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Energy Arbitrations in the Middle East

Introduction

The Middle East is synonymous with energy. It has just under half of the world’s oil and gas reserves. [1]

In terms of oil reserves, Saudi Arabia has the largest reserves in the region and the second largest reserves in the world. [2] Thereafter, the second-largest oil reserves in the region are in Iran (fourth globally), followed by Iraq (fifth globally), Kuwait (seventh globally) and the United Arab Emirates (UAE) (eighth globally). [3]

The Middle East is also the world’s largest oil producing region. [4] It accounts for more than a third of global oil production [5] and is responsible for roughly 34.5 per cent of global oil exports. [6] Saudi Arabia is the largest oil producing nation in the region (second globally), followed by Iran (fifth globally), Iraq (sixth globally) and the UAE (eighth globally). [7]

The Middle East is also home to the largest natural gas reserves in the world. [8] Within the region, Iran has the largest proved gas reserves (second globally), followed by Qatar (third globally) and then Saudi Arabia and the UAE (both tied at sixth globally). [9]

The region is the third largest producer [10] of natural gas in the world. In 2018, and notwithstanding the imposition of sanctions, Iran remained the largest producer of natural gas in the region (third globally), followed by Qatar (fifth globally) and then Saudi Arabia (ninth globally). [11]

This richness in resources and success in production and export has underpinned much of the economic development of the region in recent decades.

This is set to continue. Demand for energy is increasing both within the region and internationally. Current estimates are that global energy demands will increase by 25 per cent by 2040. [12] In line with this, the Middle East is likely to increase its oil and gas production. One estimate suggests that by 2040, oil and gas production in the region will have grown by 17 per cent and 60 per cent, respectively. [13]

Notwithstanding the significance of the size and proportion of its oil and gas resources, and not least because of the likely increase in demand for energy in the near future, the Middle East has begun to look to other sources of energy including nuclear, [14] coal [15] and renewables. [16]

As the nature of the Middle East’s energy resources expands, the nature and scope of disputes arising from projects relating to these resources will also be impacted.

Ownership and management of resources

Of fundamental importance in relation to the region’s energy sector, and disputes that may flow from it, are how rights to own and manage resources are allocated by local law and through various contractual structures involving the state, state-owned entities and international partners.

Ownership

As a starting point, natural resources in the region are, generally, owned by the relevant state. In Qatar, Law No. 3 of 2007 regarding the Exploitation of Natural Wealth and Resources, which regulates the ownership of the state’s natural resources, stipulates that natural resources are deemed the public property of the state. [17] Saudi Arabia, Kuwait, Bahrain, Syria, Yemen and Oman also vest ownership rights to natural resources in the state. [18] In the UAE, which is made up of seven Emirates, the Constitution stipulates that the natural resources and wealth in each Emirate are the public property of that emirate; that is, the energy resources of the UAE are not owned at the state level and, instead, each individual Emirate owns its own energy resources. [19] As a result, and for the most part, there is little dispute as to the ownership of a state’s resources in the Middle East.

However, there is scope for disagreement as to who may exercise that right on behalf of the state or its peoples. In Iraq, the state’s oil and gas resources are owned by ‘all the people of Iraq in all the regions and governorates’. [20] The federal government in Iraq takes the position that it is the sole representative of the people and has the exclusive right to explore, develop, extract, exploit and utilise Iraq’s oil and gas resources. The governing authority of the federal Kurdistan region of Iraq (the KRG), disagrees with this view and considers that it is the federal regions and provinces (as defined in the Iraqi Constitution) that have the right to explore, develop, extract, exploit and utilise Iraq’s oil and gas resources within their territories. While this issue could have been clarified with the entering into force of the Iraqi Federal Oil and Gas Law, which has existed in a draft form from as early as 2007, [21] its failure to come into effect continues to leave this issue unresolved.

The complexities surrounding the question of who has the relevant rights to explore, develop, extract, exploit and utilise Iraq’s oil and gas resources in the areas controlled by the KRG has led to disputes. For example, Iraq commenced an International Chamber of Commerce (ICC) arbitration, claiming more than US$250 million in damages, against Turkey and its state-owned pipeline operator, BOTAS, because, among other things, BOTAS purchased oil directly from the KRG, without consent from the Iraqi ministry. [22]

Management: The role of national oil companies

In respect of oil and gas resources, for the most part, states in the Middle East have created national oil companies (NOCs) to manage, at the least, their upstream requirements. Notable examples of NOCs include the following.

  • Saudi Arabian Oil Company (Aramco): Saudi Arabia’s state-owned national petroleum company that manages the upstream, midstream and downstream components of Saudi Arabia’s crude oil and natural gas. Aramco is the world’s largest oil and gas company. [23] Following its historic initial public offering (IPO) in 2019, it raised approximately US$25.6 billion and is now the world’s most valuable listed company. [24]
  • Abu Dhabi National Oil Company (ADNOC): Abu Dhabi, which has the vast majority of hydrocarbon reserves in the UAE, created ADNOC to manage, produce and preserve these reserves. [25] ADNOC manages approximately 95 per cent of the UAE’s proven oil reserves and 92 per cent of the country’s gas reserves. [26] ADNOC’s board of directors is the Abu Dhabi Supreme Petroleum Council, which is also responsible for setting and regulating Abu Dhabi’s petroleum related policies, objectives and activities. [27]
  • Qatar Petroleum: Qatar’s NOC manages upstream, midstream and downstream oil and gas operations in Qatar [28] and acts as the state’s investment arm in the oil and gas sector both domestically and internationally. [29]
  • Iraqi Ministry of Oil/Iraqi National Oil Company (INOC): INOC was reconstituted in 2018 [30] and a decree transferred the ownership of nine state-owned oil companies from the Ministry of Oil to INOC. [31] However, in January 2019, the law establishing INOC was challenged before Iraq’s Federal Supreme Court and was declared, in part, to be unconstitutional. [32] At present, the Iraqi Ministry of Oil continues to control and supervise the oil and gas exploration process in Iraq. [33]
  • Iranian Ministry of Petroleum: The Iranian Ministry of Petroleum controls all issues pertaining to the exploration, extraction, exploitation, distribution and exportation of crude oil and oil products with a number of NOCs (including National Iranian Oil Company, National Iranian Gas Company, National Iranian Oil Refining & Distribution Company and, the National Petrochemical Company) [34] that enter into contracts on behalf of the state.

These NOCs will, for the most part, enter into commercial agreements with private, often international, entities in order to assist with some or all of their upstream, midstream and downstream needs.

In respect of upstream arrangements, these agreements take a variety of forms. Middle Eastern countries use different types of structures for their upstream contracts. States are free to choose the type of contractual structure that suits their needs and reflects the strength of their bargaining position (with contracts sometimes developing as a hybrid of different forms). Structures that have typically been adopted in the region are:

  • concession agreements in the UAE, under which the state has permanent sovereignty to hydrocarbons and only grants legal title to petroleum to the international oil company (IOC) partner once recovered at the wellhead;
  • risk service contracts in Iraq, including technical service contracts for producing fields and production service contracts for development and producing fields under which the contractor is not entitled to any share of production, but can elect to have the service fee paid in kind in oil;
  • production sharing agreements [35] in the KRG, under which the contractor is entitled to a share of production to recover the costs of petroleum operations and a proportion of remaining production, which is shared with government;
  • exploration and production sharing agreements in Qatar, or, particularly in respect of gas projects, development and production sharing agreements; [36] and
  • historically, risk service ‘buy-back’ contracts in Iran, but recently (until the restoration of US sanctions) the Iran petroleum contract was being developed to adopt some of the features of a production sharing agreement in an effort to attract investors. [37]

The terms of these agreements vary significantly across states and, in some cases, within states themselves. They will generally, however, contain some form of dispute resolution clause.

