Reflections on the law applicable to international oil contracts

Abstract

Business activity in the hydrocarbon sector, involving the extraction of natural resources essential to maintain our modern lifestyle, begins with the negotiation of oil and gas exploration and exploitation contracts. Apart from the traditional role of the parties’ contractual autonomy, determining the legal regime of these contracts necessitates considering the role of international law, the development of oil sector-specific international rules (lex petrolea), and the impact of the imperative norms of national legal systems, especially in expropriation cases and in those situations in which investments or commercial transactions in a particular State are subject to limits or prohibitions relating to economic coercion measures.