Baker Botts Energy Litigation partners, Russell Lewis and Kevin Jacobs provide several points on upstream and midstream disputes to focus on in 2019.
In The Year To Come, Upstream Exploration And Production (E&P) Companies Will Face Numerous Legal And Regulatory Risks Arising Out Of Day-To-Day Operations:
- Continued uncertainty in oil and gas prices creates an environment ripe for contractual disputes, as joint ventures and operating partners assess the economic viability of their projects and historical obligations. This is especially true in the offshore space, where projects have longer lead times and higher investment costs. There may also be more disputes between lenders and borrowers in the energy industry.
- For onshore companies, landowner disputes – seeking damages and monetary recovery beyond that provided in lease agreements -- have become increasingly common as more attention is placed on non-traditional methods of resource recovery such as hydraulic fracturing.
- While the current administration has rolled back certain federal regulations, state and local governments continue to fill the void by reassessing standards for E&P activity, including setback requirements for oil and gas wells and pre-drill survey and testing regulations.
- Congestion in the Permian Basin will continue, and there will more challenges in getting hydrocarbons to market, whether by rail, pipeline or otherwise.
- New issue may arise in the exportation of oil and gas, with the United States becoming a new exporter of liquid hydrocarbons and with new LNG facilities coming online, in a world with increasing global trade disruptions.
Baker Botts' Energy Litigation practice handles disputes involving all aspects of the exploration, production, distribution, and marketing of energy products.
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