The type of dispute resolution clause will vary depending on the relative strength of the parties and their sophistication and experience in dealing with disputes. For the most part, dispute resolution clauses in energy-related contracts typically provide for some form of arbitration. [38]

Arbitration of energy disputes in the Middle East

Types of arbitration

The precise nature of the arbitration agreements contained in the contracts between states or their NOCs, and the relevant counterparty, is often confidential. In the Middle East, few states make their model agreements, or the agreements once entered, publicly available. As a result, it is not possible to identify specific and clear trends in relation to arbitration agreements in energy contracts related to the Middle East. However, some documents are publicly available. From these, a preference for arbitration under the ICC is evident. [39]

Reflecting this preference, energy disputes accounted for approximately 13 per cent of the ICC’s 2018 caseload. [40] However, parties to energy agreements are not only choosing ICC arbitrations. In 2018, energy and resources disputes constituted 19 per cent of the London Court of International Arbitration’s (LCIA) caseload. [41]

Energy arbitrations involving Middle Eastern parties or otherwise relating to the region are also commenced through the investor-state dispute settlement processes found in bilateral or multilateral investment treaties (BITs and MITs).

Currently, there are 618 BITs in force in the Middle East. [42] Arbitrations under the ICSID Convention and the UNCITRAL Arbitration Rules are the most preferred options for investor-state disputes. [43] The popularity of ICSID arbitrations is reflected in ICSID’s caseload statistics. In 2019, 42 per cent of ICSID’s caseload involved the energy industry. [44]

Three notable MITs for the region are, the Organisation of Islamic Cooperation Agreement of Promotion, Protection and Guarantee of Investments (the OIC Agreement), the Arab League’s Unified Agreement for the Investment of Arab Capital in the Arab States (the Arab League Agreement) and the Energy Charter Treaty (ECT).

Both the OIC Agreement [45] and the Arab League Agreement [46] provide that, in certain circumstances disputes relating to them shall be resolved through arbitration. Neither agreement specifies any arbitral institution or rules. To date there have been 13 reported arbitrations relating to the OIC Agreement [47] and two relating to the Arab League Agreement. [48]

The ECT is notable for its lack of Middle Eastern state signatories. From the region, currently, only Jordan is a contracting party to the ECT. [49] However, Iran, Iraq and the UAE have signed the International Energy Charter, [50] which is often seen as the first step towards acceding to the ECT. [51] If more states from the Middle East do sign the ECT, a spike in the number of investor-state disputes brought against Middle Eastern states should be expected. [52]

Trends

Arbitration, the energy industry and the Middle East are all undergoing significant changes. Some likely key trends are discussed below.

Increasing Ties to the Relevant State Jurisdiction

There is an increasing desire among states and state-owned entities to ‘localise’ arbitration clauses where possible. The extent that this localisation of arbitration clauses will happen in practice will depend, in large part, on the nature of the deal, the parties and their relative bargaining power. An example of this localisation is found in Egypt’s model concession agreement. This model agreement requires that disputes are either dealt with in the Egyptian courts or, in respect of certain matters between the Egyptian General Petroleum Company and the relevant contractor, resolved through arbitration according to the rules of the Cairo Regional Centre for International Commercial Arbitration (CRCICA) and, unless otherwise agreed by the parties, the place of the arbitration will be Cairo. This requirement to use either the national courts of Egypt or arbitration under CRCICA is a clear step away from the use of the more traditional arbitral institutions. It will be interesting to see how far the Egyptian government will be willing to move in respect of adopting Cairo as the seat of any arbitration.

Jordan’s model production sharing agreement also demonstrates a desire to localise arbitrations. Unlike Egypt’s model agreement, Jordan’s model production sharing agreement does not require the use of any domestic arbitral institution (it refers to the ICC Rules). However, it does require that any arbitration be seated in Amman, Jordan such that the Jordanian arbitration law is applicable and the Jordanian courts have supervisory jurisdiction over the arbitration.

In Saudi Arabia, a High Order in 2019 declared that governmental bodies and state-owned companies that wished to settle their disputes with foreign investors through arbitration, and who had the necessary approvals to do so, should, in certain circumstances, have the arbitration conducted within Saudi Arabia at the Saudi Center for Commercial Arbitration (SCCA) or some other licenced Saudi arbitration centre. [53]

As NOCs and governments in the Middle East become more familiar with arbitration and more confident in their dispute resolution choices, we consider it likely that this trend towards the localisation of arbitration will continue in respect of energy arbitrations in the region.

Enhancing the appeal of international arbitration in the region

At the same time as wanting to localise their arbitration clauses where possible, some states in the Middle East are taking significant steps to increase the appeal of arbitration in their jurisdiction.

Legislative changes

Most notable in this regard are the efforts of the UAE government, which has introduced a series of far-reaching legislative changes designed to increase the appeal of arbitration in the UAE.

These include the long-awaited new arbitration law, the Federal Law No. 6 of 2018 (the Federal Arbitration Law), which came into force on 16 June 2018. It replaces the 15 articles of the UAE Civil Procedure Code, articles 203 to 218, which had previously governed arbitrations seated in the UAE. The Federal Arbitration Law, based on the UNCITRAL Model Law, has had the effect of modernising the UAE’s arbitration framework and, in many ways, bringing it in line with international standards. The Federal Arbitration Law applies to any arbitration seated in the UAE (unless otherwise agreed by the parties) including any arbitrations already on foot when the law came into effect. [54] One of the significant changes brought about by the Federal Arbitration Law is the inclusion of express provisions relating to interim measures. [55] In addition, the Federal Arbitration Law clarifies the process for enforcing UAE arbitral awards with a fast-tracked and over-hauled procedure.

In February 2019, new regulations came into force regarding the enforcement of foreign arbitral awards in the UAE. [56] These regulations are a positive step and early indications are that they are being put into effect by the relevant UAE courts. In March 2019, the Sharjah Court recognised a foreign arbitral award as being capable of enforcement pursuant to these new regulations. [57]

In addition to the Federal Arbitration Law, the UAE government also made another significant arbitration-related legislative change. In September 2018, the UAE repealed article 257 of the UAE Penal Code.42 Article 257 had placed arbitrators in the UAE at risk of imprisonment if they did not maintain ‘integrity’ and ‘impartiality’ in their capacity as arbitrators. Its chilling effect on arbitrations in Dubai was significant – some of the most experienced arbitration practitioners refused to sit as arbitrators in Dubai-seated arbitrations while the law was in place.

With a modern and UNCITRAL Model Law-based arbitration law in place, and the risk of criminal conviction and imprisonment now abated, it seems likely that there will be an increased push by domestic companies, whether private or public, to try and use Dubai as the seat of their arbitrations more frequently, including in the energy sector. There have also been notable legislative changes in Qatar. In 2017, Qatar introduced a new arbitration law that applies to all arbitrations taking place in Qatar. [58] Based on the UNCITRAL Model Law, Qatar’s new arbitration law modernises the previously outdated arbitration legislation and aligns it with international standards. The new arbitration law clarifies the position in respect of interim measures, just as the UAE’s Federal Arbitration Law does. [59]

In 2018, the Iraqi government announced its intention to accede to the New York Convention. [60] In November 2019, the Cabinet of Iraq approved a recommendation to expedite the legislation on Iraq’s accession to the New York Convention. [61] Although it has not yet taken place, such a step would be a significant move towards improving Iraq’s perception as an arbitration-friendly jurisdiction and may, in turn, lead to an increase in energy arbitrations connected to Iraq.

