The deep seabed mining (DSM) industry is growing rapidly, expanding beyond national jurisdiction and onto the high seas. The legal framework governing the DSM industry is unique and continues to evolve. While the opportunities in this territory – much of it literally uncharted – are hard to overstate, with a new and evolving legal regime comes special risks. While securing project finance for DSM projects is already challenging for technical and operational reasons, sovereign risk is another major factor.
With many of the foundations for its success already laid, solar photovoltaics is expected to dominate the global energy conversation in 2017. What remains to be seen is whether solar can compete (and whether it makes sense) and how the world's energy systems can be redesigned to accommodate the inevitably high and varying levels of deployment.
As they have sovereign rights and exclusive jurisdiction over the exploration for and exploitation of natural resources, coastal states are clearly acting within their public international law jurisdiction if they elect to refuse the operation of a floating production unit under a foreign flag. However, coastal states may need to look at alternative approaches and the subsequent consequences for coastal state governance.
Profitability in the liquefied natural gas market continues to be squeezed as prices remain low in a market awash with capacity. Costs have increased as human and resource availability has failed to keep pace with the rate of development. As a result of market conditions, a number of companies posted losses in the third quarter of 2016. However, opportunities remain.
Uncertainty in the energy sector understandably has oil and gas companies that are engaged in joint operations and joint venture projects on edge. Energy companies need to identify the risks to which participants in joint oil and gas exploration and production operations and joint ventures are exposed when a partner becomes insolvent; they should also consider possible strategies to mitigate these risks.
Following a prolonged period of high oil prices, the world must adjust to lower oil prices. Where does this leave oil companies, many of which modelled their new exploration and production (E&P) projects around oil prices of $90 to 100 a barrel? This update sets out some of the strategies and options that E&P companies might think about as the market adjusts to a new normal, and highlights some key issues to consider.
In many oil and gas M&A transactions, the valuations by acquirers and vendors tend to differ, and the valuation of oil and gas upstream assets is inherently uncertain, particularly in respect of undeveloped reserves. Although the mechanism has its difficulties, one way to bridge the value gap is by employing contingent consideration.
Carbon capture and storage (CCS) as a way of reducing carbon dioxide emissions is relatively new, but the oil and gas industry has long used many of the processes involved. However, the reduced efficiency of power plants and the cost of CCS technologies are barriers to implementation. As well as providing legislative frameworks, governments must look to implement incentives and penalties.
Responding to industry calls for standard form documentation for the spot and short-term cash-trading sector, the Association of International Petroleum Negotiators released a model form in October 2009, seeking to create a more efficient secondary market for liquefied natural gas. With the industry take-up still unclear, what are its prospects of being used to document spot arrangements?