In order to understand the Oil & Gas regimes, one must first study property regimes that had a strong influence on the Oil & Gas sector; Until very recently this sector in most countries was characterized by state control and that was because the Oil & Gas industry is strategically relevant for the economies of those countries so most countries tend to classify onshore Oil & Gas resources as State ownership such as Norway, Poland, Spain, Uk.
States have used many property regimes in the energy sector, such as the licensing system where the administration grants rights to exploration and exploitation to a licensee which gives the license some security as it cannot be changed arbitrarily and it includes the exploration period, the delimitation of area, the exclusive right to explore and produce and usually this comes with the obligations of the licensees to pay duties,
that the licence is personal and cannot be transferred and that the stat has a supervisory role. other types include State participation and public ownership, private ownership, PPPs, in the US different Oil & Gas ownership method apply, such as private ownership where in some jurisdictions oil in situ is not recognised and ownership occurs when oil is produced and reduced into possession,
in other jurisdiction absolute ownership and the rule of capture apply when a land owner extracts oil from a well within the subsurface of his land and acquires ownership even if the oil is drained from another landowner's surface, they are not co-owners, this was applied in the US case of Kelly v Ohio oil co. where it was recognized that oil can move from one well to the other until captured by a person.
Another theory is the qualified ownership, applied in California and Indiana, all the owners of a common reservoir are collective owners with equal rights and the exploration & exploitation is granted to a miner through mining leases.
where a State who is the owner of the energy resources grants rights under licences or leases, these were the earliest forms of agreements between governments and companies there time period was of long duration in return for the payment of royalties and involved the transfer of sovereign power and vast territories to foreign companies and favored the foreign-owned company and they did not survive the new international economic order.
An example of the new concessions is the one entered between the Kingdom of Abu Dhabi with multinational enterprises where these companies are granted exclusive rights to explore, search, drill for, produce, store, transport and sell Oil within a territory for a period shorter than those designated in old concessions, but still for a long term of between 35 and sometimes 50 years.
The State by agreement/contract gives an oil company the rights to explore and produce. the ownership of the oil is that of the State, the oil company bears the risks of exploration, a portion of the first oil extracted is allocated to the company to recuperate its costs...this is called COST OIL and it is usually limited is percentages per year, PROFIT OIL is divided between the State and the Oil company usually 80% for the State & 20% for the company, but the percentages vary according to international oil prices or the production rate. COST RECOVERY OIL is the portion of oil that the contractor can dispose of by freely exporting for recouping its taxes, but some restrictions are met like the right of the State to purchase the cost recovery oil at market price.
The State in agreement with the oil company gets participation interests in exploration and production within its territory, percentage is negotiated between the parties to the JV, and sometimes the percentage is fixed by legislation. partners to the JV contribute in the cost and shares, benefit or losses, normally there is a "participation agreement" and an "operating agreement".
The oil company searches for oil at its own expense and risk, if found, the extraction is also at its own cost; the oil company is paid a fee for the services and may be able to recover the exploration and production costs from the sale of oil, the remaining oil is property of the state. there are 2 types of Risk service contracts, the first is where the oil company provides all the risk and fees for the exploration and production, if no oil is discovered, the State does not have an obligation to pay and the contract ceases to exist, if oil is found the company gets paid and recovers costs from oil; the other type is the PURE (non-risk) service contract where the contract is a pure and simple service contract and the risks and cost are borne by the State and the contractor (the oil company) is paid a flat fee for the services rendered, these types of contracts are applied in Kuwait, Saudi Arabia, Qatar, Bahrain, and Abu Dhabi...
The 1982 United Nations Convention on the Law Of the Sea (UNCLOS) allows coastal States to enjoy sovereign rights on all marine resources living and non-living on the seabed, subsoil,subjacent waters up to 200 NM irrespective of the presence of the continental shelf. in international law and according to article 60 of UNCLOS a coastal State ha the right of authorization and regulation over the construction and operation of the installations and structures/ artificial islands in the Exclusive Economic Zone (EEZ) or on the continental shelf, wind turbines and production platforms included. Concerning submarine cables and pipelines, on the continental shelf article 79 of UNCLOS gives coastal States control on the laying of cables and pipelines and also the right to give consent to delineate the course of the pipeline, including the right to reduce, control, prevent pollution. As for abandonment of the oil platforms, article 60(3) of UNCLOS speaks of general obligation of the entire removal of the platforms, although removal is only required under UNCLOS when the platform impacts on freedom of navigation & environmental protection.
The Offshore Petroleum Resources Law (OPRL) – Law 132 24/8/2010 - applies to petroleum activities within territorial waters and waters of the Exclusive Economic Zone (EEZ) in connection with Hydrocarbons subject to Republic of Lebanon jurisdiction. The OPRL regulates reconnaissance, exclusive petroleum rights and the exploration and production agreement between the Lebanese State and the right holders. According to this law the Lebanese Sate reserves the right to carry out or participate in petroleum activities. The proceeds arising out of petroleum activities shall be placed in a sovereign fund.
The Petroleum Activities Regulations (PAR) present the applications decrees for the Offshore Petroleum Resources Law (OPRL) that covers several rules stipulated in the Law. The PAR provides the regulations pursuant to conducting petroleum activities including: the legal representation of the right holder, the management system, the general duties of the operator and the right holder, the strategic environmental assessment, the exploration and production rights, the petroleum production and transportation, the cessation of petroleum activities and decommissioning, and other activities. The Decree no. 1177/2017 dated August 3, 2017, amended the Decree no. 10289/2013 dated April 30, 2013 (Petroleum Activities Regulations)
On the 14th of December 2017 the Council of Ministers had approved the award of two exclusive petroleum rights in blocks 4 and 9 to the consortium composed of Total S.A – Eni International BV – JSC Novatek. Energy Law in Lebanon, Oil & Gas in Lebanon, Oil & Gas
On the 14th of December 2017 the Council of Ministers had approved the award of two exclusive petroleum rights in blocks 4 and 9 to the consortium compoEnergy Law in Lebanon, Oil & Gas in Lebanon, Oil & Gas contractssed of Total S.A – Eni International BV – JSC Novatek.