Institutional progress

As well as legislative changes, arbitral institutions in the region have continued to develop and flourish such that it is becoming more realistic for parties to choose to seat or otherwise connect their arbitration clauses in energy contracts to the region.

In the UAE, the financial free zones, which are empowered to create their own specific legal and regulatory framework in respect of all civil and commercial matters, [62] continue to flourish. These zones are an integral tool in ensuring that the UAE is perceived as an arbitration-friendly jurisdiction. One financial free zone, the Dubai International Financial Centre (DIFC), has its own system of laws based on common law. Where there are gaps in the DIFC law, or where there are conflicts, English law applies. The key arbitral institution within the DIFC is the DIFC-LCIA. The DIFC-LCIA is ‘essentially a joint venture between the DIFC and the London Court of International Arbitration’. [63] In 2016, the DIFC-LCIA released its updated rules of arbitration, which closely follow the LCIA Rules. The Abu Dhabi Global Market (ADGM) is another financial free zone with its own common law legal system [64] and an independent court system. [65] The ADGM has incorporated English common law and certain English statutes into this own legal system. [66] The ICC has opened a representative office in the ADGM [67] and in October 2018 the ADGM Arbitration Centre was opened. [68] The courts of the DIFC and the ADGM are known to be arbitration-friendly.

Parties to energy contracts who wish to connect their arbitration clauses with the region in some way, but who remain sceptical of the onshore courts and their attitude to arbitration, can and do localise their arbitration agreements by electing to use the DIFC-LCIA rules or by seating their arbitrations within the DIFC or the ADGM. This trend is likely to continue.

In Saudi Arabia, the SCCA has made substantial progress. From its launch in 2016, it has dealt with claims amounting to over 375 million Saudi riyals with parties from France, the United Kingdom, the United States and Germany. [69] Although still in its early stages, considering the amount of state support that the SCCA is receiving, and the dominance of the energy sector in Saudi Arabia, it seems likely that the SCCA will handle an increasing number of Middle Eastern related energy arbitrations in the future.

There have also been positive modernising developments at arbitral institutions in Iran and Bahrain, though it remains to be seen whether these will have any material effect on energy arbitrations related to the region. [70]

Third-party funding

Historically, the provision of third-party funding (TPF) in respect of disputes where the substantive or procedural laws pertain to the Middle East or where enforcement actions could be carried out in the Middle East, be it in litigation or arbitration, has not been common.

However, this position is changing. The recent global changes towards TPF of disputes, the rise of the use of arbitration in the Middle East, the development of certain parts of the Middle East as arbitration-friendly jurisdictions and the ever-increasing cost of international arbitration, all point to a likely increase in the use of TPF for Middle East-focused international arbitrations, and, considering their cost, energy arbitrations in particular.

The DIFC has already made some provisions in respect of TPF [71] and, in April 2019, the ADGM issued its litigation funding rules. [72]

Areas of dispute in the energy sector

The nature and scope of the rights and obligations of the parties pursuant to the underlying contracts between them will continue to form the basis for energy arbitrations related to the Middle East. In particular, the scope of rights and obligations in respect of payment (including take or pay clauses), stabilisation clauses, local content requirement clauses, price review clauses, termination rights and force majeure clauses will continue to feature in Middle Eastern energy arbitrations. In addition, it is likely that some of the following factors will have some impact on future energy disputes within the region.

Politics

The current political context will shape the basis and form of future Middle Eastern energy arbitrations.

As things currently stand, Saudi Arabia, the UAE, Egypt and Bahrain on the one side, and Qatar on the other, have been locked in a political stand-off since July 2017 that has resulted in, among other things, restrictions on the movement of goods to and from Qatar, and Qatar withdrawing from the Organization of Petroleum Exporting Countries. While Qatar has taken significant steps to try and prevent the blockade from disrupting its energy industry, and in particular its export of liquefied natural gas, [73] there remains potential for energy related arbitrations commenced as a result of the direct or indirect impact of this situation.

Other political developments which will also affect the energy industry in the Middle East and may cause disputes include.

  • The war in Yemen; in September 2019, drone attacks were carried out on Aramco oil facilities in Saudi Arabia reportedly by Yemen’s Houthi rebels, [74] with the attack immediately impacting Saudi Arabia’s oil production [75] and global oil prices. [76]
  • US–Iran tensions which have escalated, resulting in oil prices spiking [77] and supply issues developing. [78]
  • The war in Syria. [79]
  • The civil unrest in Iraq. [80]
  • At the time of writing, political tensions between Saudi Arabia and Russia had triggered a significant drop in oil prices that is likely to lead to disputes if not resolved quickly.

Whether or not the protests in Lebanon that took place in the last few months of 2019 will impact on the country’s first offshore oil and gas exploration is not clear – though, in late December 2019 reports indicated that it would not. [81]

Prior instability in the region has led to energy-related arbitrations. For example, three Indian companies successfully brought ICC proceedings against Yemen and its Ministry of Oil and Minerals in relation to force majeure declarations that they made as a result of the Arab Spring protests in Yemen. [82] Investor-state claims have also been made in relation to regional instability. For example, in 2019, a UAE investor, Trasta Energy, commenced arbitration against Libya claiming that Libya failed to protect its investment in an oil refinery during the Arab uprising. [83]

The resolution of ongoing border disputes will also have an effect on future energy relations and disputes. The unresolved maritime border dispute between Israel and Lebanon has made oil exploration in the disputed area impossible. [84] A similar dispute between Saudi Arabia and Kuwait was drawn to a close in December last year, which enabled the renewed production of 500,000 barrels of crude per day. [85]

Sanctions

The reimposition of US sanctions on Iran’s energy sector in 2018 has had and will continue to have an impact on the energy industry globally and in the Middle East. The scope of the US sanctions is far-reaching, both in respect of those who must comply with the sanctions and also in respect of the prohibited activities. The reimposed sanctions target Iran’s energy, shipping and banking industries. [86] They include, among other things, prohibitions on the purchase of petroleum, petroleum products or petrochemical products from Iran, conducting or facilitating any significant financial transactions with the Central Bank of Iran or any other Iranian financial institution, and investments in or dealings involving Iran’s energy industry. [87]

There is no doubt that the reimposition of these sanctions has caused disruption to the energy industry. Notwithstanding the advance notice and the temporary waivers that were given to eight countries (China, Greece, India, Italy, Taiwan, Japan, Turkey and South Korea), [88] it will not be surprising for arbitrations to be commenced relating to the impact of these sanctions on energy transactions. The introduction by the European Union of its own blocking statute in respect of the US sanctions may further complicate any disputes.

The reimposition of the Iranian sanctions may also impact ongoing energy arbitrations involving Iran or Iranian-related entities, including in respect of a party’s or an institution’s ability to accept payment from sanctioned parties.

Infrastructure development

The infrastructure required to service the levels of oil and gas production coming from the Middle East is vast. Power plants, offshore platforms, drilling rigs, LNG terminals, oil and gas pipelines, refineries, transport vessels and roads are all integral parts of the energy infrastructure. Infrastructure requirements for coal and renewable developments are also significant. Issues relating to the time, costs, quality and scope of the works in respect to energy-related infrastructure projects and the subsequent decommissioning of these projects have consistently led to arbitrations. In particular, questions relating to the design and construction of facilities are issues that frequently emerge in such disputes. Indeed, as recently as 2018, Qatar Petroleum’s subsidiary, Barzan Gas Project, brought ICC proceedings against Hyundai Heavy Industries regarding alleged problems with the pipeline that Hyundai had installed. [89] Where infrastructure, such as pipelines, cross international borders, the complexity of the project increases due to the need for the participation or consent of multiple states.

