects separately and in tandem to arrive at a coherent and comprehensive analytical framework.

Description: Energy contracts have long been vexed by questions about the role of gap filling by arbitrators and judges, along with the effect of changed circumstance on the parties’ obligations. Each challenge continues to resist facile analysis as differing legal standards interact with subtleties of contract language and factual matrixes. In the face of these challenges, arbitrators must seek a delicate equilibrium between legitimate respect for bargains and an equally legitimate recognition of expectations that genuine gaps be filled and dramatically changed circumstances receive appropriate consideration. In aiming for counterpoise, common sense normally pays greater dividends than ideology or dogmatism.

Description: The importance of substantial and sustained investment in the energy sector cannot be overstated. The protections offered to private investors through the global network of bilateral investment treaties (BITs), including investor-state dispute settlement (ISDS) are particularly significant for the energy sector. However, the ISDS system that has been so significant in encouraging investment is under attack. An intense and public debate is on foot. This article highlights the ways in which the investment treaty system and ISDS are developing to achieve an appropriate balance between private rights and public interests, particularly given recent developments in sustainable development, responding to climate change, and the promotion and protection of human rights. The article surveys reactive developments in substantive standards of protection under BITs, as well as the ways in which the existing system is capable of self-calibration to respond to public concerns, namely in respect of transparency, state counterclaims, legislative discretion, and the emergence of a new generation of BITs addressing the public/private divide. Finally, the authors consider how arbitration, including ISDS, has contributed to an equally important public interest, the growth of the rule of law around the world. The authors conclude that while a range of improvements to the investment treaty system can and should be considered, the system as a whole and ISDS are vital components of the energy industry, integral to our future energy security and key contributors to global stability through their promotion of the rule of law.

Description: From the 1920s to the 1960s, seven major International Oil Companies (IOCs) were almost the only market players in the global petroleum industry. Their share of oil and gas reserves, however, fell dramatically from about 85 per cent in 1970 to less than 10 per cent today. Changes in the competitive dynamics of the upstream petroleum industry are, however, less studied areas in the literature. In this article, we conduct a review of previous studies to answer the question: Is the traditional business model of IOCs still valid? We propose a theoretical framework and give a historical account of IOCs erosion and Global National Oil Companies (GNOCs) ascent to the top. Finally, we explore an array of possible future scenarios. We argue that IOCs are not in a position to regain the lost ground if they remain wedded to their traditional business model.

Description: The Russia–China deal in May 2014 opened a new page in Gazprom's efforts to orient its exports to Asia. The political logic behind the new agreement resembles the first Soviet gas export contracts with European states. However, the international gas markets favour Asia's position in general and China's in particular. Moreover, China is now having a leverage on its future liquefied natural gas suppliers. The new context makes Russian negotiating positions weaker and, moreover, Russian gas export to China might not be a subject of Gazprom monopoly any longer.

Description: Bangladesh has recently decided to build the country’s first nuclear power plant in the western region of Rooppur, despite strong public opinion against it. The Bangladeshi government argues that the project is necessary to diversify the country’s energy mix to improve electricity generation capacity. This commentary explores the Rooppur nuclear power plant project and argues that there are serious concerns about the project that should be taken into account by the Bangladeshi government and that there are other options available to diversify the energy mix. The author recommends that Bangladesh is not yet ready for nuclear power as sufficient technical and regulatory expertise and improvement of infrastructure is required before the country can go nuclear.

Description: The energy industry has been Mexico's main economic engine since the early 20th century. Booming oilfields across the Gulf of Mexico have financed government expenditures, social programmes and infrastructure for almost 80 years. Nevertheless, Mexico's once abundant reserves have been dwindling at an accelerated rate under the energy monopoly model controlled by the state. As exploration, production, processing and distribution became increasingly complex and demanded higher levels of specialization, the Mexican energy industry started to lag and fall behind due to the State's monopoly inability to efficiently reallocate and invest the necessary resources to maintain a sustainable growth. Consequently, the once almighty Mexican oil production peaked in 2004. In 2013, the Mexican government was finally able to enact the necessary constitutional and legal changes to transform the energy industry from a monopoly into a free market model where private companies, domestic and international, could invest and participate in Mexico's energy renaissance. This article will discuss the new model, focusing on upstream ventures, brought about by the Energy Reform, including the main regulatory agencies, laws, and contract schemes that are expected to attract new investors and technologies, ultimately reinvigorating Mexico's energy industry.

Description: The United Nations Secretary-General, in the 67th annual report, Oceans and the Law of the Sea , gave a preliminary statement regarding the governance policy and legal framework for marine renewable resources. The report also suggested establishing a relevant legal regime but did not provide any details. Legislative and research work have positive effects in facilitating marine renewable energy programmes. It is also a necessary precondition to create a relevant legal governance regime, in order to establish a concrete marine renewable energy programme. This article examines international legal duties and obligations in relation to the exploration of marine renewable energy. It also examines state practice in the USA, the UK and Canada.

Description: Central Asia is strategically located at the crossroads of many natural gas production and consumption regions. Historically isolated because of lack of infrastructure and Soviet control, multiple projects are being proposed to transport gas from the rich reserves found in the Caspian Basin both eastward and westward. Littoral nations on the shore of the Caspian Sea are in a time of significant energy growth as the European Union has sought to eliminate reliance on Russian gas supply. The Trans-Caspian Pipeline (TCP) is one of these proposed projects. It would transport gas from Turkmenistan to Azerbaijan through the seabed of the Caspian Sea from which it could be transported on to Europe, eliminating Russia from the transport process. In this article, we will look at the background of the pipeline’s proposal, setbacks arising, and how the construction would affect each of the five littoral nations.

Description: This article analyses how the progressive globalization of the natural gas market has shaped Liquefied Natural Gas (LNG) arbitration disputes over the past two decades. It concludes that globalization has had differing impacts on two categories of LNG arbitration disputes.

