© 2013 The Texas Lawbook.
By Mark Curriden, JD
Senior Writer for The Texas Lawbook
The Middle East and Northern Africa continue to be extraordinarily tempting to U.S. oil and gas companies, but political volatility in the region is preventing many energy firms from making significant financial investments.
Three of Texas’ leading oil and gas legal experts – Hunt Oil Chief Financial Officer and former General Counsel Dennis Grindinger, ConocoPhillips Senior Legal Counsel for International Operations Harry Sullivan, and SMU Dedman Law School Energy Law Professor John Lowe – told a group of international lawyers gathered in Dallas that MENA is still one of the regions that offers huge potential for investments by major U.S. energy companies.
Lowe, Grindinger and Sullivan spoke to a packed audience in a program sponsored by the American Bar Association Section of International Law and the SMU Dedman School of Law.
“Fifty percent of all proven oil reserves and 30 percent of all proven natural gas reserves are in the Middle East and North Africa,” says Lowe, who is widely recognized as one of the leading oil and gas legal educators in the U.S. “If you are interested in finding oil and gas, the Middle East and North Africa is still one of the first places you look.”
Grindinger and Sullivan agreed, but said that companies like theirs are taking a wait-and-see approach regarding the continued unrest following the so-called Arab Spring.
“When you have political turmoil, it makes companies very nervous,” says Sullivan, a lawyer for ConocoPhillips who lives in Dallas but spends most of his time overseas. “We invest based on opportunities, but it is more complicated when regimes are unstable.”
“We study every country and do an analysis and one key question is the stability of the rule of law,” says Sullivan.
Grindinger says that regimes in 38 countries have been declared unstable by international authorities and half of those are in MENA.
“We are looking for regimes that share our interests and values,” says Grindinger. “We negotiate with countries that abide by various human rights principles.”
“I have a book on my desk right now on Nigerian anti-corruption that prohibits gratification,” says Sullivan. “I’m not sure what gratification is yet.”
Grindinger says lawyers working for Hunt Oil know to include every possible contingency, including regime change and changes to law.
Sullivan says one thing people must know: seldom are contracts written to be enforceable under English law. He says he is constantly surprised at the applicable law in different countries’ contracts.
“In the biggest oil contract ever signed in Azerbaijan, the controlling legal authority is, as you might expect, Azerbaijan law, except where it conflicts with the laws of England,” says Sullivan. “And then, the controlling law is that of Alberta, Canada.”
© 2013 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.
If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is to provide content that is 100% true and accurate. Thank you.