The Law Applicable to Petrolume Contract

Abstract

As the oil industry is the largest industry in the world, and with the oil contract as the object of these activities, it is imperative to discern some of the issues surrounding it. Producing countries intend to maximize profits from the exploitation of their natural wealth, while consuming countries want to guarantee supply at the lowest possible price. It is important to understand the focus of conflicts in this sector. These are linked, on the one hand, to the need for oil, the decrease in new reserves and the increase in its exploitation. On the other hand, we have the political instability of the producing countries, the disrespect for the environment and social rights of the population on the producing States. This contract has the State and the investor as protagonists. They are often concluded under the aegis of bilateral or multilateral investment agreements between the producer country and the investor's country of origin. Since they are strategic natural resources, the producing State seeks to safeguard the interests of its population. Thus, it is common to include special clauses, maxime stabilization clauses and arbitration clauses. In its regulation, whether in the negotiation or conclusion stages of the contract or even in the dispute resolution phase, an appeal to International Commercial Law is required, covering both UNIDROIT principles and Lex mercatoria, configured here in Lex Petrolia.