Description: New hydrocarbon frontiers open for various reasons, including technological advances and beneficial economic conditions. In this article, the authors focus on countries opening for business because of political changes and how foreign entrants can best manage investment risk in these countries. Investing in frontier markets may be challenging for a number of reasons, however, the prize for overcoming these challenges can be significant. In the current low oil price environment, risk tolerant investors may see a perfect buying opportunity in promising frontiers. The authors provide an overview of ten key issues (such as political risk and local law risk) that, regardless of the oil price, investors should consider before bidding for oil and gas assets in frontier markets and advise on effective mitigation strategies.

Description: This article examines the potential for shale gas production in Mexico following the recent constitutional reforms. Since the secondary legislation to the Mexican Energy Reform Law was passed, opening the country’s electricity and hydrocarbon sectors to private participation for the first time in over 75 years, participants in the energy industry have turned their attention to Mexico. Thus far in the bidding process for government contracts, Mexico’s deepwater, shallow-water and heavy oil resources have generated the greatest interest from private entities. The returns from these contracts, however, may literally pave the way for large-scale shale gas production in Mexico by providing the private capital necessary for the expansion of gas pipeline infrastructure. This report will address a brief history and the development of Mexican policies and interests, modern Mexican energy policy, shale gas opportunities in Mexico, growing gas demand in Mexico and abroad and obstacles to industry development. This information will be used to analyse the real potential for shale gas production in Mexico and its implications for the country’s future.

Description: On 25 February 2015, the European Commission published a Communication on its vision of an Energy Union as, amongst other things ‘an integrated continent wide energy system where energy flows freely across borders based on competition and the best possible use of resources and with effective regulation of energy markets at EU level where necessary’. The Communication listed the actions necessary to deliver this Energy Union in a list which was as interesting for what was not included as for what was. While full implementation and enforcement of existing energy and related law (and particularly the third energy package) was listed as the first priority of the Union, there was no mention of the need for further market unbundling or a fourth energy package. This position is worrying. Through an inadequate implementation of poorly designed market structures, the EU has created national markets which are hotbeds for consumer-damaging market manipulation and abuse. Consequently, there is a pressing need for further market unbundling and a fourth energy package. Not only will such measures be essential to the successful creation of an Energy Union and the realization of the benefits expected from market liberalization, they are urgently needed to remove existing market structures, which are facilitating consumer-damaging anticompetitive behaviours by making such behaviours virtually impossible to detect and punish.

Description: LNG in Canada stands at an important inflection point. On the one hand, the next few years could witness affirmative final investment decisions by a strong number of the proponents of Canadian LNG projects and Canada could become an important player on the global LNG stage. On the other hand, regulatory and cost uncertainty, coupled with unfavourable market conditions and economics, could combine to put a chill on Canada’s nascent LNG industry, stunting all or most projects. Given the significance of this crossroads, this article examines the history and modern characteristics of the LNG industry to illuminate the context in which Canadian LNG final investment decisions, whether positive or negative, are being made. In particular, this article examines the different project structures or ‘economic models’ LNG projects may adopt, as well how these models can impact the value chain and myriad of related contractual arrangements that coalesce to transport natural gas from upstream reservoirs across oceans to downstream consumers. Attention also shifts regularly to the specifics of the Canadian stage in the hope of drawing insightful comparisons and contrasts between the budding Canadian LNG industry and its international counterparts. For those interested in learning more about the Canadian LNG industry or the international LNG industry in general, this article serves as a comprehensive, albeit high-level, introduction from a Canadian perspective. For those with LNG experience in other jurisdictions, this article serves as a refresher complimented with considerations endemic to Canada’s LNG industry. What will hopefully also be apparent to both groups of readers is that proponents of Canadian LNG projects are navigating diverse sets of circumstances the responses to which are often proving as instructive as they are interesting.

Description: While a case-by-case method for the determination of indirect expropriation is a practical method and is somehow the governing method given the inconsistency in arbitral practice, it is argued whether an attempt to set out a clear, consistent and appropriate method must be encouraged by tribunals. Jan Paulsson (and before him G C Christie) correctly emphasize that there is no ‘magical formula’ or "particular analysis" that can be applied at all times or in all circumstances, but a question arises as to whether there must be a general basis or common method that sets out the minimal requirements of indirect expropriation. Putting to one-side cases which deal with non-discriminatory regulation for public welfare objectives, a number of questions have become critical to the finding of indirect expropriation in light of the recent case law.

Description: Arbitration is the most widely used dispute resolution method in the energy sector. A major advantage of arbitration is that it allows parties to select the persons who will settle the dispute—the arbitrators. However, finding meaningful information on the level of expertise of potential arbitrators is not easy. There are serious information asymmetries that prevent the market for arbitrator services from being fully competitive and impair parties’ ability to make wholly informed decisions. Because most parties and their counsels are not familiar with the market for arbitrators, they tend to rely on personal enquiries and generic or specific directories of arbitrators. The choice of a suitable arbitrator is critical, not merely from the parties’ point of view but also to ensure the efficiency and legitimacy of the overall system of dispute resolution. Arbitrators should be able to balance a variety of diverse interests that frequently go beyond the strict concerns of the disputing parties. This article argues that lists of energy arbitrators should be improved so as to allow interested parties to consult prior awards rendered by potential arbitrators and the feedback provided by previous users of their services. This would allow parties to conduct a more efficient screening of potential candidates, hopefully contributing to make the process of identification of expert energy arbitrators easier and cheaper.

Description: The Energy Charter Treaty is an important multilateral treaty for promoting international energy cooperation. Sustainable development is one of its purposes. The investment regulations of the Treaty have emphasized protecting the investors’ interests, which has potentially both positive and negative influence on sustainable development. To achieve the aim of sustainable development and to attract more countries’ participation in the Treaty, the Treaty should increase its transparency and give differential treatment to developing countries. This article seeks to analyse these concerns and offer some wider conclusions regarding the particular improvement which can be carried out to increase the level of investment protection, while maximizing sustainable development simultaneously.

