Alaya Legal presents its First Issue of the Oil & Gas E-Zine. The publication combines updates relating to Natural Gas and Petroleum sectors and provides comprehensive business, legal and regulatory developments from the global oil and gas industry.
Reference Material
- Categories of proven oil and natural gas reserves across the globe.
- Overview of Upstream, Midstream and Downstream sectors in the Oil & Natural Gas Industry.
REGULATORY & JUDICIAL DEVELOPMENT – INDIA
M/s Welspun Maxsteel Limited & M/s Ispat Industries Limited v. Gas Authority of India Limited & Union of India
Case Nos. Legal PNGRB/02/2011 & Legal 02A/2011
Facts
The petitioners had been purchasing natural gas from GAIL under a Gas Supply Agreement since 1993 and subsequently entered into a Gas Sales and Transmission Contract (GSTC) on December 30, 2006.
The Union of India revised the price of non-APM natural gas through a directive dated November 24, 2010 and made the revision effective retrospectively.
GAIL implemented the revised pricing based on contractual provisions allowing future price revisions pursuant to government directions.
Issue
Whether charging the revised gas price with retrospective effect violates principles of natural justice and fair trade practices.
Order
The PNGRB held that retrospective recovery of increased natural gas prices was unlawful and contrary to principles of fair trade, thereby being detrimental to consumer interests.
Amendment to PNGRB CGD Network Authorization Regulations, 2008
April 7, 2014
The Petroleum and Natural Gas Regulatory Board amended the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008.
Regulation 7(1)(c), relating to bidding criteria, was revised to introduce more specific and detailed evaluation standards.
Auto Fuel Vision and Policy 2025
May 2014
The Ministry of Petroleum and Natural Gas released the Draft Auto Fuel Vision and Policy 2025 based on recommendations from an Expert Committee constituted in December 2012.
Major recommendations include:
- Roadmap for auto fuel quality improvement up to 2025.
- Recommendations on natural gas and alternative automotive fuels.
- Vehicular emission standards and implementation framework.
- Promotion of environmentally sustainable fuels.
- Fiscal measures for refinery modernization and logistics upgrades.
NELP-X Announced
July 2014
The Government announced the tenth round of the New Exploration Licensing Policy (NELP-X), offering 46 exploration blocks across 13 sedimentary basins in India.
The proposed framework introduced a move toward a uniform licensing policy covering all hydrocarbon resources under a single contractual regime.
- 17 Onshore Blocks
- 15 Shallow Water Blocks
- 14 Deep Water Blocks
- Total Area: 0.166053 million sq. km.
FEATURE
Dispute Resolution in Oil & Gas Contracts
Oil and gas contracts are long-term, capital-intensive arrangements involving multiple stakeholders. Due to their complexity, disputes may arise regarding contractual interpretation, performance obligations, commercial rights, liabilities and policy matters.
Disputes may originate from:
- Express contractual provisions.
- Implied contractual obligations.
- Failure to perform contractual commitments.
- Differences regarding rights and liabilities.
- Technical and operational disagreements.
Various dispute resolution mechanisms are available:
- Arbitration
- Expert Determination
- Mediation
- Negotiation
- Litigation
- Multi-tier Dispute Resolution Mechanisms
- Alternative Dispute Resolution (ADR)
Arbitration is generally preferred due to confidentiality, cost efficiency and relatively faster proceedings. Expert determination is particularly useful for highly technical disputes, while mediation continues to gain popularity because of its collaborative and flexible nature.
For cross-border transactions, enforcement of arbitral awards and judicial decisions remains a critical consideration. Even the most carefully drafted dispute resolution clause may prove ineffective if enforcement mechanisms are weak or unavailable.
Effective dispute resolution provisions are only as valuable as the enforceability of the resulting award, judgment or settlement.
MARKET DEVELOPMENTS – GLOBAL
Genel Energy Acquires Offshore Angola Interests
April 3, 2014
Genel Energy and White Rose Energy Ventures acquired 15% working interests in Blocks 38 and 39 offshore Angola within the Kwanza Basin.
Shell Announces Offshore Discovery in Malaysia
April 17, 2014
Shell reported a successful offshore discovery through the Rosmari-1 exploration well located in Block SK318 offshore Malaysia.
Total Discovers Hydrocarbons Offshore Ivory Coast
April 17, 2014
The Saphir-1XB exploration well on Block CI-514 confirmed the presence of liquid hydrocarbons in deep offshore Ivory Coast.
Schlumberger Launches Reservoir Mapping-While-Drilling Technology
May 19, 2014
Schlumberger introduced the first reservoir mapping-while-drilling service, enabling advanced reservoir visualization and production optimization.
ExxonMobil Discovers Oil & Gas in Argentina
May 21, 2014
ExxonMobil Exploration Argentina reported successful oil and gas discoveries from unconventional shale formations in Neuquén Province.
Rosneft and ONGC Videsh Sign Cooperation MoU
May 28, 2014
Rosneft and ONGC Videsh executed a Memorandum of Understanding for cooperation in hydrocarbon exploration, appraisal and production activities within Russia.
Total Signs Long-Term LNG Agreement with Pavilion Gas
June 4, 2014
Total entered into a 10-year LNG sale and purchase agreement with Pavilion Gas for the supply of 0.7 million tonnes per annum beginning in 2018.
GAIL Gas and UPSIDC Expand Gas Distribution Infrastructure
June 12, 2014
GAIL Gas Limited and Uttar Pradesh State Industrial Development Corporation signed an MoU to expand downstream gas distribution infrastructure across Uttar Pradesh.
BP and CNOOC Sign LNG Supply Agreement
June 17, 2014
BP and CNOOC signed a Heads of Agreement for the supply of up to 1.5 million tonnes of LNG annually over a 20-year period beginning in 2019.
Shell Announces Third Major Norphlet Discovery
July 15, 2014
Shell reported a significant discovery through the Rydberg exploration well in the deepwater Gulf of Mexico’s Norphlet play.
GAIL and Sumitomo Enter Strategic LNG Cooperation
July 25, 2014
GAIL and Sumitomo Corporation signed an MoU covering global LNG, petrochemical, natural gas procurement and pipeline business opportunities.
Eni Announces Major Gas Discovery in Gabon
July 31, 2014
Eni discovered significant gas and condensate resources in the Nyonie Deep exploration prospect offshore Gabon, with estimated resources of approximately 500 million barrels of oil equivalent.
NEXT ISSUE
December 2014
IN-HOUSE CONTRIBUTORS
- Neha – Oil & Gas Team (Downstream Sector)
- Sakshi Bawa – Oil & Gas Team (Downstream Sector)
SOURCES
- Norwegian Petroleum Directorate
- U.S. Energy Information Administration
- The International Energy Agency
- Organisation of the Petroleum Exporting Countries
- The Oil and Gas Journal
- Official Websites of Various Oil & Gas Companies
DISCLAIMER
The information contained in this private circulation is not legal advice and should not be treated as such.
The information is sourced from public domain materials and is intended solely for private and non-commercial purposes.
No representation is made regarding the accuracy, completeness or reliability of the information provided.
This disclaimer shall be governed by and construed in accordance with the laws of India and any disputes shall be subject to the exclusive jurisdiction of the courts of the Republic of India.
Doc ID: 1O&G14