Environmental issues

Climate change and other environmental concerns are having an increasing impact on the energy industry. Climate change-related disputes (both commercial and investment), [90] including disputes related to increased environmental regulation, will likely increase. Bahrain has already faced a claim in respect of the construction of the state’s first recycling plant in which it alleged, among other things, that the construction company failed to obtain the necessary environmental permits. [91]

Disputes may also arise from transitions within the oil and gas industries to address environmental challenges. Among other things, we consider it likely that disputes may arise in or involving Middle East parties connected to carbon capture and storage (CCS) technology. The UAE boasts the world’s first commercial-scale industrial CCS project in Abu Dhabi [92] and in Saudi Arabia, Aramco has set up a pilot project that uses CCS technology. [93] The increased application of CCS in the region may result in disputes, especially in the context of transboundary CCS projects. [94]

In addition, disputes in or involving Middle East parties connected to carbon trading schemes may also develop. In 2019, the Dubai Regulatory Committee for Petroleum Products Trading was formed and, in 2018, Saudi Arabia announced plans to launch its own carbon trading scheme. [95] The use of such schemes in other parts of the world has already resulted in disputes relating to over-registration, issuance or revocation of carbon credits, decisions and disagreements over bookkeeping, and the erroneous transfer of credits [96] so it is not unlikely that similar disputes may arise in relation to any Middle East based carbon trading schemes that are developed.

Technology

The energy industry, like many others, is being reshaped by new technologies. The pace at which the industry is adopting these technologies varies. In the Middle East, many key participants in the energy industry have been keen supporters and adopters of emerging technologies.

ADNOC in particular is keen to promote and adopt technological change. Working with IBM, ADNOC has piloted a block chain-based automated system to track quantities and financial values of the transactions among ADNOC’s operating entities. [97]

Aramco has similarly embraced technology. One of its subsidiaries, Saudi Aramco Energy Ventures (SAEV), is dedicated to investing in companies that develop technologies that are of importance to Aramco. [98] In 2019, SAEV invested in Data Gumbo, a company that developed a block chain platform to streamline smart contracts and reduce disputes relating to payments among other things. [99]

Considering the focus on technology in the energy industry in this region, we anticipate an increase in the number of technology-related energy disputes. In particular, we can see that a mismatch in expectations from parties to these sorts of deals [100] may well lead to disagreements that result in arbitrations.

Belt and Road Initiative

China’s Belt and Road Initiative (BRI) is having a significant impact in the Middle East.

Energy makes up a significant part of the China’s trade and investment in the Middle East. [101] In 2019, for example, China State Construction Engineering Cooperation Middle East signed a deal with Petrofac Emirates to work on phase two of ADNOC’s Qushawira Field Development. [102] According to reports, this marked the first time that China State Construction was working on a UAE oil and gas project. [103] In the same year, China National Offshore Oil Company signed an agreement with ADNOC relating to upstream exploration and development, refining and the LNG trade. [104]

China’s energy investments do not just relate to oil and gas. In 2019, it was announced that a coal power plant was under construction in Dubai and would be owned, pursuant to a joint venture, by Dubai Electricity and Water Authority, Saudi Arabia-based ACWA Power, China’s Harbin Electric and the Silk Road Fund. [105] Financing is said to have come from, among others, the Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, China Construction Bank and the Silk Road Fund. [106]

It is inevitable that there will be some disputes resulting from these economic ties. Notwithstanding China’s obvious commitment to mediation as a form of dispute resolution, [107] it seems likely that some of these disputes, which will likely relate to large scale cross-border projects, will result in international arbitrations. Investor-state disputes will likely be resolved according to the disputes procedures set out in the applicable treaties. In addition, certain arbitral institutions have positioned themselves to be well-placed to administer BRI related arbitrations. For example, the ICC, which has a representative office in the ADGM in Abu Dhabi, has created a Belt and Road Commission to support BRI disputes. [108]

Funding

In this region, both governments and the private sector play a significant role in financing energy projects.

Financing-related to energy projects will continue to be the subject of arbitrations in the region. This is particularly the case where finance is provided through complex arrangements by multiple and international parties. Moreover, novel forms of financing for energy projects in the region are emerging. For example, a UAE solar utility company based in Dubai was able to raise approximately US$700,000 through a Middle East-based crowdfunding platform. [109] These platforms, especially in the early period where investors and owners are exploring new ground, are likely to lead to disputes.

Coronavirus

At the time of writing, it is too early to know what impact COVID-19 will have on the energy industry, but it seems likely that energy disputes will result. In early February 2020, the Chinese National Offshore Oil Corporation invoked force majeure to try and avoid its obligation to take delivery of shipments of liquefied natural gas from Shell and Total. It is reported that other Chinese companies, including PetroChina and Sinopec Group, are considering similar measures. [110]

Conclusion

Energy and the Middle East has been and will remain synonymous for the foreseeable future. The underlying nature of Middle Eastern energy disputes will likely remain, for the most part, the same, albeit the triggers may be different. However, the outlook of the parties is beginning to shift. Now, governments are increasingly confident and have well-established and sophisticated institutional NOCs who are active participants in the sector. Governments are, in general, more open to international partnerships and new concession structures but want to see more of the disputes being handled in their own region using their own arbitral institutions.


Notes

[1] BP Statistical Review of World Energy 2019, p.14, 30.

[2] Ibid, p. 14.

[3] Ibid.

[4] Ibid, p. 16.

[5] Ibid.

[6] Ibid, p. 28.

[7] Ibid, p. 16.

[8] Ibid, p. 30.

[9] Ibid, p. 30.

[10] Ibid, p. 32.

[11] Ibid, p. 32.

[12] World Energy Outlook 2018, Executive Summary, International Energy Agency, 13 November 2018, p. 1, https://www.iea.org/news/world-energy-outlook-2018-examines-future-patterns-of-global-energy-system-at-a-time-of-increasing-uncertainties (last accessed 18 February 2020).

[13] BP Energy Outlook 2019, Insights from the Evolving transition scenario – Middle East, 2019, p. 2., https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2019-region-insight-global-et.pdf (last accessed 19 February 2020).

[14] The UAE plans to have at least 6% of its electricity generated from nuclear power by 2050. UAE Federal Government website, Federal governments’ strategies and plans, https://government.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments-strategies-and-plans/uae-energy-strategy-2050 (last accessed 19 February 2020); Earlier this year, a reactor at the UAE’s first, and the world’s largest (upon completion), nuclear plant was confirmed as ready to begin operations. ‘UAE Nuclear Power Plant’s First Reactor Ready for Operation’, The Arab Weekly, 2 February 2020 https://thearabweekly.com/uae-nuclear-power-plants-first-reactor-ready-operation (last accessed 18 February 2020); Saudi Arabia has similar plans. By 2032, Saudi Arabia is aiming to build at least two large nuclear reactors; these reactors are expected to provide approximately 15% of the state’s power by 2040. The Arab Gulf States Institute in Washington, Civil Nuclear Energy in the Middle East: Demand, Parity and Risk, https://agsiw.org/wp-content/uploads/2019/04/Mason_Bahgat_Civil-Nuclear_ONLINE-1.pdf, p. 14 (last accessed 19 February 2020).

