Good Governance and Legal Challenges in Drafting International Oil and Gas Contracts
Keywords:
Good governance, international oil and gas contracts, transparency, accountability, contract theory, risk distributionAbstract
The oil and gas industry, as one of the strategic sectors of the global economy, plays a pivotal role in economic development and energy supply. In Iran, the high dependence of the national economy on oil revenues makes the efficient management of this industry imperative. This article focuses on the concept of good governance and examines the legal challenges in drafting international oil and gas contracts, while proposing solutions to enhance the structure of such agreements. Good governance, through principles such as transparency, accountability, rule of law, and public participation, can reduce corruption, attract investor confidence, and ensure resource sustainability. The identified legal challenges include conflicts between national and international laws, information asymmetry, corruption, international sanctions, complexities in negotiations, environmental issues, and weaknesses in contract enforcement. These obstacles hinder the realization of good governance principles and affect the effectiveness of contracts. Contract theory and risk distribution frameworks provide theoretical foundations for analyzing these challenges and emphasize the importance of balancing interests, flexibility, and transparency. International experiences, such as those of Norway and Canada, demonstrate the success of good governance in sustainable resource management, while examples like Nigeria and Venezuela reveal the consequences of weak governance. The proposed solutions include improving the transparency of bidding processes, strengthening independent regulatory institutions, designing flexible contracts, joining international initiatives such as the Extractive Industries Transparency Initiative (EITI), involving local communities, employing modern technologies, enhancing human capacity, and developing comprehensive legal frameworks. These reforms can increase the effectiveness of contracts and strengthen Iran’s position in the global energy market. The implementation of these solutions, especially under sanction conditions, requires political will and international cooperation to achieve sustainable and equitable development in Iran’s oil and gas industry.
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