Description: As global climate change and its adverse effects have caused serious consequences, the Chinese Government is speeding up on energy saving and emissions reductions, becoming much more active on the climate and environment front. According to the work schedule of the Ministry of Finance, construction of the environmental protection tax system is one essential part of the forthcoming green tax reform in China. On 10 June 2015, the Cabinet’s Legislative Affairs Office issued a Draft Environmental Protection Tax Law of the People’s Republic of China (hereinafter referred to as the ‘Draft EPT Law’) to solicit opinions and comments. This action received much attention and prompted discussion both at home and abroad. The Draft EPT Law shows the trend of transforming pollution charges into tax, and starts a green reform in administrative management by means of financial tools. Though the law does not include carbon dioxide with taxable pollutants, it leaves space for future carbon taxation. With the increase of green reform in the future, carbon tax will no doubt be put on the priority list of the Chinese Government, at which point the Government will face three major challenges. First, the current unsatisfactory tax system environment will jeopardize carbon tax. It is necessary to repeal the overlaps between the Draft EPT Law and carbon tax, other energy taxes and non-environmental taxes, and introduce carbon tax into the current tax system without throwing off the order of the overall tax structure. Secondly, in spite of the design of the new tax structure, the administrative organization of tax management remains a very critical problem. It will be necessary to establish an orderly interactive relationship horizontally between the environmental agency and tax agency, and vertically between the central and the local authorities. Thirdly, a new carbon tax will cause economic slowdown in the short term. In addition to offering tax rebates, reductions and subsidies, a system of penalties could offset negative effects and optimize positive outcomes of emission reduction.

Description: At present, the issue of bilateral investment treaties (BIT) is gaining more and more importance worldwide, because of various projects requiring effective financial flow, being globally initiated. This article tries to analyse the particularities of the BITs between China and Canada (China–Canada BIT), as well as between the European Union (EU) and Canada (investment chapter of the Comprehensive Economic and Trade Agreement, CETA) to locate and emphasize some of the basic features applicable for a future investment protection oriented agreement involving China and the EU. Furthermore, the scope of United Nations Conference on Trade and Development (UNCTAD)’s Investment Policy Framework for Sustainable Development (IPFSD) broadens the view on International Investment Agreements in general, helping the assessment of their provisions from a sustainability aspect. The article also covers some of the areas of dispute settlement, its main goal being to make complex suggestions to the constantly forming international investment policy of China, potentially contributing to the pressurization of sustainable development.

Description: The Leviathan natural gas field has become a significant energy source for surrounding states in the eastern Mediterranean such as Lebanon, Cyprus, Syria, Israel, Jordan and Turkey. Tensions in the particular area cause this resource to be exploited on a low efficiency level both when it comes to utilization and organized cooperation between states helping their economies to benefit from the trade in this natural resource. This article analyses the current tendencies towards the expansion of the regulatory frameworks already functional in Mediterranean states west of the Levantine basin and simultaneously aims to give an assessment of these efforts. The main goal is to thoroughly evaluate the appropriateness of the existing cooperative methods and legal solutions regarding energy trade on an open market between developed states for countries with different political interests in a highly unstable area of constant sociological and political turbulence.

Description: The essential thesis of this article is that, as corporate and project finance trends continue in nuclear power plant financing, resulting in diversified and much broader and more complex structures of foreign investment, international investment law will become increasingly relevant to and influential upon these transactions. This in turn will spawn a new wave of disputes based in international investment law claims, before international arbitral tribunals including the ICSID. After discussing the 2011 Fukushima nuclear disaster, and the first international investment law case directly related to an investment in a nuclear power plant, the article begins by describing recent trends in the financing of nuclear power plants. These trends include a shift from almost exclusively sovereign-assumed financing cost and risk, to other financing models which increasingly access global capital markets, and spread risk among a larger and more diverse set of investors. It then proceeds to review and consider the international legal sources addressing nuclear energy development and related international trade and investment transactions, focusing on the sources of international investment law. It considers both the primary ways in which the current trends in nuclear power plant financing are making international investment law increasingly relevant to nuclear-power-plant-related investments, as well as the secondary effect this increasing relevance will likely have upon future structuring of financing arrangements for new nuclear power plants. The article provides detailed consideration of the application of international investment law to foreign investments in nuclear power plants, including areas in which host states of such investments are most likely to experience increased exposure to liability due to current financing trends. It concludes with a further consideration of the secondary effects caused by this increased host state exposure to liability, including effects on future structuring of financing arrangements for new nuclear power plants, and effects on (re)negotiations of international investment law instruments between actual or potential host states, and states that are actual or potential home states of nuclear vendors and investors.

Description: Shale gas developments in the USA have led to a hype about the energy security prospects for other world regions, eager to replicate the American success story. In Europe, shale gas developments have remained in their infancy. As we argue in this piece, it is likely that this situation will continue and the shale gas ‘revolution’ is one that remains restricted. We compare shale gas technology to solar and nuclear, each at the time coined a game changer for energy security, and hyped as key to a sustainable energy future. We argue that shale gas perceived as an unproven and risky technology, fails to surpass essential policy, industry and social barriers required for a new energy technology innovation to succeed.

Description: Liberia has huge potential to be an oil-producing nation in the near future. With an increasing number of hydrocarbon discoveries in West Africa over the past few years and oil discovery in February 2012 in the Narina well offshore Liberia by African Petroleum, interest in Liberia and West Africa should only accelerate. Indeed, major oil and gas companies such as Chevron, Tullow, Repsol, Anadarko and ENI already hold acreage in Liberia, and ExxonMobil recently acquired an interest. This article looks at a new model of Production Sharing Contract, which was developed as part of a recent transaction whereby Canadian Overseas Petroleum (Bermuda) Limited (COPLB) and ExxonMobil Exploration and Production Liberia Limited (ExxonMobil Liberia) acquired 20 per cent and 80 per cent, respectively, of Liberia Offshore Block LB-13 (Block LB-13). This article examines certain key features of the Production Sharing Contract entered into as part of the above transaction and how the issues addressed in this Production Sharing Contract might be applied to other emerging oil nations in West Africa.

