Oil and gas disputes A significant proportion of international arbitration cases are energy disputes. It is expected that the energy sector will continue to generate a significant number of disputes in the years to come. This Practice Note will focus on the types of disputes that arise in the oil and gas sector, how to plan for a dispute, the different methods of dispute resolution available to parties and the key institutions involved in the process. Types of disputes As discussed in Practice Note: Arbitration in the energy sector—an introduction there are a wide range of disputes that arise in the energy sector. In Oil and Gas specifically, as set out in Practice Note: Oil and gas projects—contracts and disputes, disputes are often cross-border and frequently involve multiple contracts and parties. The disputes themselves are based on a wide range of issues including claims under joint operating agreements, cost recovery disputes, expropriation, environmental damage, property damage, service contract disputes (including disputes under drilling rig and

Below is a legal due diligence (LDD) checklist outlining some of the main issues to review during an oil and gas transaction. This list is intended to be a guide and as such is not a comprehensive list. Every LDD investigation should be specifically tailored to the proposed target and the underlying acquisition agreement (including, in particular, having regard to the scope of any warranties and indemnities provided therein, which will impact upon both the type and the extent of the LDD being required). For further practical guidance on the financing of energy, power and resources projects across a number of sectors, including those discussed in this Checklist, see also textbook: Energy and Resources Financing: A Practical Handbook. Corporate/Constitutional documents • All applicable constitutional documents including all amendments to the same • Organisational structure chart, including company whose business line is to be acquired (‘Company’), detailing a list of all entities and dates and jurisdictions of incorporation or formation • articles of associations/by-laws, certificates of incorporation and all amendments thereto • register of members/share transfer ledgers • list

This Practice Note provides an introduction to oil and gas joint ventures, including a synopsis of the main reasons for both entering a JV in upstream oil and gas projects, as well as the principal reasons for participants wanting to exit a project early. It also set out the key considerations and risks commonly associated with such an exit. Why are oil and gas projects sometimes structured as joint ventures? It is very common for an oil and gas project to be structured as a joint venture (JV), particularly so in relation to upstream projects (see: Upstream oil and gas—exploration and production—overview). This is for a variety of reasons, such as to: • better manage ongoing capital expenditures and distribute risk between different parties, which allows them to participate in high-value, larger scale projects (which they would not be able to access alone) • enable better access to capital funding • pool resources, skills and technology • diversify and strengthen a company’s portfolio in increasingly volatile markets • enter new markets and/or overcome

Upstream oil and gas projects based on a licence to explore, develop and/or produce hydrocarbons tend to be formed through a number of contracts, many of which contain arbitration agreements. They involve large investments being made and lead to projects (and so contracts) with long lives in which states and businesses have significant interests. Consequently, when disputes happen—like the investments to which they relate—they often concern large sums and are conducted under pressure to avoid any disruption to production. This Practice Note describes a typical structure for such a project, identifies the key contracts and the dispute resolution provisions that they normally contain and the types of disputes which can arise. It also briefly discusses some of the challenging issues that may be faced in resolving such disputes. This Practice Note should be read in conjunction with Practice Note: Arbitration in the energy sector. Structure of projects The diagram below provides an illustration of how upstream projects are often structured. The items in rectangular boxes refer

FORTHCOMING CHANGES: At Budget 2025, the government announced that when the energy profits levy comes to an end, it will be replaced by a permanent measure called the oil and gas price mechanism (OGPM), which is planned to be legislated for in Finance Bill 2026–27. The main features of the OGPM will include the following: • it will be a revenue-based tax and will apply to upstream oil and gas companies operating in the UK or UK continental shelf • a company will be in scope of the OGPM where it disposes of oil or gas and the consideration received (ie the realised price the company receives) for the disposal exceeds the relevant threshold. The thresholds for the financial year 2026–27 will be US$90 per barrel for oil and 90p per therm for gas. For subsequent years, thresholds will be adjusted using the preceding year’s CPI, and • the OGPM tax rate will be 35% The government has stated that it ‘will

Law360, London: An oil and gas company at the centre of a fraud scandal arising from an US$11bn arbitration award issued against Nigeria urged the UK's highest court 8 July 2025 to change the currency for Nigeria's legal costs, arguing that the country would unjustly benefit from the depreciation of its own currency.

