Creative Commons

This study provides a comprehensive and thorough review of the essentials needed to deal with the disputes encountered in the international hydrocarbon sector. It begins with a succinct definition of hydrocarbons, explaining how their exploration forms a vast international industry, the oil and gas or petroleum industry. The study then analyzes the characteristics and particularities of the oil and gas industry, which render it not only one of the most vibrant and dynamic industries in the world, but also one of the most dispute-intensive. It explains the reasons why this sector has more disputes than any other business sector and discusses how parties can effectively manage that risk. The study covers the several types of oil and gas contracts, necessary for the comprehension of the petroleum industry’s particularities and as regards the legal framework governing these contracts, a section of the study is dedicated to the customary law comprising legal rules adapted to the industry’s nature and specificities, deriving from arbitral awards and oilfield practices and usages - ‘lex petrolea’. The study also covers the kinds of disputes addressed in the international petroleum industry, the types of dispute resolution mechanisms available and examines the reasons why parties in the industry avoid litigation by assessing its disadvantages. It then indicates the Alternative Dispute Resolution (ADR) techniques most preferably used by the participants in the industry, along with a thorough analysis of their characteristics and respective advantages. The analysis of these ADR methods continues through a specific reference to the Greek Model Lease Agreement for the exploration and exploitation of hydrocarbons in Greece, which provides for multi-tiered dispute resolution clauses, including three different dispute resolution mechanisms that must be exhausted at distinct and escalating stages. The study concludes by highlighting the importance of how to properly draft dispute resolution clauses and what to consider thereof, that the determination of the most appropriate dispute resolution clause should always be made on a case by case basis and finally, by highlighting the advantages of the current trend of the industrythe aforementioned multi-tiered dispute resolution processes, which indicate that arbitration and litigation are used as a last resort after exhausting more informal ADR methods.