Description: The Brazilian regulatory framework for petroleum exploration and production activities was significantly altered after the discovery of pre-salt province. In addition to Act No. 9.478, of 6 August 1997, four new Laws were launched since 2010, creating a new oil company—Pre-Sal Petroleo S.A. (PPSA)—and establishing two other types of international petroleum agreement—production sharing contract (PSC) and onerous assignment agreement. This article aims to explain the new rules launched, and also assess the role of the agents involved and their competences. Present article will also analyse the three petroleum agreements provided by Brazilian Law: concession agreements, onerous assignment and PSC.

Description: James Baily and Rachel Lidgate consider current issues arising in relation to LNG price reviews, set against the historical background to such disputes and the recent, unprecedented volatility seen in gas markets.

Description: A lawyer’s perspective on the history of what has become the largest integrated oil and gas company in the world, the challenges faced by Saudi Aramco as the national oil company of the Kingdom of Saudi Arabia and its response to those challenges.

Description: During the week of 9 December 2013 Mexico’s Congress officially launched Mexico’s long awaited, heavily debated, and much talked about Energy Sector Reform. Indeed, in less than 10 days Mexico’s Congress and States passed the Energy Reform and rendered the Energy Reform a reality. After Congressional and State approval, the Reform was then signed into law by President Peña Nieto. The Law also published in the Federal Official Gazette on 20 December 2013.

Description: ‘It’s Scotland’s oil.’ This Scottish National Party (SNP) electoral slogan encapsulates the importance of oil in the debate on Scotland’s constitutional future. In contrast therefore, the decision by the SNP-led Scottish Government in 2013 to apparently give up a claim to around 6,000 square miles of territory in the North Sea, encompassing several oilfields, is puzzling. This article contends that any dispute over North Sea boundaries would have resulted in unwelcome legal and diplomatic uncertainties for a putative independent State. The Scottish Government therefore may have taken the pragmatic decision to sacrifice this portion of its territory in favour of stability and certainty.

Description: Legal English is inevitably different to the ordinary use of language but this does not excuse the use of language which is verbose, obscure, repetitive or incorrect. Happily there is a growing trend toward the use of legal language which is plain and intelligible. In this transcript of his recent talk, Lord Justice Lewison considers the evidence for that trend, and also considers the way in which the English Courts have recently approached the interpretation of contracts.

Description: The US ‘shale gas revolution’ has triggered a worldwide search for unconventional gas in different forms on other continents. Asia’s growing demand for energy and need to switch from coal to natural gas has made governments in this region determined to exploit these newly accessible resources, inspired by the US experience. However, in addition to geological differences, the above-ground conditions in Asian countries are quite different from those in the USA. The papers in this Special Issue analyse the investment frameworks and the consequent outlook for unconventional gas production in China, Indonesia and Vietnam. Our paper sets the context for these accounts by identifying some relevant insights from the experience of the USA and summarizes some of the key conclusions from the later papers. A number of common themes emerge from the case studies, for example: the limited capacity of government, the role of the national oil companies and other interested economic actors, complex approval procedures, poor coordination between different government agencies and between different levels of government, access to land, and inadequate infrastructure, as well as the inappropriate nature of the prevailing laws, regulations and contracts designed for the extraction of conventional hydrocarbons. Despite these commonalities, the specific nature of each potential constraint and their relative importance varies between each country and even across an individual country. One challenge arising from the nature of unconventional gas extraction that is common to all countries is the need for effective engagement with society.

Description: China has huge unconventional gas resources and the largest is coal bed methane (CBM). Initial appraisal of CBM resources commenced in the 1990s, the first production sharing contract was signed in 1998 and first commercial production was in 2006. Eight years later, production has only reached 3 Bcm far lower than forecast despite PetroChina and CNOOC championing the development of these resources. Progress has been slow but better technology is being introduced, many of the issues that have delayed development over the last 25 years have been resolved and the government is prepared to offer further incentives to make the sector more attractive and speed up development. CBM production of 16 Bcm by 2015 remains most unlikely, but more projects are getting close to commercial production so we should see steady rather than spectacular growth over the course of the decade.

Description: This article examines the progress made towards achieving material commercial coal bed methane (CBM) production in Indonesia during the period since the publication in 2010 of ‘Coal Bed Methane Development in Indonesia: Golden Opportunity or Impossible Dream?’ (2010 Paper; P Godfrey, Tan Ee and T Hewitt, ‘Coal Bed Methane Development in Indonesia: Golden Opportunity or Impossible Dream?’ (2010) 28(2) JERL 233–64) by the Journal of Energy and Natural Resources Law. Although blessed by favourable geology, and despite some quite extensive exploration activities, Indonesia has not yet seen CBM become a significant contributor to its energy supply mix. This is the case both in relation to domestic gas demand and in terms of contribution to spare capacity in liquefied natural gas export facilities. The Government of Indonesia has continued to use the production sharing contract (PSC) as the centrepiece of its regulation of the CBM sector. Except for the issue of a newish regulation on bidding for unconventional gas acreage, the regulatory regime pertaining to CBM exploration and production (E&P) has remained basically unchanged since 2010. Generally speaking, bureaucratic inertia at central and local levels of Government continues to be an unfortunate characteristic of the administration of the sector. However, at the same time, a lack of suitable specialized drilling equipment together with a lack of commitment by some CBM operators has also played a significant part in disappointing progress overall.

Description: Conventional gas is a key energy source for Vietnam but it may not be sufficient to meet growing demand in the future. Unconventional gas could potentially be part of the solution to meet the shortfall. This article examines Vietnam’s institutional and regulatory context to identify key constraints for the development of unconventional gas. Key players from the Communist Party of Vietnam to the Government agencies and local communities will be analysed to understand their roles and interaction. Other major issues such as gas sales price negotiations, access to land, environmental protection and the model form for petroleum contracts will be also discussed. The article concludes that Vietnam is at the early stage of unconventional gas development and therefore more work and effort are required to bring about adequate human and technical capacities, as well as institutional and regulatory infrastructures to deal with the new resource.