Archived: This Checklist is archived and is no longer maintained. For information on criminal and civil enforcement of environmental offences, see Practice Notes: Environment Agency—powers to investigate environmental crime and Environmental

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note deals with the old controlled foreign company (CFC) rules that apply for accounting periods of CFCs that start before 1 January 2013. For a note on equivalent matters under the new rules see: CFC rules—calculating the CFC tax charge Once it has been established, in relation to a particular accounting period, that a company: • is a controlled foreign company, and • cannot apply one of the exceptions it is necessary to apportion: • the chargeable profits, as further explained in: Old CFC rules—chargeable profits, and • the creditable tax, as further explained in Old CFC rules—creditable tax amongst those persons who had an interest in the CFC at any time in that accounting period. This note explains the steps that need to be taken in order to: • make such an apportionment • identify who is subject to the UK CFC tax charge, and • calculate how much that charge will be Step 1—identify the

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note deals with the old CFC rules that apply until the first accounting period of a CFC commencing on or after 1 January 2013. For a practice note on similar subjects under the new rules applying from that date, see: CFC rules—calculating the CFC tax charge—Meaning of assumed taxable total profits and assumed total profits and CFC rules—the corporation tax assumptions. Under the CFC rules, it is necessary to calculate a company's chargeable profits in order to: • apply the lower level of taxation test in determining whether a company is a CFC (for which see: Old CFC rules — lower level of taxation) • determine whether a CFC can take advantage of the exception for de minimis chargeable profits under £50,000, and • determine the amount of any CFC charge The assumptions and requirements for calculating a company's chargeable profits are explained in this note. For details on applications to reduce the amount that is treated as chargeable profits

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note deals with the controlled foreign company (CFC) rules that apply for accounting periods of CFCs starting before 1 January 2013. For a note on creditable tax under the new rules, see: CFC rules—calculating the CFC tax charge—Step 2—determine the creditable tax of the CFC Once it has been established, in relation to a particular accounting period, that a company: • is a controlled foreign company, and • cannot apply one of the exceptions it is necessary to apportion: • the chargeable profits, as further explained in CFC chargeable profits, and • the creditable tax, which is further explained in this note amongst those persons who had an interest in the CFC at any time in that accounting period. Creditable tax A CFC's creditable tax is apportioned to the same persons to whom the chargeable profits are apportioned. A CFC's creditable tax is the sum of: • the double taxation relief amount • the income tax amount, and • actual

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note deals with the old CFC rules that apply until the first accounting period of a CFC commencing on or after 1 January 2013. For a practice note on similar subjects under the new rules that apply from that date, see: CFC rules—definitions of company and accounting period and New CFC rules—entity level exemptions: not subject to a lower level of tax. A company is a controlled foreign company (a CFC) in an accounting period if it is: • resident outside the UK, which is further explained in Definition of a CFC—residence • controlled by persons resident in the UK, the residence of controllers is further explained in Definition of a CFC—residence and the meaning of control is explained further in Definition of a CFC—control, and • subject to a lower level of taxation in the territory in which it is resident, which is explained further below Meaning of Company in

ARCHIVED: This Practice Note has been archived and is not maintained. This Practice Note deals with the old CFC rules that apply until the first accounting period of a CFC commencing on or after 1 January 2013. For a practice note on similar subjects under the new rules that apply from that date, see: CFC rules—definition of control. A company is a controlled foreign company (a CFC) in an accounting period if it is: • resident outside the UK, which is further explained in Definition of a CFC—residence • controlled by persons resident in the UK, which is explained further in this note, and • subject to a lower level of taxation in the territory in which it is resident, which is explained further in Lower level of taxation When assessing whether or not persons control a company, it is necessary to consider: • the specific CFC definition of control • the rules for joint control, and • the rules that attribute additional rights to a person in order to determine