Background and Industry Relevance Why are oil and gas concessions and agreements still relevant in the changing energy landscape? The author submits that Middle East oil is not dead. Here is why. A recent article: ‘The US Shale Oil Boom: Potential Impacts and Vulnerabilities of an Unconventional Energy Source’, a policy briefing from Harvard Kennedy School written in June of 2013 states that the US may become the biggest oil producer in the world in a few years. This will drive OPEC oil prices down and create economic problems in OPEC countries who consume as much oil as they export. Their oil income is losing value, causing a greater gap in funds for their low cost subsidies. This will lead to a need to develop infrastructure for renewable energy sources. This means high risk contracts. Adjudicatory risk in energy contracts is going to be a key issue. The legal principles and lessons learned from oil concession disputes are applicable to renewable energy agreements. The history of oil concessions led to mistrust on the side of Arab parties but Gulf Cooperation Council states like Saudi Arabia which has recently reformed its international arbitration law to make it legally binding offer significant hope. The United Arab Emirates will also be highlighted. These legal reforms will support an improved regulatory framework that will facilitate renewable energy agreements. An understanding of the different types of oil agreements such as production sharing, joint ventures or concessions means a better understanding of the differing types of risks. Some types of contracts have higher risks than others and this will be exacerbated with inherently higher risk renewable agreements.

Changes in global financial markets and the energy industry offer major challenges and opportunities for the Gulf Cooperation Council states for decades to come. Changes in energy are intertwined with changes in global financial markets. The shift in relying on shale oil from the United States is the world’s most important matter in the energy sector, cutting across multiple legal disciplines, requiring expert advice. Shale oil exports by the US will increase trade agreements and concessions between the US and importing countries. Matters related to infrastructure projects will require excellent pre-negotiation and contract drafting.