A collection of inter-related activities and business relationships pose a considerable challenge to oil and gas industry players. Projects and supply chains are complex, while joint ventures can be tested by financial constraints and tighter profit margins.
At the same time, oil and gas businesses are at the forefront of attention from many host states and regulators as a result of (i) the current increasing focus on ESG issues and environmental targets and (ii) the need for the relevant government to use oil operations as a source of state revenue. In some regions, those challenges are accompanied by local content laws and nationalistic policies which add to the complexity. In a generally harsh global business environment made worse by the COVID-19 pandemic, it is logical, that industry players would be wary of disputes and their possible consequences.