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Climate change activism presents 'significant risk' for oil and gas companies

Climate change activism presents 'significant risk' for oil and gas companies

 

A survey of senior oil and gas sector legal managers has revealed a substantial number believe net zero actions, by shareholders, investors or activists, present a ‘real risk’ to their business.

The Oil and Gas Disputes Survey, conducted by law firm CMS, identified these and other forms of climate change activism as the biggest issue of concern - with 37% of respondents saying they represented a significant threat.

Protestor disruption to offshore and onshore worksites was listed as the second most pressing area of concern, with 26% of respondents saying it was a real risk for their company or company group.

The survey was based on more than 50 responses from senior legal managers and senior in-house counsel in the oil and gas industry across Europe, the Middle East, Asia Pacific, Africa and Latin America.

It found that 37% of all respondents, and 50% of those operating there, identified the UK Continental Shelf as the global region with the greatest risk of disputes arising.

Projects, joint ventures and dealings with host nation states were seen as the main factors behind oil and gas legal disputes.

The survey also indicated that more could be done to prevent them, highlighting a number of areas where disputes could be mitigated - including managing change in projects; better understanding of local market factors prior to project execution; and better record keeping.

Valerie Allan, an Aberdeen-based partner and energy legal specialist at CMS, said: “Currently the industry is defending an ever-growing list of climate change cases as activists begin to be more assertive, often through judicial review challenges.

“In 2020, several judicial reviews were brought by environmental campaigners seeking to limit or prevent oil and gas exploration activity.”

Phillip Ashley, a London-based partner on CMS’s energy team, added: “Just as the industry is evolving and shifting according to economic, geopolitical and social changes, so too are the means of addressing risks and minimising the chances of disagreements.”

Source: insider.co.uk

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Published: 31-03-2021

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