[15] According to one report, coal is expected to satisfy 2% of the total energy demand in the region by 2040. BP Energy Outlook 2019, Insights from the Evolving transition scenario – Middle East, 2019, p. 1, https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/energy-outlook/bp-energy-outlook-2019-region-insight-global-et.pdf (last accessed 18 February 2020); Construction of coal-based power plants are already underway in the UAE and Iran, while Egypt and Oman have announced plans for new coal-fired generators. ‘Hassyan Clean Coal Project, Dubai’, Power Technology, https://www.power-technology.com/projects/hassyan-clean-coal-project-dubai/ (last accessed 20 February 2020); ‘Iran to Construct 1st Coal Power Plant’, MEHR News Agency, 14 December 2016, https://en.mehrnews.com/news/122017/Iran-to-construct-1st-coal-power-plant (last accessed 20 February 2020); Mohammed Farag, ‘Egypt holds community consultation session for Hamrawein coal plant August 30’, Daily News Egypt, 21 July 2019, https://wwww.dailynewssegypt.com/2019/07/21/egypt-holds-community-consultation-session-for-hamrawein-coal-plant-august-30/ (last accessed 20 February 2020); Muscat Daily Staff Writer, ‘Oman’s First Coal Fired Power Plant to be established in Duqm’, Muscatdaily.com, 9 April 2018, https://archive.muscatdaily.com/Archive/Business/Oman-s-first-coal-fired-power-plant-to-be-established-in-Duqm-589i (last accessed 20 February 2020); In Jordan, a power plant powered by coal and petroleum coke with a net capacity of 30MW commenced operations last year. Manaseer Group website, News, https://www.manaseergroup.com/News/manaseer-cement-industry-launches-operations-of (last accessed 18 February 2020).

[16] In 2018, 867 MW, less than 1% of the region’s power, came from renewable sources. However, 7000 MWs worth of renewable energy projects are reported to be in the pipeline in the region. Renewable Energy Market Analysis: GCC 2019, IRENA, p. 49, https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2019/Jan/IRENA_Market_Analysis_GCC_2019.pdf (last accessed 19 February 2020); According to the International Energy Agency (IEA), renewable capacity in the MENA region is expected to increase by 85% (23 GW) by 2023. Renewables 2018 Analysis and Forecasts to 2023, International Energy Agency, p. 95. https://webstore.iea.org/download/summary/2312?fileName=English-Renewables-2018-ES.pdf (last accessed 19 February 2020).

[17] Law No. 3 of 2007 Regarding the Exploitation of Natural Resources and its Sources, Article 2.

[18] KSA Basic Law of Governance of 1992, Article 14; Constitution of Kuwait, 1962 (Reinstated 1992), Article 21; Constitution of the Kingdom of Bahrain, 2002, Article 11; Constitution of the Syrian Arab Republic, 2012, Article 14; Constitution of the Republic of Yemen, 2001, Article 8; Sultani Decree No. (101/96) Promulgating the Basic Statute of the State, Article 11.

[19] Constitution of the United Arab Emirates, 1971, Article 23.

[20] Constitution of the Republic of Iraq, 2005, Article 111.

[21] The Federal Oil and Gas Draft Law, the Iraqi Parliament Version, English Translation, http://www.iraq-businessnews.com/wp-content/uploads/2011/10/CoR-Draft-Oil-and-Gas-Law-English-Version-by-IEI.pdf (last accessed 20 February 2020).

[22] K Karadelis, ‘Iraq claims against Turkey over Kurdish oil exports’, 26 May 2014, Global Arbitration Review, https://globalarbitrationreview.com/article/1033414/iraq-claims-against-turkey-over-kurdish-oil-exports (last accessed 20 February 2020).

[23] ‘Factbox: Saudi Aramco-the oil colossus’ Reuters, 4 November 2019, https://www.reuters.com/article/us-saudi-aramco-ipo-factbox/factbox-saudi-aramco-the-oil-colossus-idUSKBN1XE18Z (last accessed20 February 2020).

[24] Stephen Kalin, ‘’Vindication’ – Saudi Arabia hails 10% debut jump in Aramco share’, Reuters, 11 December 2019, https://www.reuters.com/article/us-saudi-aramco-ipo-markets/vindication-saudi-arabia-hails-10-debut-jump-in-aramco-shares-idUSKBN1YF0LC (last accessed 20 February 2020).

[25] ADNOC website, Who We Are, https://www.adnoc.ae/en/about-us/who-we-are (last accessed 18 February 2020).

[26] ADNOC website, CEO Message, https://www.adnoc.ae/en/about-us/ceo-message (last accessed 18 February 2020).

[27] ADNOC website, Supreme Petroleum Council, https://www.adnoc.ae/en/about-us/supreme-petroleum-council (last accessed 18 February 2020).

[28] Qatar Petroleum website, About QP, https://qp.com.qa/en/AboutQP/Pages/AboutUs.aspx (last accessed 18 February 2020).

[29] Decree Law No. 10 of 1974 on the Establishment of Qatar Petroleum, Article 6(4).

[30] Ahmed Rasheed, ‘Iraq Parliament votes to create National Oil Company: lawmakers’, Reuters, 5 March 2018 https://www.reuters.com/article/us-iraq-oil/iraq-parliament-votes-to-create-national-oil-company-lawmakers-idUSKBN1GH1XB (last accessed 20 February 2020).

[31] ‘ Iraq transfer ownership of nine state oil companies to new National Oil Company’, Reuters, 18 October 2018, https://www.reuters.com/article/us-iraq-oil/iraq-transfers-ownership-of-nine-state-oil-companies-to-new-national-oil-company-idUSKCN1MS27E (last accessed 20 February 2020).

[32] Samya Kullab and Staff, ‘Supreme Court rules against INOC law’, Iraq Oil Report, 23 January 2019, https://www.iraqoilreport.com/news/supreme-court-rules-against-inoc-law-36306/ (last accessed 20 February 2020); Robert Mogielnicki, One Year On, the Iraqi National Oil Company is Everything and Nothing, The Arab Gulf States Institute in Washington, 1 October 2019, https://agsiw.org/one-year-on-the-iraqi-national-oil-company-is-everything-and-nothing/ (last accessed 20 February 2020).

[33] John Lee, ‘Oil Ministry Pauses Transfer of Oil Cos to INOC’, Iraq Business News, 22 October 2018, https://www.iraq-businessnews.com/2018/10/22/oil-ministry-pauses-transfer-of-oil-cos-to-inoc/ (last accessed 20 February 2020).

[34] Ministry of Petroleum website, Mission, https://en.mop.ir/portal/home/?generaltext/4012/4187/165293/Mission (last accessed 18 February 2020).

[35] Ministry of Petroleum website, Mission, https://en.mop.ir/portal/home/?generaltext/4012/4187/165293/Mission (last accessed 18 February 2020).

[36] Kurdistan Regional Government website, Index, http://mnr.krg.org/index.php/en/the-ministry/contracts/pscs-signed (last accessed 20 February 2020).

[37] Qatar Petroleum website, About QP, https://qp.com.qa/en/AboutQP/Pages/AboutUs.aspx (last accessed 18 February 2020).

[38] Corporate Choices in International Arbitration, 2013 International Arbitration Survey, Queen Mary University and PWC, http://www.arbitration.qmul.ac.uk/media/arbitration/docs/pwc-international-arbitration-study2013.pdf (last accessed 18 February 2020). Based on the findings of the 2018 Queen Mary survey, this trend is likely to continue: ‘It is widely known that arbitration is very prominent in the energy sector and our finding strongly confirms that trend: a large majority of 85 per cent of the respondent group believe that the use of international arbitration is likely to increase even more in the future’ in 2018 International Arbitration Survey: The Evolution of International Arbitration, White & Case, Queen Mary and School of International Arbitration, http://www.arbitration.qmul.ac.uk/media/arbitration/docs/2018-International-Arbitration-Survey---The-Evolution-of-International-Arbitration-(2).PDF (last accessed 18 February 2020), p. 29.

