Oil and Gas Production Contracts, Volume 1. 1st ed.

Citation

Bhattacharyya, S.C. (2009), "Oil and Gas Production Contracts, Volume 1. 1st ed.", International Journal of Energy Sector Management, Vol. 3 No. 4, pp. 428-430. https://doi.org/10.1108/17506220911005803

These two books are reviewed together because of the similar nature and inter‐relatedness of the content. The first deals with the exploration phase of oil and gas business while the second deals with the production phase. As these two volumes are complimentary to each other and as the second volume is in fact a sequel to the first (as the preface of the second volume notes), a common review makes sense.

The book on petroleum exploration deals with “the agreements that relate to the everyday dealings of operators in exploration” (p. 20) and does not focus on the regimes under which these operations take place, especially the licence or the production sharing arrangements (PSA). The author introduces these regimes briefly and clarifies the focus of the book early on. Similarly, the second volume covers “the agreements that are essential to the process of oil and gas development and production” (p. viii). It reviews an entire gamut of agreements used in the production and development of petroleum resources and thus complements the first volume. Given the multitude of agreements that are used in petroleum exploration and production businesses, it is not easy to obtain a comprehensive view of them and understand the operational issues and their inter‐relationships unless one takes a holistic view. These two volumes achieve such a goal and provide a complete review of the entire suite of agreements used by this globally important industry. This is done in a language, which is also accessible to non‐lawyers like me, which I consider to be the most important feature of these volumes. The breadth of the coverage and expertise contained in these volumes would surely be appreciated by the professionals, students of energy law and others who are interested in the subject.

Both the volumes follow a similar style and pattern. In fact, the content is organised around six chapters in both the books and the chapter headings are pretty much similar. Both the volumes start with government agreements that establish the relationship between the operator and the host government. The first volume presents this in a greater detail (and consequently, to avoid repetition, only a summary is presented in the second volume). As the operator is generally a join venture of companies, the legal arrangements used to govern and regulate the relationships of the joint venture partners themselves are considered next. The first volume presents this in two chapters – 2 and 3 while the second volume devotes only one chapter to this. The nature of these governance mechanisms is not uniform or same in the two businesses. This along with the issue of avoiding repetition justifies a differential treatment in the two volumes. Once the internal arrangements are in place, the arrangements for third parties providing services to the exploration and production activities have to be considered. In the first volume, this is presented in chapter 4 while chapters 3 and 4 of the second volume deal with this. The fifth chapter is specific in each book: in the first volume, the drilling contracts are presented while in the second volume, the sales contracts are covered. Finally, the arrangements for acquisitions or disposals of assets are considered in the last chapter.

Within the above structure, the two volumes capture a detailed review of contractual arrangements. The second volume presents this better by using different sections while the first volume has embedded them in the chapters. Clearly, one cannot expect charts or diagrams from a legal book (there is only chart in the two volumes) but diagrams, flow charts and tables could have been used to make the presentation simpler and more comprehensible for non‐lawyers.

Both the volumes have relied on the UK experience to a large extent. Although there is nothing wrong in this approach, international readers would have benefited more if examples from other jurisdictions were also provided at appropriate places, given that most of the activities are taking place and are likely to take place beyond the OECD. Moreover, as the interest in non‐conventional oil was high at the time publication of the volumes, one wonders why it did not receive any attention of the author(s). Finally, the presentation style of the book leaves some room for improvement. Although the book reviews legal agreements, it is difficult to imagine that there is no other publication that has dealt with such issues earlier. At least the government publications, cases related to these agreements, models contracts developed by different organisations and some general legal references could have been included for further reference. Absence of any references in the two volumes is somewhat surprising.

Despite the above lacunae, I have enjoyed reading these volumes and have enriched myself. I now have a much better understanding of the legal complexities of petroleum exploration and production. These volumes will surely be considered as valuable references by all parties interested in petroleum exploration and production.