Description: The Chinese authorities have great hopes for the fledgling shale gas industry in China. However, while China is widely acknowledged to have abundant shale gas reserves, it would likely be difficult for China to realize these lofty ambitions, at least in the near future. China has issued encouraging policy statements to support the shale gas industry, as well as announced a number of discrete financial incentives. However, its shale gas industry faces technical challenges as well as a critical lack of detailed regulations regarding the exploration for and the production of shale gas in China. There is also a lack of guidance over the manner in which foreign investments can be made in the Chinese shale gas industry; significantly, the tussle between the ‘production sharing contract’ model and the ‘joint venture model’ still remains to be resolved. There are steps that China can take to address the hitherto lost opportunities to realize its exciting shale gas potential, the most important of which is to put in place appropriate clear and detailed regulations which are administered by a clear regulatory structure.

Description: Associated petroleum gas (APG), also known as associated gas or flared gas, was for many years considered to be an ‘unwanted by-product’ of oil production. APG is the natural gas that comes from oil wells, found in association with the oil, either dissolved in the crude (dissolved gas) or separated from the oil (free gas). Unfortunately, APG flaring and venting has proven to be not only harmful to the global environment by substantially contributing to greenhouse gas (GHG) emissions and global warming, but also represents a community health hazard and deprives local populations of additional revenues and socio-economic development opportunities by the misuse of a valuable and environmentally friendly, non-renewable resource, natural gas. Currently, Kazakhstan’s legislation prohibits APG flaring and venting but the effectiveness of the Government’s efforts in achieving its APG flaring and venting reduction goals is still unclear. What form should a roadmap to virtually eliminate APG flaring and venting in Kazakhstan take? This article examines the impact of APG flaring and venting on the environment and health, the challenges, opportunities and incentives of APG utilization as well as its contribution to Kazakhstan’s economic development. While recognizing that options for dealing with APG exist, they are often limited in capacity and/or expensive to implement. The gas utilization performance of two of the three largest hydrocarbon fields in Kazakhstan (ie fields with a significant amount of oil and APG production) are discussed and a roadmap is proposed with recommendations on how to utilize associated gas and virtually eliminate further APG flaring and venting in Kazakhstan.

Description: While the regulatory and institutional reforms in the Nigerian electricity sector, as envisaged under the National Electric Power Policy 2001 and the Nigerian Electric Power Sector Reform Act 2005, appear to be on a steady path, the reforms in the petroleum industry, as envisaged under the National Oil and Gas Policy 2004 and the Petroleum Industry Bill, has remained in a mire of uncertainty, especially with regards to their conclusions and overall implementation. The effects of the uncertainty and the consequential lingering disequilibrium between the gas and electricity sectors, has critical implications for investments, infrastructure development and the overall gas supply to power outlook. The electricity sector reforms are largely dependent on the availability, affordability and reliability of domestic gas supply to over 70% of installed national power generation capacity. The regular shortages in gas supply to power electricity generation in Nigeria can be directly or indirectly linked to the regulatory inefficiency of the existing regulatory framework in domestic gas supply. Thus, while power sector assets are being privatized and liberalization is introduced in the medium to long term, it is essential to ensure that the parallel development of the appropriate regulatory framework is established for the domestic gas sector. Such a regulatory framework is required to create the required commercial environment where investments in gas supply infrastructure thrive. The aim of this article is to examine the existing and proposed laws, policies and regulations in relation to domestic gas supply in Nigeria as they affect power generation and the realization of identified economic and policy objectives.

Description: The purpose of this article is to outline the current state of the US domestic natural gas market, focusing on the regulatory climate related to exporting natural gas. Currently, companies must seek multiple levels of approval to export natural gas. Each company’s application is independently considered using a holistic and nebulous process. This article highlights differences between regulations as written and the practical effect of regulations affecting the exportation of domestic natural gas. While there is a long history of natural gas regulation in the USA, the current process remains unclear and inefficient. This article is a snapshot of the regulatory process faced by companies investing billions of dollars in the infrastructure necessary to export natural gas. The myriad organisations regulating natural gas exportation, time and politics are a few of the factors discussed that currently affect whether a company will be granted permission to export natural gas from the USA.

Description: This article looks at the conceptual framework of oil and gas unitization agreements from the standpoint of negotiators who must discuss and debate various provisions as they work to come to an agreement. It uses game theory to analyse the motivations of individuals in a rule of capture regime and the need for compulsory unitization statutes. It then uses game theory to look at the negotiation drivers in determining a mutually acceptable allocation formula. Finally, this article provides some suggestions on how to resolve the potential stalemate that may result in cooperative negotiations.

Description: This article will examine and discuss national petroleum reservations. While such reservations are a common feature of the regulatory framework for petroleum producing countries, the details will vary. A national policy will be different for each country as it will depend on a large variety of internal considerations like amount of oil and gas reserves, amount of oil and gas production, refining capacity, size of the population, infrastructure, geographic location and access to international markets, diversity on the energy matrix and so-on. The impact of such policies on international investments will vary greatly depending on questions such as triggers of the national supply obligation or the choices relating to pricing. At a more abstract and academic level, this article will discuss the difference between an ‘energy policy’ and a ‘resources policy’.

Description: The International Federation of Consulting Engineers (FIDIC) forms of construction contracts are widely used in oil and gas transactions as they are considered to give the right balance to the interests of all parties and to have a degree of complexity in line with such transactions. Yet the standardization of the relevant content may represent a serious setback and force the parties to engage in exhausting negotiations aimed at tailoring the relevant content to the actual interests of the contracting parties. This article aims at providing a general overview of FIDIC construction contracts and their use in relation to the construction of oil and gas facilities, suggesting some possible amendments that contractors may seek in order to render the agreement more adherent to their needs. The article will only focus on the Conditions of Contract for Plant & Design-Build for Electrical & Mech. Plant & for Building & Engineering Works Designed by the Contractor (the ‘Yellow Book’) and the Conditions of Contract for Engineering, Procurement and Construction (EPC) Turnkey Projects (the ‘Silver Book’), 1 both included in the collection of contracts published by FIDIC in 1999 (the ‘Rainbow Suite’ 2 ).

