Hydrocarbons meaning

This Checklist This Checklist sets out the principal matters to weigh when advising a potential claimant on pursuing a claim in an energy dispute. It spans a broad spectrum of disputes, the common thread being their basis in the energy sector, embracing claims linked to oil and gas exploration and production, the design, construction and operation of facilities that process and transport hydrocarbons, together with the generation of power and the sale of energy. By their nature, energy projects are typically intricate, multi-layered and frequently involve international elements. Accordingly, it is prudent from the outset to work with a clear checklist that captures every general and specific issue that must be addressed when managing such a dispute. For further guidance on responding to both energy disputes and attendant litigation, arbitration and ADR guidance, see the links to our related content on the right-hand side of this page. This Checklist should be read alongside Practice Note: Starting a claim in an energy dispute—a practical guide. Action Comments Consider any...

Questions & unsatisfactory answers—the European Commission publishes guidance on the importer requirements of the EU Methane Regulation On 19 November 2024, the Commission released ‘Questions and answers on importer requirements of EU Methane Regulation (EU) 2024/1787’ (the Methane Q&A). In essence, the Methane Q&A seeks—albeit inadequately—to resolve key issues that have preoccupied the energy sector since Regulation (EU) 2024/1787 of the European Parliament and of the Council of 13 June 2024 on the reduction of methane emissions in the energy sector and amending Regulation (EU) 2019/942 (the EU Methane Regulation) took effect on 4 August 2024. The EU Methane Regulation imposes extensive obligations on: operators with gas, oil or coal activities within the EU, and importers placing on the EU market natural gas, oil or coal extracted outside the EU The Methane Q&A concentrates on the latter—rules applicable to entities bringing hydrocarbons into the EU. It claims to respond to 35 questions. This piece does not attempt to catalogue every answer...

The UK Minister of State for Energy Security and Net Zero, Graham Stuart, justified the move by saying the ECT is outdated and urgently needs reform; discussions have stalled and a sensible update now seems improbable. Remaining a party would not aid the transition to cleaner, cheaper energy, and could even penalise the UK for its world‑leading drive to achieve net zero. Background to the ECT The ECT is a multilateral treaty concluded in 1994 and entering into force in 1998. It counts 50 states as signatories, including the European Union and its Member States. The treaty was designed primarily to facilitate investment by Western European economies into energy production in Eastern Europe after the dissolution of the Union of Soviet Socialist Republics (USSR). More specifically, one aim was to guarantee Western Europe a dependable energy supply—mainly hydrocarbons—from former USSR republics. In summary, the ECT safeguards investments in the energy sector in two supplementary ways. First, it sets out a range of substantive protections against state actions...

Original news Dean v Secretary of State for Business, Energy and Industrial Strategy [2017] EWHC 1998 (Admin); [2017] All ER (D) 72 (Aug). The Planning Court concluded that the grant of a PEDL under section 3 of the Petroleum Act 1998 (PA 1998) was not entirely constrained by the statutory licensing code, so the Secretary of State could agree to alter the licence terms. Consequently, it rejected the claimant’s case that the deed varying the licence was ultra vires, and dismissed his application for judicial review. What was the background to the case? In 2008 the defendant issued a PEDL conferring exclusive rights on the licensees to search, drill for and recover hydrocarbons within a defined geographic area. The licence period was split into three stages: a stage for the licensee to undertake the agreed works programme of seismic and geological surveys a stage to obtain Oil and Gas Authority approval of a field development plan a production stage ...

Introduction A production sharing contract (PSC) sets out the legal relationship between a host state and a private participant (the ‘investor’). Under it, the state engages the investor to undertake oil and gas exploration and production (E&P) within a specified area and timeframe. Unlike other upstream petroleum arrangements, the host state retains ownership of the in‑situ hydrocarbons. However, to reimburse the investor for the E&P it performs, title to an agreed share of produced oil and gas passes to the investor at a contractually defined delivery point. For a broader overview of alternative upstream models, see Practice Note: Understanding upstream petroleum agreements—concessions, production sharing contracts and service contracts. The key provisions in a PSC Each jurisdiction using a PSC as the foundation for its upstream regime drafts its own model. Typical clauses address: purpose and scope responsibilities and grant of rights term and termination minimum work programme and expenditures contract area and relinquishment annual work programmes and ...

The purpose and scope of petroleum agreements For a private sector participant (the ‘investor’) to undertake oil and gas exploration and production (E&P) onshore or offshore, the investor must secure approval from the ultimate owner of the hydrocarbons, which is ordinarily the host state. State ownership may arise under a constitution (for example, Iran) or pursuant to statute (for example, the UK). Such approval is generally structured in one of three ways—though numerous hybrids combine elements of these models: a concession (in contemporary usage, a licence or a lease), a production sharing contract (a ‘PSC’), or a service contract. In this Practice Note, these arrangements are collectively termed ‘petroleum agreements’. A petroleum agreement sets the parameters within which an investor conducts E&P operations in a specified area. It typically covers a broad array of matters, the key ones being outlined in the table below. The precise manner in which these matters are articulated will vary with the petroleum agreement regime...

Introduction Typically, oil and gas licence holders put in place separate joint operating agreements (JOA) to govern their relationship and the way they intend to collaborate on exploration, development and production under a particular licence. For broader guidance on joint operating agreements in the sector, see Practice Notes: The purpose and the principles of the joint operating agreement and Joint operating agreement—key clauses. There are, however, situations where hydrocarbon reserves ‘straddle’ two or more licences that would otherwise be unrelated. In such cases, the following connected questions arise: how parties under different licences can produce hydrocarbons from these fields while sharing an objective of maximising potential without needlessly depleting the field how any revenues generated by operations conducted across two (or more) distinct licences should be allocated how to establish the respective interests of each licence holder To address these matters, the oil and gas industry has developed the concept of a ‘unitisation and unit operating agreement’. Participating interest,...