Recent Trends in Upstream Petroleum Agreements: Policy, Contractual, Fiscal, and Legal Issues

Abstract

This chapter gives insights into the three main types of petroleum exploration and exploitation (upstream) agreements used in the world, summarizing how their selection depends on the petroleum policy selected by the country, their main characteristics, and their respective advantages and drawbacks from the point of view of the host country and the oil and gas company. It describes the main changes that occurred during the last few decades to each type of contract. Special attention is devoted to the principles behind the fiscal system of each type of upstream contract, including the different components of government revenues. It analyzes the introduction of more progressive fiscal systems, showing their importance in fostering sanctity of contracts and why they are required in particular when an oil company desires to benefit from a fiscal stabilization clause.