Description: This article assesses the legal and political nature of decision-making with regards to nuclear energy policy in Turkey. The main focus is on the choice of nuclear technology and the associated safety and liability issues for Turkey’s new nuclear development plans. The article highlights the importance of legal certainty for both safety and liability in the nuclear energy sector. In particular, the liability regime in case of a nuclear accident must be clear and transparent. It also concludes that it is not the environmental impact assessment, safety concerns or liability regime but politics that is the key determinant in the choice of nuclear technology for a new nuclear project. In addition, with the planned use of the new financial model of Build-Own-Operate, this results in legal certainty being even more important for new nuclear development in Turkey.

Description: In a February 2014 State of the Nation address, Ghana’s President John Dramani Mahama stated, ‘Corruption erodes national resources and deprives government of the capacity to invest in our people ... We will fight this battle on two fronts: Firstly, to put in place the measures to prevent corruption, and secondly, to pursue and punish corruption wherever it occurs ... We have the courage to investigate and expose corruption.’ As Ghana’s oil and gas industry grows, the topic of anti-corruption, transparency, and ethics has become even more prevalent. This is because of not only the examples from regional counterparts that have suffered the ‘resource curse’, but also because Ghana has learned its own lessons, dealing for years with other resources like gold. This article addresses the anti-corruption framework of Ghana by the components of national laws and institutions established to specifically ensure anti-corruption, transparency and ethics, and provides some recent measurements of Ghana’s related performance. The conclusion is that Ghana is in a seasonable position to successfully conduct a responsible and transparent petroleum sector that offers maximum good to all, however, enforcement of the law and political will are simply prerequisite.

Description: Offshore oil and gas production in Brazil is one of drivers of the domestic economy and is expected to grow significantly in the coming years, especially with the recent discoveries in the subsalt layer. Regulatory authorities have an important role to assure that companies continually assess and improve their procedures for operational, occupational and environmental safety. In Brazil, the National Petroleum, Natural Gas and Biofuels Agency, Brazilian Navy, Ministry of Labour and Brazilian Institute of Environment and Renewable Natural Resources oversee offshore oil and gas exploration and production. This article aims to analyse the overlap among these authorities related to offshore oil and gas exploration and production in Brazil, with focus on drilling and production activities. Mechanisms for integrated action are proposed, including a new macro safety regulation framework and the establishment of a safety commission and operational committees focused on specific activities. The data and conclusions may help Brazil and other countries in their planning or review of offshore regulations.

Description: Global demand for internationally traded oil and gas is increasing. In order to meet this increasing demand, oil and gas transportation, including by cross-border pipeline, is clearly critical. This article examines risk factors associated with cross-border oil and gas pipelines and will argue that the likelihood and consequence of risk could be greatly reduced if certain actions are taken at the international and state (policy) level and at the pipeline company level. Fifty-five cross-border pipelines (in development and operational) are examined to provide evidence for sources of risk based upon concrete case studies. The article will first explore two of the most acute geographical constraints encountered when trying to secure supplies of oil and gas: maritime ‘chokepoints' and the movement of production from landlocked countries via cross-border pipelines. These constraints reveal deficiencies in existing public international law—a key source of state-to-state risk to cross-border pipelines. The article will then examine other sources of risk (seven in total) within a comprehensive analytical framework. The various sources of risk identified are categorized as either internal (relating to enterprise risk management deficiencies in the pipeline company) or external (relating to the company's interface with host governments, commercial counterparties, local people and communities or hostile third parties) and ranked. The article further examines the dynamics of risk allocation within a government-to-government, government-to-company, company-to-commercial-counterparty and company-to-local community context. It will also examine risk factors during the two key stages of a pipeline project's life cycle (pre and post-completion). Recommendations will be offered on the development and negotiation of bespoke agreements to allocate state-to-state, state-to-company and commercial risk. Managing hostile third-party risk requires that measures are taken by public security forces in coordinattion with private (pipeline company) security and consistent with international security standards including the Voluntary Principles on Security and Human Rights. Other forms of external (community-based) risk require that pipeline companies rigorously adhere to applicable law and internal systems of enterprise risk management. At a minimum, these standards should include prevailing international environmental, safety and social standards as well as the UN Guidelines on Business and Human Rights.

Description: Brazil is one of the world’s leading petroleum province frontiers and is thus an interesting case for a close examination of the future role of the petroleum industry in the promotion of industrial development in emerging economies. A major instrument for accomplishing such industrial development is the establishment of minimum local content requirements in auctions granting exploration licences. The Brazilian National Petroleum Agency (ANP) has recently proposed changes to the country’s fiscal regime with regard to local content and unitization. These changes are aimed at harmonizing the local content requirements which would apply to two areas undergoing a unitization process. This article evaluates the possibility of making gains from the subadditivity of costs owing to unitization and how this possible windfall profit could be perceived by the ANP. The new local content methodology presented by the ANP was tested by us for a case study, which included an analysis of the process of unitizing two areas of the Brazilian pre-salt layer which were held under different fiscal regimes. Our simulation verified the potential existence of gains from cost subadditivity and demonstrated that these gains could contribute to a windfall profit tax without reducing the overall profitability of the project before unitization.

Description: The rising costs of oil products on the global market and increasing dependency on fossil fuels have become a concern for both governments and international bodies. Aside from calls to governments to move towards alternatives in the form of renewable energy, the impact of government financial support to businesses in the oil sector in the form of subsides has also come under criticism. Advocates for oil subsidy removal argue that these subsidies only divert much needed investment in development projects especially in the developing economies, to rich players in the oil sector. In January 2012, the Nigerian government therefore announced its policy to remove the subsidies attached to oil products. The announcement was received with wide public protests which the government sought to calm with a ‘Subsidy Reinvestment and Empowerment (SURE-P) programme’. This article considers the broad context of oil subsidy removal in Nigeria. It investigates the necessity behind the Nigerian government’s oil subsidy removal policy and evaluates the practical economy of oil subsidy removal in this developing and mono (oil) dependent economy.