[39] For example, article 34(b) of Jordan’s Model Production Sharing Agreement relating to the Northern Highlands Block. Jordan Model PSC, article 24. http://www.eisourcebook.org/cms/Jordan%20Model%20Production%20Sharing%20Agreement%20Nthern%20Highlands.pdf (last accessed 20 February 2020); Jordan Model PSC and article 37 of the Technical Service Contract for the Rumaila Oil Field between South Oil Company of the Republic of Iraq, BP Iraq Limited, CNPC International (Iraq) Limited, and SOMO refer to ICC arbitration, https://www.ogel.org/legal-and-regulatory-detail.asp?key=5346 (last accessed 18 February 2020). Contracts involving international companies in Qatar are increasingly providing for arbitration with the ICC rules most commonly adopted. Developing renewable energy projects – A guide to achieving success in the Middle East (3rd Ed.) January 2016, https://www.pwc.com/m1/en/publications/documents/eversheds-pwc-developing-renewable-energy-projects.pdf (last accessed 20 February 2020), p. 66.

[40] ICC Dispute Resolution 2018 Statistics, http://files-eu.clickdimensions.com/iccwboorg-avxnt/files/web_icc_disputeresolution2018statistics.pdf?m=11.6.2019%2011%3A46%3A22&_cldee=YWdvaW5zQHZlbGF3LmNvbQ%3D%3D&recipientid=contact-780a89b59404e911a99f000d3ab38ab1-e7a8451ec8964a3399514c904bfdf1e2&esid=5a1d9a87-22a1-43b0-8004-4bc0ca257142 (last accessed 19 February 2020), p. 13.

[41] 6.1% of the parties to LCIA arbitrations were from the Middle East in 2018. LCIA, 2018 Annual Casework Report, https://www.lcia.org/lcia/reports.aspx (last accessed 19 February 2020), p 5.

[42] United Nations Conference on Trade and Development website, Investment Policy Hub, https://investmentpolicy.unctad.org/international-investment-agreements/by-economy (last accessed 20 February 2020).

[43] Dispute Settlement Provisions in International Investment Agreements: a large sample survey, http://www.oecd.org/investment/internationalinvestmentagreements/50291678.pdf (last accessed 19 February 2020), p. 18; https://unctad.org/en/PublicationsLibrary/diaeia2013d2_en.pdf (last accessed 20 February 2020), p. 65.

[44] 17% of the cases registered in 2019 involved MENA states. It is reasonable to assume that at least some of these disputes were energy disputes. ICSID, 2019 ICSID Annual Report, https://icsid.worldbank.org/en/Documents/ICSID_AR19_EN.pdf (last accessed 19 February 2020), p. 22.

[45] Agreement on Promotion, Protection and Guarantee of Investments among Member States of the Organization of the Islamic Conference. Article 17, https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/2399/download. (last accessed 19 February 2020); Luke Eric Peterson, ‘Governments Working to Rein in use of OIC Investment Treaty’s Investor-State Arbitration Offer’, IA Reporter, 3 April 2019, https://www.iareporter.com/articles/governments-working-to-rein-in-use-of-oic-investment-treatys-investor-state-arbitration-offer/ (last accessed 19 February 2020).

[46] The Arab League Agreement further provides that where an award is not made within the required period, the dispute may be referred to the Arab Investment Court, based in Cairo. Unified Agreement for the Investment of Arab Capital in the Arab States. Article 27, https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/2394/download (last accessed 19 February 2020).

[47] ‘Investigation: Four Previously-Confidential Claims under OIC Investment Agreement are Uncovered, as controversy continues over Treaty’s Use in Arbitration’, IA Reporter Investment Arbitration Report, 16 May 2019, https://www.iareporter.com/articles/investigation-4-previously-confidential-claims-under-oic-investment-agreement-are-uncovered-as-controversy-continues-over-treatys-use-in-arbitration/ (last accessed 19 February 2020); Trasta Energy v Libya, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/979/trasta-v-libya (last accessed 19 February 2020) Al-Tuwairqi v Pakistan, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/987/al-tuwairqi-v-pakistan (last accessed 19 February 2020); beIN Corporation v Saudi Arabia, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/940/bein-v-saudi-arabia (last accessed 19 February 2020); Hesham Talaat M. Al-Warraq v. The Republic of Indonesia, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/426/al-warraq-v-indonesia (last accessed 19 February 2020); Kontinental Conseil Ingénierie v. Gabonese Republic, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/678/kci-v-gabon (last accessed 19 February 2020); Ali Alyafei v. Hashemite Kingdom of Jordan (II), https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/781/alyafei-v-jordan-ii- (last accessed 19 February 2020); D.S. Construction FZCO v. Libya, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/775/d-s-construction-v-libya (last accessed 19 February 2020).

[48] Mohamed Abdulmohsen Al-Kharafi & Sons Co. v. Libya and others, https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/408/al-kharafi-v-libya-and-others and Ali Alyafei v. Hashemite Kingdom of Jordan (I), https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/620/alyafei-v-jordan-i- (last accessed 19 February 2020).

[49] ‘Jordan is the 51st Contracting Party to the ECT’, International Energy Charter, 12 December 2018, https://www.energycharter.org/media/news/article/jordan-is-the-51st-contracting-party-to-the-ect/ (last accessed 19 February 2020).

[50] Energy Charter website, Who Are We, https://www.energycharter.org/who-we-are/members-observers/ (last accessed 19 February 2020).

[51] International Energy Charter, FAQ: What is the relationship of the International Energy Charter to the European Energy Charter and the Energy Charter Treaty, https://www.energycharter.org/fileadmin/DocumentsMedia/Legal/IEC_AR.pdf (last accessed 19 February 2020), p. 21.

[52] By December 2019, the Energy Charter Secretariat had tracked 128 publicly known cases where the ECT was invoked. The bulk of these disputes were brought before ICSID, followed by the Stockholm Chamber of Commerce (SCC), ad hoc arbitrations under UNCITRAL Rules, and the Permanent Court of Arbitration International Energy Charter website, List of Cases, https://www.energychartertreaty.org/cases/list-of-cases/ (last accessed 19 February 2020).

[53] High Order No. 28004 issued by the President of Council of Ministers, 19 January 2019, http://ncar.gov.sa/Documents/Details?Id=Lsf85d7mbFCgvvICYzczbA%3D%3D (last accessed 19 February 2020).

[54] Article 2 of the Federal Arbitration Law; E Al Tamimi, S Koleilat-Aranjo, Commentary on the UAE’s New Arbitration Law, Al Tamimi & Company Law Update, June–July 2018, https://www.tamimi.com/law-update-articles/commentary-on-the-uaes-new-arbitration-law (last accessed 18 February 2020).

[55] J Rahman and S Irani, ‘Is the Introduction of Interim Relief: A Relief?’, Al Tamimi & Company Law Update, September 2018, https://www.tamimi.com/law-update-articles/is-the-introduction-of-interim-relief-a-relief/ (last accessed 18 February 2020).

[56] Cabinet Decision No. 57 of 2018. See, M Th. Aly and Z Anani, ‘Enforcement of Foreign Arbitral Awards in the UAE: Paving the way for a New Enforcement Regime’, Al Tamimi & Company Law Update, December 2018–January 2019, https://www.tamimi.com/law-update-articles/enforcement-of-foreign-arbitral-awards-in-the-uae-paving-the-way-for-a-new-enforcement-regime/ (last accessed 18 February 2020).

[57] Al Tamimi & Company website, News, https://www.tamimi.com/news/first-foreign-arbitration-award-recognised-and-enforced-in-sharjah-under-new-uae-enforcement-regime/ (last accessed 18 February 2020).

[58] Law No. 2 of 2017 Law of Arbitration in Civil and Commercial Matters Qatar, http://www.gcccac.org/images/english-pdf/Law_of_Arbitration_in_Civil_and_Commercial_Matters_Qatar.pdf (last accessed 18 February 2020).

