Legal Validity Analysis of Concessions Agreement in Underground Gas Storage in Depleted Reservoirs

Abstract

The development of Underground Gas Storage (UGS) in depleted hydrocarbon reservoirs has always been a priority for industrialized countries. This is mainly because UGS helps in balancing the seasonal supply and demand of gas, managing reservoirs efficiently over time, ensuring the security of gas supply, and fulfilling international contractual obligations. Providing a legal platform and an attractive contract model is crucial to encourage private sector participation in this strategic industry and accelerate UGS development. Concession arrangements are one of the most commonly used and attractive models for UGS development. However, the main question of this research is whether the use of concessional agreements faces any legal prohibitions. To answer this question, the legal challenges facing the application of this contractual model in the oil fields development have been investigated. In this regard, the research verifies whether this industry is upstream or downstream from the legal point of view, and considers the opinions of prominent jurists. After analyzing the unique features of the storage industry, the essential differences between UGS and the traditional development of oil fields, and especially the governmental ownership of the gas that is injected, the conclusion is that the use of concession agreements is allowed

Keywords

• concessions agreement
• depleted reservoirs
• public ownership
• underground gas storage
• upstream