Coping With the Impacts of Natural Disasters In the Petroleum Sector - a Legal Perspective

Undoubtedly, the energy sector and particularly oil and gas plays a crucial and vital role in the economic world. Contracts are one of the most important instruments for the energy sector, which provides legal order and clears rights and obligations of the parties to prevent any probable disputes. Natural disasters such as earthquake, floods, natural fires etc, are acts of God which cause losses of life, equipment and profits, and make parties fail to perform their obligations. The most sensitive area where this problem arises is with respect to the responsibilities, obligations and profits of the parties in those international contracts which are concluded between profit owners, even in different countries. Although they would try to precisely predict all the reasonable events, still some unpredictable events may happen which will certainly change the order of the contracts of the projects and cause some problems in the relationship between them. This paper attempts to find an appropriate approach to the problem by means of diagnosing the constraints and contributing factors. Therefore, it will explore the factors which affect the performance of such contracts. To achieve the above mentioned goals the present study first attempts to state the characteristics, conditions and legal impacts of such events in Iranian, English and French laws and will explore topics such as ForceMajeur. Moreover it will look at the subject in some judicial and arbitral judgments, and will study the related clauses in some of the contracts in the energy sector. Analysis of the topic will show that such events are recognized in the laws and the parties can consider some good and clear clauses in the contracts to prevent any problem. Thus, this paper will pave the way for other researchers for future studies.