[59] Qatar Arbitration Law, Article 17(3), http://www.gcccac.org/images/english-pdf/Law_of_Arbitration_in_Civil_and_Commercial_Matters_Qatar.pdf (last accessed 18 February 2020).

[60] N. Kadhim, ‘Finally, Iraq Says Yes to the New York Convention’, Kluwer Arbitration Blog, 13 March 2018, http://arbitrationblog.kluwerarbitration.com/2018/03/13/scheduled-15-march-better-late-never-iraq-embraces-new-york-convention/ (last accessed 18 February 2020); Government of Iraq website, The Cabinet, https://gds.gov.iq/cabinet-approves-iraqs-accession-new-york-convention-international-arbitration/ (last accessed 18 February 2020).

[61] John Lee, ‘Cabinet pushes for Int’l Arbitration Convention’, Iraq Business News, 28 November 2019, https://www.iraq-businessnews.com/2019/11/28/cabinet-pushes-for-intl-arbitration-convention/ (last accessed 18 February 2020).

[62] Federal Law No. 8 of 2004 regarding the Financial Free Zones, Article 3(2).

[63] As described by the then-chief justice of the DIFC, Sir Anthony Evans, DIFC-LCIA Arbitration Centre website, Overview, https://www.difc-lcia.org/overview.aspx (last accessed 18 February 2020).

[64] ADGM Courts website, ADGM Courts Legislative Framework, https://www.adgm.com/legal-framework (last accessed 18 February 2020).

[65] Ibid.

[66] Ibid.

[67] ADGM Arbitration Centre, ADGM, p.3, https://www.adgmac.com/wp-content/uploads/2019/09/ADGM-Arbitration-Centre-Brochure.pdf (last accessed: 1 April 2020).

[68] ADGM Arbitration Centre, the state-of-the-art arbitration hearing facility in Abu Dhabi, commences full operations’, ADGM, 17 October 2018 https://www.adgm.com/media/announcements/adgm-arbitration-centre-the-state-of-the-art-arbitration (last accessed: 1 April 2020).

[69] Saudi Center for Commercial Arbitration, Institutional Arbitration in the Kingdom: A National Vision, Report on the work and activities of the Saudi Center for Commercial Arbitration, https://sadr.org/assets/uploads/SCCA_Report_Eng.pdf, p. 15 (last accessed 18 February 2020).

[70] In March 2018, the Tehran Regional Arbitration Centre launched a set of arbitration rules which are essentially based on the UNCITRAL Arbitration Rules 2010, Tehran Regional Arbitration Centre website, Rules, http://trac.ir/rules-of-arbitration/ (last accessed 18 February 2020); In October 2017, the Bahrain Chamber for Dispute Resolution updated its arbitration rules; F Hajjar and J Gaffney, ‘Seven years in Bahrain: The Bahrain Chamber for Dispute Resolution updates its Arbitration Rules,’ Al Tamimi & Company, Law Update, https://www.tamimi.com/law-update-articles/seven-years-bahrain-bahrain-chamber-dispute-resolution-updates-arbitration-rules/ (last accessed 18 February 2020).

[71] In 2017, the DIFC courts issued Practice Direction (No. 2 of 2017), which sets out the requirements for funded parties to observe in respect of their relationships, interactions, and contracts with funders in legal proceedings in the DIFC courts. DIFC Courts website, Practice Directions, https://www.difccourts.ae/2017/03/14/practice-direction-no-2-2017-third-party-funding-difc-courts/ (last accessed 19 February 2020).

[72] ADGM Courts website, media, announcements, https://www.adgm.com/media/announcements/abu-dhabi-global-market-courts-issue-litigation-funding-rules (last accessed 19 February 2020); Al Tamimi & Company website, News, https://www.tamimi.com/news/adgm-enacts-litigation-funding-rules-2019/ (last access19 February 2020).

[73] As recently as January 2020, Qatar Petroleum entered into an LNG supply agreement with Kuwait Petroleum Corporation. Ed Reed, ‘Kuwait signs up LNG supplies from Qatar’, Energy Voice, 6 January 2020 https://www.energyvoice.com/oilandgas/middle-east/215662/kuwait-signs-up-lng-supplies-from-qatar/ (last accessed 19 February 2020); In addition, Qatar continues to supply the UAE with natural gas through the Dolphin Pipeline – through which Qatar supplies natural gas to the UAE - would not be shut Qatar Petroleum renews shared oilfield concession pact with UAE’, Reuters, 13 March 2018, https://www.reuters.com/article/us-qatar-emirates-oil/qatar-petroleum-renews-shared-oilfield-concession-pact-with-uae-idUSKCN1GP12R (last accessed 19 February 2020); In March 2018, Qatar Petroleum and ADNOC renewed their concession agreement with Japan’s United Petroleum Development Co, and Bunduq Company Ltd in respect of the development and operation of the Al-Bunduq offshore oilfield ‘Qatar Petroleum renews shared oilfield concession pact with UAE’, Reuters, 13 March 2018, https://www.reuters.com/article/us-qatar-emirates-oil/qatar-petroleum-renews-shared-oilfield-concession-pact-with-uae-idUSKCN1GP12R (last accessed 19 February 2020).

[74] ‘Major Saudi Arabia oil facilities hit by Houthi drone strikes’, The Guardian, 14 September 2019, https://www.theguardian.com/world/2019/sep/14/major-saudi-arabia-oil-facilities-hit-by-drone-strikes (last accessed 19 February 2020).

[75] Javier Blas, ‘Saudi Oil Output Cut in Half After Drones Strike Aramco Site’, Bloomberg, 14 September 2019 https://www.bloomberg.com/news/articles/2019-09-14/saudi-aramco-contain-fires-at-facilities-attacked-by-drones (last accessed 19 February 2020).

[76] Sheela Tobben, ‘Saudi Oil Output Cut in Half After Drones Strike Aramco Site’, Bloomberg, 16 September 2019 https://www.bloomberg.com/news/articles/2019-09-15/oil-prices-jump-19-after-attack-cuts-saudi-arabian-supplies (last accessed 19 February 2020).

[77] ‘Oil Price Spikes amid US-Iran tensions’ Financial Times, https://www.ft.com/content/1155034d-6d5b-4388-bfa3-0c51760a01be (last accessed 19 February 2020).

[78] ‘UAE and Qatar: Natural Gas Exports may get affected by US-Iran Conflict’, 8 January 2020 https://industryglobalnews24.com/uae-and-qatar-natural-gas-exports-may-get-affected-by-usiran-conflict (last accessed 19 February 2020); Among other things there are increased concerns about the safety of transit through the Strait of Hormuz. ‘Iran Claims it has Seized third Oil Tanker in Gulf as Tension with US rise’, The Guardian , 4 August 2019, https://www.theguardian.com/world/2019/aug/04/iran-seizes-oil-tanker-in-gulf-smuggling-fuel-to-arab-states (last accessed 19 February 2020).

[79] Tom O’Connor,‘U.S. and Russian Duelling Roadblocks Create Friction Near Syria’s Oil and Gas Regions’, Newsweek, 22 January 2020, https://www.newsweek.com/us-russia-forces-syria-oil-region-1483527 (last accessed 19 February 2020).

[80] Among other things, maintaining supply during the protests is difficult. Tom O’Connor, ‘Iraqi Oil Fields Halts as Protests calling for reforms Escalate’ Bloomberg, 22 January 2020, https://www.bloomberg.com/news/articles/2020-01-19/iraqi-oil-field-halts-as-protests-calling-for-reforms-escalate (last accessed 19 February 2020).

[81] Lebanese Oil & Gas Initiative website, Key Issue, https://logi-lebanon.org/KeyIssue/Total-says-results-of-Block-4-drilling-will-be-clear-by-June (last accessed 19 February 2020).

