Petroleum Resource Management: How Governments Manage Their Offshore Petroleum Resources by John A.P. Chandler Published by Edward Elgar, 2018, 379 pp., £110, hardback.

• Date: 01 July 2019
• Published date: 01 July 2019
• Author: Maria Madalena das Neves
• DOI: http://doi.org/10.1111/reel.12298

    

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BOOK REVIE WS

DOI: 10 .1111/reel .12298

PETROLEUM RESOURCE MANAGEMENT:

HOW GOVERNMENTS MANAGE THEIR

OFFSHORE PETROLEUM RESOURCES by John

A.P. Chandler

Published by E dward Elgar, 2018, 379 pp., £110, ha rdback.

Chandler’s Petroleum Resource Management results from a research

project whos e purpose is to iden tify and expl ain common thre ads,

strengths and weaknesses of different governmental policies and

approaches to offshore petroleum resource management. As part

of a larger researc h project, t his book offer s a comparative an aly‐

sis of the policies a nd approache s used by Austra lia, Norway an d

the United Kingd om. The autho r’s rationale for f ocusing on thes e

countries stem s from the fac t that they share a nu mber of com‐

monalities: al l three use a licensi ng system, non e is a member of

the Organization of the Petroleum Exporting Countries (OPEC),

many of the offshore‐producing fields are reaching maturity, many

of the offshor e resources are located in a reas subject to challen ging

and harsh condi tions, and their offshore p roduction took off in the

1970s .

The book succee ds in conveying a compr ehensive pict ure that

allows the reade r to easily under stand the sig nificant feat ures of

each jurisdic tion. In Chapters 2–4, the autho r reviews the licensing

systems of the three countries, examines their regulatory structures

and methodologies, introduces the key actors in petroleum activi‐

ties (regulators and the companies), and discusses how regulators

with varying styles and companies with changing compositions and

varying strategies affect the management of petroleum resources.

In Chapters 5 and 6 , the author foc uses on the econ omic side of

petroleum ac tivities and expla ins the approaches of th e three coun‐

tries in relatio n to resource rents, taxat ion, economic recovery an d

good oilfield practice. These chapters also expound the relationship

between the stewardship obligations of the respective States, as

well as their chose n approaches t o reaping the econ omic value of

petroleum resources. Chapter 7 provides an overview of the evo‐

lution and key aspe cts of the reso urce management p olicy of the

three countrie s, while in Chapter 8 the focus shif ts to production‐

sharing contracts, for which Chandler offers a comparison with li‐

cences. In Chapte rs 9–11, the author examines dif ferent stages of

offshore petroleum activities, namely exploration, development

and product ion. Chapter 12 focuses on eff icient use and access to

upstream infr astructu re. Finally, in Chapte r 13 the author off ers

succinct and f air conclusions o n the strengt hs and weaknes ses of

the three jurisdictions, before discussing several aspects influenc‐

ing the future of offshore petroleum resource management.

At first glance , the author’s ch oice to focus on thes e specific

countries and their approaches could seem limiting, and some read‐

ers could ques tion the value of co mparing thre e jurisdictio ns that

have adopted simila r approaches to p etroleum res ource manage‐

ment and which are s imilarly mature. In effec t, while the book con‐

tains a chapter on p roduction‐sha ring contracts a nd provides several

examples of othe r jurisdicti ons and approac hes to counterpo int or

put into context so me of the author ’s views, these asp ects are not

the main focus of th e book. Neverthe less, if readers req uire in‐depth

insights on othe r jurisdicti ons and other form s of upstream pet ro‐

leum contrac ts with the State (such as pro duction‐sharing cont racts

or risk‐service agr eements), there is a vas t body of literature tha t can

easily complement this book.1 

The value of this bo ok lies in the fact that it d elivers more than a

mere description of the key elements of the resource management

policies of Aust ralia, Norway and the United K ingdom, and of their

respective offshore petroleum licensing systems and regulatory

frameworks. While reviewing and comparing the relevant policies

and regulations, Chandler delivers insightful commentary on the

good governance of petroleum resources, provides a perceptive

appraisal of th e shortcomin gs and soundne ss of the policies a nd

petroleum regimes of the three countries, and outlines useful rec‐

ommendations o n how to improve thes e identified sh ortcomings .

Moreover, the author m anages to convey the pr actical as pects of

petroleum resource management and of the interaction between

States and the lic ensees on the bas is of numerous inter views con‐

ducted with government officials, regulators and companies.

In addition, wh ile there are seve ral commonalit ies across the

three jurisdic tions, there are sti ll differences that wa rrant the closer

attention give n by the author. These in clude differ ences in how

each country d efines its national intere sts and its stewardshi p role,

in the degree of par ticipation of the Sta te in the petroleum ac tivities

and the State’s owner ship role, in the approac hes to recovery of the

State’s share of econom ic rent, and in how e ach country le ads its

resource polic y and manages its petrol eum resources in pract ice.

This book also sh eds valuable lig ht on a series of incre asingly

important issues, particularly on how States should adjust their

management of off shore petrol eum to meet the cha llenges that

petroleum exploration and production are currently facing. That

is, the book pla ces petroleum a ctivities an d State manageme nt in

the context of clim ate change mitigation obligatio ns, energy tran‐

sition, protec tion and prese rvation of the e nvironment, s ustain‐

able development, depleting offshore resources, price instability,

accountabilit y and social pr essure. The boo k therefore make s a

particularly interesting contribution by stimulating the reader to

question how Au stralia, Norway a nd the United Kingdom re concile

– or fail to do so – thei r stances as of fshore petrol eum produc‐

ers and expor ters, their climate and environm ental concern s, and

1 See, among st others, T Hun ter (ed.), Regulati on of the Upstrea m Petroleum Sec tor: A

Comparative St udy of Licensin g and Concessio n Systems (Edward E lgar 2015); M Mazee l,

Petroleum Fis cal Systems and Co ntracts (Dipl omica 2010); and S Tord o, D Johnston and D

Johnston, Petroleum Exp loration and Pr oduction Righ ts: Allocati on Strategies and D esign

Issues (World Bank 2010).