Jurisdiction(s):
United Kingdom

Key definition

Hydrocarbons definition

What does Hydrocarbons mean? In legal practice, hydrocarbons describes oil and gas substances—crude oil, natural gas, associated liquids and condensates—encountered in upstream licensing, transportation and sale agreements, taxation, decommissioning security and environmental liability matters. Chemically, hydrocarbons are organic compounds consisting solely of hydrogen and carbon. UK and Irish energy legislation typically defines petroleum rather than hydrocarbons (for example, the Petroleum Act 1998 (UK) and the Petroleum and Other Minerals Development Act 1960 (Ireland)). Accordingly, hydrocarbons is a descriptive expression used across multiple legal contexts, including oil and gas contracts, securities and finance, planning and infrastructure, and contamination and remediation (e.g. references to total petroleum hydrocarbons...

Legal Guide to Crude Oil, Natural Gas and LNG Sales and Trading: Physical Supply, Derivatives, Incoterms, Market Hubs (NBP/Beach) and Standard Forms (ISDA, EFET, AIEN)

Published by a LexisNexis Energy expert

Practice notes

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An Introduction to Oil & Gas Sales and Trading

States grant businesses the right to search for and extract Hydrocarbons (crude oil and natural gas) within a specified area under a concession. Those holding the concession commonly set out their mutual duties and rights for activities under that concession by agreeing a joint operating Agreement (JOA). Where exploration, appraisal, development and production succeed, crude oil and natural gas are brought to the surface. For further detail on JOAs and concession arrangements, see Practice Notes: The purpose and the principles of the joint operating agreement and Understanding upstream petroleum agreements—concessions, production sharing contracts and service contracts. For more on the AIEN (formerly known as the AIPN) Joint Operating Agreement, consult the textbook: The AIPN Joint Operating Agreement: A Practical Guide.

Physical v Non-physical (or Virtual) Sales and Trading

A JOA will usually expressly exclude the marketing and sale of hydrocarbons from its scope. Each concession holder will therefore typically put in place separate arrangements to monetise its entitlement to hydrocarbons produced and lifted from the concession area...

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Matthew Stott

Orrick, Herrington & Sutcliffe

Matthew's practice focuses on commodity and equity derivatives trading (in UK, European and international markets), the development and operation of international energy and infrastructure projects (renewable and conventional power assets; a broad range of infrastructure assets with a current focus on fibre-optic broadband rollout in Europe) and M&A in the European energy markets. Matthew has spent time in-house in a global investment bank as a seconded adviser to the derivatives trading group, in a major international utility company as a seconded adviser to the energy optimisation and trading business (based in Paris) and in a major LNG and natural gas trading company leading the legal derivatives team. ...

Rebecca Downes

Orrick, Herrington & Sutcliffe

Rebecca focuses her practice on oil and gas, advising a broad range of clients on a variety of transactional matters across key areas of the oil and gas value chain, including upstream (conventional and unconventional resources), midstream, LNG and oilfield services. She has a particular focus on gas and LNG sales and trading arrangements, upstream acquisitions, project development activities, gas storage, concessions, joint venture arrangements and royalty agreements. She regularly represents international oil companies, independent exploration and production companies and state-owned entities, among others. ...

Web page updated on 29/05/2026

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