[82] J Ballantyne, ‘Award against Yemen enforced in US’, Global Arbitration Review, 8 October 2018, https://globalarbitrationreview.com/article/1175394/award-against-yemen-enforced-in-us (last accessed 19 February 2020).

[83] ‘UAE investor in Libya brings claim under Islamic treaty’ Global Arbitration Review, 11 January 2019, https://globalarbitrationreview.com/article/1178986/uae-investor-in-libya-brings-claim-under-islamic-treaty (last accessed 19 February 2020).

[84] ‘Lebanon’s Berri: Israel violating water borders in oil exploration’, Reuters, 6 February 2019, https://www.reuters.com/article/us-lebanon-israel-oil/lebanons-berri-israel-violating-water-borders-in-oil-exploration-idUSKCN1PV1QV (last accessed 19 February 2020).

[85] Stanley Reed ‘Saudi Arabia and Kuwait Settle Dispute Over Oil Fields’ New York Times, 24 December 2019, https://www.nytimes.com/2019/12/24/business/saudi-arabia-kuwait-oil.html (last accessed 19 February 2020).

[86] Supra 135.

[87] ‘US unleashes sanctions on Iran, hitting oil, banking and shipping’, BBC News, 5 November 2018, https://www.bbc.com/news/business-46092435 (last accessed 19 February 2020).

[88] In May 2019, US ended exemptions from US secondary sanctions for major importers of Iranian oil. ‘Six charts that show how hard US sanctions have hit Iran’, BBC News, 9 December 2019, https://www.bbc.com/news/world-middle-east-48119109 (last accessed 19 February 2020).

[89] Hyundai Heavy Wins $900 Million Deal for Barzan Gas Project’, LNG World News, https://www.lngworldnews.com/hyundai-heavy-wins-900-million-deal-for-barzan-gas-project-qatar/ (last accessed 19 February 2020).

[90] At its broadest, climate change related disputes have been defined by the ICC Task Force as “any dispute arising out of or in relation to the effect of climate change and climate change policy, the United Nations Framework Convention on Climate Change (“UNFCC”), and the Paris Agreement.” International Chamber of Commerce, ICC Commission on Arbitration and ADR, Resolving Climate Change Related Disputes through Arbitration and ADR, p. 8.

[91] Cosmo Sanderson, ‘ICC Tribunal Throws out Claim against Bahrain’, Global Arbitration Review, January 2020 https://globalarbitrationreview.com/article/1213198/icc-tribunal-throws-out-claim-against-bahrain (last accessed 19 February 2020).

[92] Robin Mills, ‘Gulf States can lead the way with Carbon Capture’, The National, 3 December 2017, https://www.thenational.ae/business/energy/gulf-states-can-lead-the-way-with-carbon-capture-1.680938 (last accessed18 February 2020).

[93] Saudi Aramco website, Creating Value, https://www.saudiaramco.com/en/creating-value/technology-development/globalresearchcenters/carbon-management (last accessed 19 February 2020).

[94] UNFCCC, Transboundary carbon capture and storage project activities (Technical paper), 1 Nov 2012.

[95] Rania El Gamal, ‘Saudi Arabia plans to launch carbon trading scheme’, Reuters, 30 October 2019, https://www.reuters.com/article/us-saudi-investments-energy/saudi-arabia-plans-to-launch-carbon-trading-scheme-idUSKBN1X91M1 (last accessed 19 February 2020).

[96] L. Hodes Rosen, A. Bossi, “Due Process Rights in the Carbon Markets” (2011) 11 Climate L Rep 9,12.

[97] ‘ADNOC has Implemented IBM Blockchain Technology to Streamline Daily Transactions’, World Oil , 12 October 2018, https://www.worldoil.com/news/2018/12/10/adnoc-has-implemented-ibm-blockchain-technology-to-streamline-daily-transactions (last accessed 19 February 2020).

[98] Saudi Aramco Energy Ventures website, https://www.saev.com/ (last accessed 19 February 2020).

[99] ‘Data Gumbo Secures $6M in Series A Funding from Venture Arms of Leading International Oil & Gas Companies’, Business Wire, 7 May 2019, https://www.businesswire.com/news/home/20190507005752/en/Data-Gumbo-Secures-6M-Series-Funding-Venture (last accessed 18 February 2020).

[100] A recent study found that 9 out of 10 senior oil and gas executives said they had not been able to meet expectations around digital transformation and had not yet seen value being delivered. Cristina Lago, ‘Middle East Oil and Gas CIOs confront digital Transformation Hurdles’ CIO, 14 November 2020, https://www.cio.com/article/3453438/middle-east-oil-and-gas-cios-confront-digital-transformation-hurdles.html (last accessed 18 February 2020).

[101] Saudi Arabia was the top supplier of China’s crude oil in 2019. Notwithstanding US sanctions, China also purchased Iranian oil. Chen Aizhu, ‘China Oil Imports from top supplier Saudi Arabia rise 47% in 2019’, Reuters, 31 January 2020, https://www.reuters.com/article/us-china-economy-trade-oil/china-oil-imports-from-top-supplier-saudi-arabia-rise-47-in-2019-customs-idUSKBN1ZU0EH (last accessed 20 February 2020); In 2018, as well as from Saudi Arabia, China imported significant amounts of crude oil from Iraq, Oman, Iran, and Kuwait- all of whom were in the top ten countries that supplied crude oil to China that year. The UAE was number eleven. ‘Top 15 Crude Oil Suppliers to China’, World Stop Exports, 28 January 2020, http://www.worldstopexports.com/top-15-crude-oil-suppliers-to-china/ (last accessed 19 February 2020).

[102] ‘China’s CSCEC ME wins $130m EPC deal for Adnoc’s Qushawira field’, Arabian Industry.com, 21 February 2019, https://www.arabianindustry.com/construction/news/2019/feb/21/chinas-cscec-me-wins-130m-epc-deal-for-adnocs-qushawira-field-6043115/ (last accessed 18 February.2020).

[103] Ibid.

[104] ‘China/Abu Dhabi oil firms sign exploration refining agreement’, Reuters, 22 July 2019, https://www.reuters.com/article/china-emirates-adnoc/update-1-china-abu-dhabi-oil-firms-sign-exploration-refining-agreement-idUSL4N24N2E1 (last accessed 19 February 2020).

[105] ‘Hassyan Coal-Fired Power Plant, Dubai’, NS Energy, https://www.nsenergybusiness.com/projects/hassyan-coal-fired-power-plant-dubai/ (last accessed 19 February 2020).

[106] Ibid.

[107] ‘China Belt and Road Disputes set to Fuel Mediation’s Global Rise’, Financial Times, 14 August 2019, https://www.ft.com/content/71288fe2-9e6f-11e9-9c06-a4640c9feebb (last accessed 19 February 2020).

[108] ICC website, Dispute Resolution, https://iccwbo.org/dispute-resolution-services/belt-road-dispute-resolution/belt-and-road-commission/ (last accessed 19 February 2020).

[109] JD Alois, ‘Largest Equity Crowdfunding Round in the MENA Region: Enerwhere Lists on Eureeca’, Crowdfund Insider, 20 October 2017, https://www.crowdfundinsider.com/2017/10/123831-largest-equity-crowdfunding-round-region-enerwhere-lists-eureeca/ (last accessed 19 February 2020).

[110] Stephen Stapczynski, ‘Shell, Total reject China’s force majeure on LNG shipments’, World Oil, 2 July 2020, https://www.worldoil.com/news/2020/2/7/shell-total-reject-china-s-force-majeure-on-lng-shipments (last accessed on 19 February 2020).

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