Survey suggests climate change activism presents a significant legal risk to oil and gas companies

January 2022 - Oil and Gas

Survey suggests climate change activism presents a significant legal risk to oil and gas companies: A survey of senior legal managers and senior in-house counsel in the oil and gas industry has revealed that more than a third believe that net zero actions carried out by activists, shareholders or investors pose a 'real risk' to their companies.

The Oil & Gas Disputes Survey was conducted by legal firm, CMS and had 50 responses from oil and gas professionals around the globe, including Europe, Asia Pacific, Latin America, Africa and the Middle East.

More than a third (37%) of the participants polled for the survey said that climate change activism poses a significant threat to their business, and was their primary concern.

The second most concerning issue was the disruption caused by protestors at offshore and onshore worksites, with more than a quarter (26%) saying it was a real risk for their company.

The main factors behind oil and gas legal disputes were found to be 'projects, joint ventures and dealings with host nation states', according to the survey, while the research also revealed that more could be done to prevent disputes happening, including 'managing change in projects', 'better understanding of local market factors prior to project execution' and 'better record keeping'.

The survey also revealed that 37% of respondents identified the UK Continental Shelf as the location where the risk of disputes occuring was the greatest, while 50% of those working in the region said the same.

Valerie Allan, a energy legal specialist at CMS said: “The survey provides us with interesting insights into how industry disputes are arising and being managed around the globe."

“This is an evolving situation with the onset of environmental and climate change concerns. Currently the industry is defending an ever-growing list of climate change cases as activists begin to be more assertive, often through judicial review challenges."

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