The series of commercial and legally enforceable agreements lays the foundation of exploitation of an offshore Oil & Gas field. The legislation for exploitation of natural reserves, specifically oil and gas from the sea bed, began in the 1950s in North America. The trend continued to grow through mostly domestic resources. In the 1970s with the exploitation of North Sea Oil & Gas (“O & G”) fields, the surge of activities led to international participation through consortiums and Joint Venture Agreements. The legislative framework for recognising and enforcing such agreements and rights of exploitation of natural reserves was non-existent in the beginning, but evolved in tandem with the increase in E & P activities. The jurisprudence in North America, Canada, UK, North Sea, OPEC member nations and some other jurisdictions like Malaysia, under petroleum acts and Exclusive Economic Zone Acts (“EEZ”) is now well developed. Whereas the developing economies with offshore reserves, have adopted some of the legislation from US and North Sea jurisdictions as a reference point, being early starters, and partly from their own legislations. The underdeveloped and emerging economies without prior experience in any E & P ventures and lack of legislative framework, while offering attractive opportunities to international investors and explorers, are also vulnerable to be exploited by experienced E & P contractors.
In context of the ubiquitous trend, where most of the onshore and offshore O & G fields suitable for exploitation, are explored through series of Joint Venture Agreements (“JVA”), Production Sharing Contracts (“PSC”) or Joint Development Agreements (“JDA”) with international investors. There are significant risks for both the host countries without sound legal infrastructure and the investor cum E & P contractor. The investor is concerned with the risk of expropriation due to lack of proper legal framework in an underdeveloped or developing countries like for example, Venezuela, North / South Sudan, Myanmar, Cambodia, Timor Lest etcetera. The host countries could be concerned that, due to lack of
technical expertise, legal infrastructure and poor international standing, they might be at a disadvantage and or be taken advantage of by shrewd foreign parties.
The challenge for the emerging host countries is to speedily exploit the natural reserves for helping the country to come out of poverty or depressed economic situation. It takes time to acquire the technical expertise and legal acumen to develop appropriate petroleum development acts or legal infrastructure indigenously. The time which is not available and the matter for which time is of the essence, is the development of the economy as a first priority. How such emerging economies can develop or adopt a robust legal framework for exploitation of petroleum reserves, in shortest time without reinventing the wheel? This paper evaluates the proven and emerging methodologies under international private laws, through which a reasonably sound and appropriate contractual framework can be adopted to overcome the legislative gaps and spearhead the O & G exploitation projects in Emerging Economies and Underdeveloped Countries (“EEUC”).
The first legislation for review and adoption, in context of the rise in territorial disputes, will be the application of the 1982 United Nations Convention on the Law of the Sea (“UNCLOS”). The second step shall be to identify the suitable preconditions for attracting Foreign Direct Investments (“FDI”), Multi-national Investment Treaties (“MIT”), Bilateral Investment Treaties (“BIT”), and third step is to consider the benefits if any by subscribing to Energy Charter Treaty (“ECT”), and 1965 Convention on the Settlement of Investment Disputes between States and Nationals of other States[1 (“ICSID”). The focus of the research is for countries from South East Asian, North African, Caspian Sea and South American regions. The findings of the evaluation and analysis, provides a set of guidelines for consideration by the upcoming oil and gas producing countries or EEUCs, without prior legal framework.
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 Convention on the Settlement of Investment Disputes between States and Nationals of Other State opened For Signature at Washington, on 18 March 1965 and came into force on 14 October 1966.
 Mastrangelo, Erin. ‘Overview of U.S. Legislation and Regulations Affecting Offshore Natural Gas and Oil Activity.’ Energy Information Administration, Office of Oil & Gas, September, 2005.