Commercial Law And The Oil And Gas Sector
Commercial law is fundamental in running the oil and gas industry since it modulates the activities within the sector. As the spine of the oil and gas industry, the commercial law is fractioned into several facets that broadly touch on various aspects of oil and gas. Commercial law is critical in the facilitation of the commercial transactions within the sector. It demarcates the boundaries of operations in the sector and creates structural legal edges onto which the industry operates. This paper seeks to outline the role of commercial law as a factor in facilitating trade in the industry
Spectrum of commercial law in oil and gas industry
As pointed out earlier, these areas entail the following
- Exploration of oil and gas
- Processing of the commodities
- Distribution of oil and gas
- Sales and even the human resource hiring in the sector
One of the key commercial drivers of the oil and gas industry is “contract negotiation.” The industry entails plenty of negotiations that are governed by the business law. Interpretations of these extensive contracts and drafts in the industry require legal knowledge as enshrined in the precepts of commercial law. From exploration contracts of oil and gas to financial contracts, the provisions entailed in the commercial law are quite instrumental in streamlining the industry.
Regulation of the procurement process in the oil and gas sector is equally regulated by the precepts of commercial law. Procurement purchases within the sector are vast and must be protected within the law. The tenets of commercial law transcend contract negotiations to safeguarding the purchases required to support the gas industry. Such procurement services entail the elaborate law on insurance. Commercial law plays an integral role in providing an oversight role in the procurement of both goods and services thereby mainstreaming the industry.
It is admissible to note that one of the most fundamental roles of commercial law in oil and gas sector is to outline the regulatory principles as entailed in the law. These include issues of taxation, environmental conservation, and human resource management. In the oil and gas sector, these three aspects of commerce (tax, environment, and HR) play a considerable role. It is, therefore, accurate to conclude that there is a logical progression on the significance of commercial law in facilitating the oil and gas industry
The contribution of commercial law to the transactions in the oil exploration sector is vast. The provisions of the business law are instrumental in regulating a number of critical processes in the sector. These processes are considered the “towers” of the industry and so a deeper understanding of commercial law would be imperative in the sector