Description: This article aims to quantify the effects of energy policy on power prices. A fundamental model is used to replicate wholesale market prices and to analyse the impact of a change in single price drivers such as coal prices or subsidies for new renewables. It is shown that approximately 50 per cent of the wholesale power price decrease in Germany of the last few years is due to market effects such as the decrease of coal and gas prices as well as the decrease in electricity demand. Only approximately 30 per cent of the price decrease can be directly associated with the subsidies for new renewable energies such as wind and solar. The first part of this article reviews the three policy objectives which guide energy strategy in Europe. In the second part two theoretic models of energy policy governance, namely the direct and multiple steering approach are introduced. Moreover, the article quantifies the impacts of the policy instruments on wholesale power prices and challenges the current energy policies. The third part briefly discusses the effect of the energy policy impact of Fukushima, before the results of the fundamental model and the market effects are analysed in the fourth chapter. The last chapter quantifies all different drivers of power prices and concludes that market effects such as coal and gas prices are at least as important as all policy effects, such as subsidizing renewables or abandoning nuclear power, combined.

Description: Renewable energy is growing worldwide in terms of generation capacity and investment inflows. However, barriers to the transition to renewable energy remain in many countries. This article analyses the barriers to renewable energy in South Africa in the context of global growth, which in 2014, saw South Africa in the top 10 of investments into renewable energy. Regulation through law has potential to address many of the barriers to renewable energy, but investors should understand the nature and extent of these barriers to guide future investment decisions into renewable energy. Law is one of the social, regulatory, and economic instruments that can be used to control and shape development. However, in South Africa the energy and environmental law and policy have not sufficiently addressed the obstacles to renewable energy technologies. Cheap fossil fuel energy led to short-term economic growth, which, in the long term, is not environmentally sustainable. While a lot has been done to enable renewable energy, challenges remain that may make it difficult for investors and foreign corporations to enter the South African renewable energy market. This article concludes that, while the context (socio-economic and political) of obstacles to renewable energy is relevant, legal and policy barriers are overriding and should be the focus of effort in order to create an enabling regulatory environment.

Description: Canada’s hydrocarbon pipeline business is heading towards decline and ultimate demise as the global combat against climate change drives action on decarbonization and energy transition, and as a result of considerations relating to national and energy security. The accelerating dynamic in the context of change in the dominating engineering paradigm means that this change will be relatively rapid, ie less than 10 years from commencement to completion. Government will need to make certain that the owners and operators of hydrocarbon pipelines have sufficient funds to cover all decommissioning and costs relating to legal liability.

Description: This article is intended to be a primer on the LNG industry and project structuring. Given the recent focus on gas and LNG as an energy source, the article first describes LNG, how the international LNG industry developed, LNG's importance and the ‘LNG chain'. Next, the article discusses how a typical LNG project is structured, the reasons why a particular structure is chosen, the critical contractual agreements utilized in these structures and some common structuring issues. Last, the article notes trends in the LNG industry of possible importance to those structuring, negotiating or documenting future LNG projects. The article was prepared based on author Philip Weems' more than 20 years experience in the LNG industry and both authors' recent participation as legal counsels to many of the LNG projects currently under development.

Description: The global energy requirement for sustaining economic activities, meeting social needs and social development is increasing daily. Environmentally friendly, 1 renewable energy resources are an alternative to the primary non-renewable energy resources, which devastate ecosystems in order to meet increasing demand. Among renewable energy sources such as hydropower, biopower, geothermal power and solar power, geothermal energy power offers distinct advantages to Turkey. There is an increasing tendency towards geothermal energy globally and the European Union has adjusted its legal regulations in this regard. As a potential EU Member state, Turkey is going through a similar process. The number of institutional and legal regulations concerning geothermal energy power has increased in recent years; technical infrastructure studies have been completed and some important steps taken in this regard. This study examines the way in which Turkey has developed support for geothermal energy power, presents a SWOT analysis of the geothermal energy power sector in Turkey and makes a projection for the concrete success expected to be accomplished in the future.

Description: The objective of this article is to promote global energy security by evaluating the existing patchwork of institutions and processes linked to the governance of the global energy economy. What we mean by ‘global energy security’ is the satisfaction of humankind’s energy needs to maintain lifestyle levels in the developed world and to promote development and improve the quality of life across the world, including least-developed and developing countries. The article focuses on the global energy economy, its fragmented governance and its implications for global energy security. Inter-State governance over the global energy economy is neither global nor cohesive. Rather, the various aspects pertinent to it—among others, economic development, climate change, trade, investment protection, finance and human security—are managed in a disparate and disjointed manner. What is more, the absence of a global energy security regime to address ‘global’—ie humankind’s collective—energy needs justifies the need to investigate the implications of the current state of play for global energy security. To do so, the article will examine all relevant institutions and processes linked to the global energy economy in order to assess their individual and combined implications for global energy security. This article therefore aims to promote an understanding of, and an attitude towards, the global energy economy that acknowledges that it is a composite affair with a high degree of interplay between its constituent parts, and that there are systemic reasons why the current state of play fails to address global energy security needs. The aim of the article is to perform an extensive mapping-out and analysis of the institutions and processes linked to the governance of the global energy economy, and of those purportedly concerned with global energy security, in order to answer the following three questions: How does the current governance system of the global energy economy affect global energy security? What challenges does the current global energy governance system pose to global energy security? Which models of global energy governance should be applied to promote and improve global energy governance generally and global energy security in particular?

Description: Disagreements regarding the role to be played in oil and gas activity by Iraq’s Kurdish regional and provincial governing structures always exist as a potential complication to the important contribution which that nation is capable of making to world oil and gas supplies. The principal touchstone for such disagreements resides in the terms of provisions of Iraq’s 2005 Constitution. Of especial significance are the Constitution’s articles 112 and 115, as well as the relationship between that instrument’s article 143, and its pulling-in of articles 25(E) and 53(A) of the Constitution’s predecessor document, the so-called Transitional Administrative Law. Examining the complexities of and interplay between these articles reveals a legal architecture vesting the federal government in Baghdad with powers over certain oil and gas activities, leaving other activities to the regional and provincial governments, and still others in a situation where the accuracy of assertions of regional and provincial governmental power is less than clear. A further complication to this constitutional architecture is the fact that specific interpretations of relevant legal provisions even suggest the possibility of differences in legal regimes dependent upon whether exploitation is from resource deposits found in certain named Kurdish provinces as opposed to others.

