Analysis of the Basics of the “Good Oilfield Practice” Clause in Upstream Oil and Gas Contracts with Emphasis on the Environmental Obligations of Contractors

Document Type : ISI

Authors

1 Professor. Faculty of law, Shahid Beheshti University, Tehran, Iran.

2 Assistant Professor, Department of Oil and Gas Law, Faculty of Petroleum, University of Petroleum IndustryTehran, Iran.

3 PhD Candidate in Oil and Gas Law, Faculty of law, Shahid Beheshti University, Tehran, Iran.

Abstract

Introduction
The concept of Good Oilfield Practice (GOP) has played a foundational role in shaping operational standards within the global oil and gas industry for over a century. As a professional benchmark, GOP encompasses the principles, procedures, and ethical guidelines that responsible contractors and operators are expected to follow to ensure safe, efficient, and environmentally sound exploration and production. Historically, GOP emerged as a response to the inherent risks and complexities of petroleum activities—operations that involve highly flammable and explosive materials, technological uncertainty, and significant potential harm to people and the environment. Consequently, the notion of “good practice” has evolved alongside advancements in engineering, health, safety, and environmental management, adapting to new technologies and international legal frameworks governing petroleum operations.
The legal interpretation of GOP, however, remains context-dependent and varies significantly between jurisdictions and contractual regimes. In certain countries, particularly developing oil-producing states, GOP functions as the de facto standard for assessing contractor performance and compliance with environmental and operational obligations. Despite its importance, in some legal systems—such as Iran’s—explicit references to GOP are absent in statutes and contractual frameworks, leading to ambiguity in interpreting the contractors’ environmental and safety duties. This study aims to explore the conceptual foundations of GOP, its legal and operational implications, and the necessity of incorporating this principle into Iranian petroleum contracts to align national practices with internationally accepted standards.
Method
This research adopts a qualitative doctrinal methodology supported by comparative legal analysis. The study involves a systematic review of primary and secondary legal materials, including upstream oil and gas contracts, national petroleum laws, and international model agreements. Academic commentaries, case law, and regulatory texts were analyzed to identify the nature, purpose, and application of GOP clauses.
The doctrinal component focused on examining how GOP has been defined and applied across different contractual systems, particularly in common law jurisdictions where the term has a well-established legal lineage. The comparative aspect concentrated on evaluating the degree of correspondence between GOP and Iran’s existing contractual frameworks—especially the Buyback and IPC (Iran Petroleum Contract) models—where environmental and operational obligations are governed primarily through Health, Safety, and Environment (HSE) provisions rather than GOP itself.
This methodological approach allows the study to bridge the conceptual gap between international contractual practices and Iran’s domestic legal structure, thereby providing a foundation for potential legal reforms or contractual amendments.
Conclusions
The findings demonstrate that Good Oilfield Practice offers a broader and more adaptive framework for regulating contractor behavior than the traditional HSE standard. Whereas HSE focuses on compliance with prescribed safety and environmental requirements, GOP embodies a performance-based standard that encourages continuous improvement, innovation, and responsibility. GOP obliges contractors not only to adhere to technical norms but also to exercise professional judgment consistent with the practices of prudent and experienced operators under similar conditions.
For Iran, the absence of GOP in its petroleum legislation and contracts represents a missed opportunity to align with international norms. Incorporating GOP into Iranian legal frameworks could enhance operational safety, environmental stewardship, and contractual accountability. Furthermore, GOP’s flexibility allows it to accommodate emerging issues such as climate change mitigation, carbon management, and energy transition strategies, areas that are increasingly critical to the long-term sustainability of petroleum operations.
In conclusion, this study argues that Good Oilfield Practice should be formally recognized and embedded within Iran’s petroleum contracts and regulations. Doing so would not only strengthen environmental protection and risk management but also elevate the country’s upstream legal and operational standards to the level of best international practice.

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References

منابع
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Journal Of Researches Energy Law Studies
Volume 10, Issue 2
March 2025
Pages 227-252

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