Legal Risk Control Studies On International Petroleum Contracts

Highly Attention shall be paid by China Petroleum enterprises on legal risk control and management when they go aboard and develop cooperation with governments of resources countries and/or national oil companies of resources contries.This paper believes that international petroleum contract as the foundation of procuring the international oil and gas project and project operation has the features of inequality and instability.Therefore,there are 3 key legal risks including but not limited to nationalization,requisition,forced change of cooperation and profit sharing scheme,limitation on foreign entities' managerial authorities.Fending off and controlling the said 3 risks require China petroleum companies to take measures from macro and micro levels.From Macro level,firstly,setting up analysis mechanism on legal system of the resources country;Secondly,actively cope with legal changes in the resources country;Thirdly,create an environment beneficial for cooperation with governments of resources countries;Fourthly,uphold the cooperation concept of mutual benefit and co-development.From Micro level,i)Due diligence shall be conducted deeply and thoroughly on any international oil and gas cooperation project;ii)stability clauses shall be insert reasonably and flexibly in international petroleum contract.This paper state from the major features of franchise contract,production sharing contract,joint venture operation contract,service contract to analyze legal risks raised when China oil companies dealing with international petroleum contract;to summarize main terms in the contract.This paper comes up with major legal risks which shall be highly focused,also highlighted major disputes risks in the area of Politics,law,society,project operation and management,labor,HSE.In conclusion,key matters shall be given high attention to when execute international petroleum contract,only by combining the macro and micro polices,can the China oil companies control the legal risk when conducting international petroleum contract.