Originally from The MENA Leading Arbitrators’ Guide to International Arbitration

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I. INTRODUCTION

Oil and Gas (O&G) arbitration has a long and fascinating history in the MENA region.  It was the epicenter for some of the most important historical international arbitration cases. Many of today’s key principles in international arbitration and investment law were established as the result of a number of groundbreaking arbitration cases beginning in the 1950s between international oil companies (IOCs) and Middle Eastern governments. These cases arose in response to some of those governments’ attempts to increase their share of revenues from their oil and gas resources, or their outright nationalization of the IOCs’ investments. To this day, the O&G business continues to have an outsize presence both in the arbitration world and in the MENA region.

O&G arbitrations make up the largest portfolio of international commercial and investment disputes in the world as indicated in the statistics of major arbitral institutions. In addition to having the largest number and size (both in terms of value and complexity) of international arbitrations, the O&G business has the greatest range and diversity of any economic sector in the kinds of arbitration cases that it generates.  This chapter will focus on investor-state and commercial O&G disputes in the MENA region. Before discussing them, a brief overview of the development of the O&G business in the MENA region is first provided to put these arbitrations and court cases in perspective.

II. THE OIL AND GAS BUSINESS IN THE MENA REGION

Oil companies began investing in the MENA region in 1901 when William Knox D’Arcy acquired an oil concession in Iran. IOCs then went on to discover a significant majority of the world’s proven oil reserves in the MENA region throughout the 20th century, which resulted in that part of the world holding anywhere between 50% to 70% of the global oil reserves from the 1950s onwards.