Rethinking Contractual Risk allocation in the Hydrocarbon Industry for Environmental Sustainability

Dr Smith Azubuike (University of Durham) will present his research on Rethinking Contractual Risk allocation in the Hydrocarbon Industry for Environmental Sustainability.

Abstract

The oil and gas industry follows an established pattern of risk allocation that enables operators and drilling contractors to reallocate risk without regard to fault, using tools such as indemnity, exclusion, and limitation of liability clauses. These tools act as a defence against liability but lead to moral hazard and sometimes encourage environmentally unsustainable practices that damage the environment. As the drive for a decarbonised economy and environmentally sustainable practices occupy global discussions, it is necessary to examine the current risk allocation practice and its implication for public safety and environmental protection. It is also essential to understand the role that public policy and distributive justice can play in mainstreaming a higher level of care during offshore drilling operations. This background forms the foundation of the discussion - Rethinking Contractual Risk allocation in the Hydrocarbon Industry for Environmental Sustainability.