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Sources of business disputes in the oil and gas sector

On Behalf of | Dec 12, 2023 | Oil & Gas Law

The oil and gas sector in Oklahoma is substantial, with billions of tax revenue being generated every year. This means many people working together in cooperation, but there are also occasions when disputes arise.

The following are some of the most common causes of business disputes in the oil and gas sector.

Contract concerns related to the exploration process

Oil sources don’t last forever, which is why exploration is a significant focus of oil and gas companies. A new site could be prosperous both for the business and wider community. Nonetheless, it’s not as simple as oil companies exploring any territory that they like.

Exploration of oil and gas is largely dictated by exploration agreements or contracts. Generally, an oil and gas company makes annual rent payments to a land owner and compensates them in turn for being able to produce oil and gas from the minerals on their land. Without a valid exploration contract in place, legal disputes can arise.

Environmental and nuisance complaints

Oil and gas are vital sources of fuel but there are controversies surrounding the impact they have on the environment. Oil production should not be unnecessarily wasteful. The production of oil should also not interfere unjustly with local communities who live nearby production sites or oil and gas company resources. Environmental and nuisance claims are a common source of legal disputes that oil and gas companies must frequently address, given the sensitive and consequential nature of the work that they do.

Having legal guidance on your side can help ensure that your company is legally compliant and avoids disputes, whenever possible. Should a dispute arise, you’ll also be suitably placed to resolve it efficiently with the right support in place.