Environmental Responsibilities of Local Governments as PI Holders in Upstream Oil and Gas Operations

Abstract

Allocating participating interest (“PI”) is crucial for managing upstream oil and gas operations as it determines the rights and obligations of contractors, including their responsibility to ensure health, safety, and environmental awareness under the regulatory framework, production sharing contract (“PSC”) or operations agreement (“OA”). This paper examines the role of local governments as 10% PI holders towards promoting environmental compliance and ensuring sustainable oil and gas development. The research adopts a juridical-normative approach by reviewing secondary data sources and academic literatures in order to identify specific forms of environmental responsibility available to local governments as 10% PI holders under the progressive law doctrine, relevant regulations within the context of upstream operations and provide recommendations to improve their effectiveness in fulfilling their environmental obligations. The findings contribute to the sustainable management of the sector by providing valuable regulatory insights into the environmental responsibility of local governments as 10% PI holders.