Transnational Rules Governing Drilling Contracts and Its Resources

Document Type : ISI

Authors

1 Department of Energy and International Trade Law, Faculty of Law, University of Tehran (College of Farabi)

2 PhD in Oil and Gas law, Faculty of Law, University of Tehrani, Tehran, Iran.

Abstract

Oil exploration and development operations, and especially the exploitation of drilled wells, are managed by a complex and multi-layered chain of stages and types of technical services. One of the most important operations is oil and gas well Drilling Services. More than twenty different services are required to manage, repair, maintain, redrill and control oil and gas wells during their operation. From the point of view of advancement and delay, technology has always been ahead of the regulations and laws governing it. In order to organize the specific regulations of each sector, the lawyer should pay attention to this advance and not to legislate, compose and interpret regardless of the requirements of technology and target groups and its functions. Drilling services and related contracts can be considered among the most widely used types of services and contracts in the upstream sector of the oil and gas industry, from the exploration stage to the end of production and exploitation.
 By studying the contracts concluded between Companies (employers) and Contractors that come from different legal systems, as well as contract samples that are proposed by related professional and trade organizations, questions arise that such as below: What is the origin of maximum similarity and common language in this section? Can this closeness and sometimes sameness of drilling contracts be simply interpreted as "Boilerplates" in the contracts, or is the issue more fundamental than that, and in the stages of interpretation, implementation and dispute resolution, it is also the basis of important decisions? The method of ascertaining the rules can be based on induction (moving from the part and reaching the general rules). The sources of this inference are also 1- Repetition of contractual conditions based on the standards and examples compiled of drilling contracts by specialized institutions and major multinational companies in the oil industry; 2- Arbitral awards, including classical awards in the field of oil and general awards in the field of international trade and domestic arbitration awards, which explicitly refer to concepts such as "Principles governing the Norms of trade and industry", "Recognized Practices and Known Procedures"   and the like are cited and the last is 3- domestic laws.
Confidentiality/ "Contractor's responsibility in equipping and preparation"/ "Commitment to cooperate with other contractors"/ " "Presumption of damage due to the delay of the contractor in fulfilling his obligations."/ "Indemnification of the parties to the contract from consequential (indirect) damages"/ "Compliance with accepted requirements" Regarding safety" HSE /"Distribution and  risk allocation between the  Company(employer) and the contractor" and "Permissibility of the contract towards the employer in daily and in-depth contracts" are among these rules. Of course, this list can be completed or changed in different circumstances. Today, in cross-border and international commercial and industrial activities, more than local and domestic factors, the nature and specific requirements of these activities, as well as the major players in these fields (multinational companies and specialized institutions) play a role.

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Main Subjects

References

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Journal Of Researches Energy Law Studies
Volume 8, Issue 2
March 2023
Pages 355-377

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