NATURE OF INTERNATIONAL PETROLEUM INDUSTRY PRACTICES AND THEIR IMPACTS ON LAW GOVERNING UPSTREAM CONTRACTS

Document Type : ISI

Authors

1 Associated Professor, Department of Private and Economic Law, Faculty of Law and Political Science, Allameh Tabatabai University

2 Ph.D. Student in Management of Iternational Oil and gas Contracts, Faculty of Law and Political Science,Allameh Tabatabai University

Abstract

International petroleum industry practices represent activities of industry players aiming to optimize the procedures and increase the efficiency of production, safety of petroleum operation and environmental protection. In this paper, first, nature of these practices and similar concepts are examined and their sources are described. Then, having reviewed the characteristic of upstream contracts, impact of these practices on the law governing such contracts has been studied. It was shown, using the Dépeçage theory, that international petroleum industry practices, as set of transnational rules, play the role similar to applicable law, as agreed by the parties in an upstream contract. Finally, by analyzing the international arbitration tribunal in the petroleum industry, it was revealed that despite the host countries’ efforts to apply national law on all aspects of an upstream contract, these tribunals tend to prioritize international law over the national one regarding the international commitments of the host country.

Keywords


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