Petroleum Resource Management, How Governments Manage Their Offshore Petroleum Resources.

AuthorDahl, Carol

Petroleum Resource Management, How Governments Manage Their Offshore Petroleum Resources, by John A. P. Chandler (Edward Elgar Publishing, 2018). 321 pages, elSBN: 978 1 78643 221 6; ISBN: 978 1 78643 220 9.

With the author's four decades of experience practicing law relating

to mining and petroleum development, this text is a well-researched and detailed comparison of offshore petroleum leasing systems. The stated objectives "include identifying common features, strengths, and weaknesses" of the offshore petroleum management systems in Australia, Norway, and the UK. All three countries issued their first licenses in the 1960s, before it was known if there were commercial quantities of petroleum (oil and natural gas), and there were no relevant comprehensive regulatory leasing models for offshore development. Other similarities in the three countries include the evolution of their regulatory systems as the industry and regulatory theory has evolved. The most recent challenges for all three include attracting investment in mature basins while protecting the environment, ensuring good stewardship of their resources, and maintaining social acceptance of oil and gas exploitation while transitioning to a low-carbon future.

Each of the countries has conducted recent studies relating to difficulties in oil and gas production, which are well-described and referenced throughout the book. Each also has a single statute governing their offshore licensing system with the most recent renditions of these statutes being Australia's Offshore Petroleum Greenhous Gas and Storage Act 2006, Norway's Petroleum Act 1996, and the UK's Petroleum Act of 1988. These acts and all major provision of each country's governance system for conventional offshore oil except decommissioning are covered in the text.

Chapter 2 contains an overview of provisions for licensing systems in general as well as more particularly those in Australia, Norway, and the UK. Typically coastal countries claim undersea mineral resources within 200 nautical miles of their continental shelves. If countries do not have a national oil company, they prefer licensing systems, where the state relies on the private sector to explore and develop its resources and does not put its own capital at risk. The state identifies regions to lease and develops criteria and procedure for awarding and supervising licenses. Throughout the book, the author emphasizes that in developing successful procedures to attract capital, the license rewards must be commensurate with the risks. In addition, government resource managers need to take into account the interdependencies that can exist if one pool crosses lease boundaries. In such a case, the state would want to take advantage of any economies of scale that might be derived by cooperation across leases and also to prevent any inefficiencies in the production profile that might arise from the law of capture. Lastly, geological information increases as more work is done on leases. The state should consider ways to access and use this information for better resource management.

Chapter 3 deals with regulatory structures and regulators divided into: (1) commercial tasks and (2) regulations for protection of workers, the public, and the environment. To avoid conflict of interest, these functions are typically done by different regulators, and the chapter outlines who has these responsibilities in the...

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