Description: The Southern Gas Corridor project has been designed to bring natural gas from Azerbaijan to European markets, crossing six transit countries. The cost of the overall project, including upstream development, is estimated at around $45 billion, making it the largest cross-border gas project in the world by several measures such as the length of the pipeline, the number of participating companies, governments, regulators and contractors, and the level of investment and financing. The umbrella legal framework of the project is laid out in the production sharing agreement (PSA), in various inter-governmental and host government agreements with transit countries, and in long-term gas sales and transportation agreements with European gas buyers and transporters respectively. Given the massive geographical scale of the project, its legal framework is complex. In addition to the key project legal agreements, the project's legal framework involves the interplay of the application of a variety of laws at the national (host/transit countries), regional (EU) and international law levels. This article reviews the key legal and regulatory issues and developments in this major gas transit project. Given the complex legal structure of the project and the differing approaches of the various transit countries and investors, a challenging legal question was how to align these perspectives and achieve uniform legal principles and mechanisms across all major project agreements, with diverse stakeholders. The resulting legal framework of the project may serve as a valuable precedent for the structuring of similar international energy transit projects in the future.

Description: Indonesia is blessed with numerous variants of energy resources; both renewable and non-renewable sources. From the plethora of alternatives, natural gas is among those energy resources which are gaining popularity, as evidenced by the significant increase in demand in recent years. Unfortunately, however, this positive increase in demand is not equally followed with the sufficient supply of natural gas. This consequently leads to a gap between the supply of natural gas and the increasing demand from the market. In order to equalize this disparity between supply and demand, numerous experts have raised the idea of further regulating the natural gas aggregator to resolve this issue. This article will provide a general overview of the definition of natural gas aggregators contained under the draft presidential regulation regarding downstream gas management and to compare it with the existing definitions of natural gas aggregators.

Description: This article focuses on reviewing energy law education in the UK. For such a fast-growing discipline it is important to reflect on the features that give cohesiveness to its curriculum development: how it is taught; who is teaching it and where it is being taught; and what content is given to the curriculum offered? Is it, for example, national in focus or international, or both? A recent review on the state of energy law education in the US demonstrates the scale and ambition of energy law education in that country. This article complements that exercise by providing a review of energy law education in the UK as at 2016. By comparing and contrasting the two approaches, we can glean some distinctive features of the UK approach. More research is needed on energy law education but from this article it is clear that energy law has taken a foothold in legal education in the UK.

Description: Australian energy markets, like EU markets, have been administratively led over recent decades to create more competitive markets. There have been many inquiries and reports by Australian government agencies on regulatory, economic and competition law aspects of energy markets. A recent controversial report by the competition agency recommends increased price regulation of natural gas pipelines on the grounds, not of enhancing competition, but of ameliorating market power of pipeline operators, to create perceived efficiency benefits in downstream and upstream markets. The change in emphasis from ‘competition’ to ‘efficiency’ raises important issues for the energy sector and competition law generally in Australia because market power is traditionally assessed by reference to structural analysis, and the institutional framework generally limits the jurisdiction of Australian courts to ‘competition’ assessment while conferring jurisdiction on administrative agencies to assess ‘efficiency’. This article discusses the competition law implications of these recent developments for the energy sector, particularly natural gas, with respect to market power and access to facilities, having regard to EU and US third-party access regimes.

Description: The Sherman Act, with its origin in the Populist and Progresive eras, was enacted to break up ‘trusts’ like the Standard Oil Company, a vertically and horizontally integrated exploration and production company. Over 100 years later, the DOJ challenged the proposed merger of Halliburton and Baker Hughes, two oil-field services companies. The government feared that the merger would potentially raise prices of servces provided by these companies to E&P companies, which are some of the largest corporations in the world and include many direct descendants of Standard Oil. Energy is of great importance to the US economy. As a result, it is closely scrutinized by the US antitrust agencies-the Department of Justice and Federal Trade Commission. This article summarizes US antitrust laws and their origins, describes recent changes in the oil and gas industry, explains how those changes have influenced the enforcement articles of the DOJ and FTC, reviews the current industry and antitrust trends, identifies likely enforcement activity in the near future and discusses the potential effect of the US's 2016 Presidential election on antitrust enforcement.

Description: This article examines the possibility for joint purchases LNG from United States by consortiums of European Union based companies. The main focus of the study is to examine and apply the rules of EU competition law to joint purchasing of US-based LNG. The article will discuss various sensitive areas for this type of cooperation and provide guidance on how to address the most difficult issues from a competition law perspective.

Description: The internal market for electricity and gas, which European Union (EU) Member States were to have completed by 2014, is intended to deliver real choice for all consumers and achieve competitive prices. Today’s reality is often the opposite: despite the advanced liberalization of the energy sector, and formal market opening in line with the EU energy acquis , several Member States continue to regulate retail energy prices. In the short term, price regulation is not necessarily bad for customers. Retail prices are regulated below ‘real’ costs so that customers benefit from artificially low prices. However, in the long term, price regulation dissuades customers from seeking better deals, and acts as a barrier preventing energy suppliers from entering the market. From a legal point of view, regulated energy prices also give rise to concerns. This article will show that State interference runs counter to the liberalization objective of the EU rules on the internal energy market and may, in particular cases, also involve State aid within the meaning of Article 107(1) TFEU. It will be shown that these EU rules proceed from price-setting on a free market and competitive basis, while State intervention is allowed only in exceptional and specifically justified circumstances. Other EU legal provisions address competition in the sector too, such as collusion, abuse of dominance and merger control: our focus here is to show that other instruments under the broad umbrella of competition law are also crucial in developing and protecting the competitive process. The European Commission is therefore right in insisting on phase-out timetables for regulated energy prices and continuing to promote market-based price formation.