Stronachs Logo

Oil & Gas

“Intelligence is about being open minded”, the late, great Irish sports writer Con Houlihan once said.

It has long been the case that human activities produce large amounts of records of what has happened and of what people have said and done. Now that so much of what people do and say is done through connected electronic devices, and so much of what happens is monitored electronically, more and more data is produced, and it is easier than ever to gather very large amounts of that data. This is further facilitated by the availability and cost of storage capacity. Taken together with the availability and cost of computing power, it is easier than ever to store and process huge volumes of data.

Parties to a contract often include provisions setting out what will happen in the event of a breach by one of them. They may for example include a provision stating that the party in breach must pay the 'innocent' party a sum of money by way of 'compensation'.  It is however, a well-established principle of contract law that where the contractual provision provides for a sum which has the intention of penalising the wrongful party rather compensating the loss that could actually be suffered by the innocent party, the clause could be deemed an unenforceable penalty clause.

The Scotland Act 2016 received Royal Assent on 23 March 2016.  It provides for a range of devolved powers to Scotland. It is important that those working in the UK energy industry are aware of what aspects of energy policy are becoming devolved and the practical impact this may have on Scotland’s oil and gas sector.

‘Drones’ is the word commonly used to refer to UAVs, or Unmanned Aerial Vehicles. They are also known as Remotely Piloted Aircraft Systems (RPAS) or Unmanned Aerial Systems (UAS). It was in the 1930s that remotely controlled aircraft started being used as targets for gunnery practice. After World War Two there was a gradual increase in their use for military reconnaissance purposes, which has increased dramatically in recent years as telecommunication technology has advanced. However, it is only very recently that significant non-military uses of drones have been made, both for leisure and a growing number of commercial applications.

I recently attended an introductory lecture by an economics lecturer from the University of Edinburgh who sagely remarked, ‘I can predict that oil and gas prices will go up and down but I cannot tell you when or by how much’. Very helpful. There are a number of traders and economists who have given predictions on the oil and gas price to the end of 2017. They vary from $35 up to $80 with the median around $60 for Brent crude by the end of 2017 (The Times, 28th December, 2016). Mitsui Bussan Commodities Ltd. gave a Q4 2017 offer price of $58.85 per barrel (on 29th December, 2016). Given the general failure to predict the oil price slump of 2014-2016, I would not place investment decisions for the future in the hands of economists. The fundamentals for investment may be more important at the moment than guessing a forward price.

On 30 November 2016, the Scottish Law Commission (‘SLC’) published a discussion paper on penalty clauses as part of its current review of contract law in Scotland (‘2016 Discussion Paper’). It has been a long standing principle of Scots law (and the law of England and Wales) that penalty clauses are unenforceable. Identifying a need for review of this area of the law, SLC previously published a discussion paper (1997) and report (1999) on the issue which set out proposals for reform. However, following a consultation on a draft Penalty Clauses (Scotland) Bill (which took forward the recommendations made by the SLC) the Scottish Government determined that further work was required in relation to this area of the law.

Chambers UK 2018

Contact Info

ABERDEEN OFFICE
28 Albyn Place, Aberdeen AB10 1YL
Tel: +44 1224 845845

 

INVERNESS OFFICE
Camas House, Pavilion 3, Fairways
Business Park, Inverness IV2 6AA
Tel: + 44 1463 713225

The Legal 500 logo