How can oil production be made more equitable for all stakeholders?

Improving equity in oil production involves transparent revenue distribution, community involvement, and environmental responsibility. Implementing fair profit-sharing agreements, fostering local employment, and prioritizing environmental sustainability can contribute to a more equitable outcome for all stakeholders.

Addressing equity in oil production requires fair revenue-sharing strategies, transparent contracts and community empowerment. Despite significant oil wealth in a region like the Niger Delta, poverty rate is at least 40%. Policies must allocate more oil revenues to social programs, as only a small fraction currently benefits impacted communities. Transparent contracts and revenue-sharing agreements are vital to avoid unequal benefits, while empowering local communities in decision-making processes ensures more equitable resource distribution. These strategies emphasize the urgent need for fair wealth distribution, transparent agreements, and inclusive decision-making to bridge the gap between oil-generated wealth and community well-being.

The key player in any E&P Upstream producer is production plateau. This targets ultimate recovery at minimum operating cost thus delivers ultimate revenues. Equity is agreed among stakeholders first day signing the agreement. Accordingly, shares of the gained revenue are distributed. To ensure sustainability of ultimate revenues in spite of the unexpected market price, they all have to agree on implementation of minimum operating cost strategy. Thus a production plateau rate is set to avoid work over operations and delay infill drilling as long as possible.

-Um aspecto a se ter em conta, pauta-se na satisfa??o de todas as partes envolvidas. Tarefa árdua mas possível, quando se pensar no outro como um indivíduo com os mesmos direitos e capacidades!

Following ideas might be considered regarding Equity in oil production * Fair income distribution. Establish contactual agreements to ensure and affordable distribution of income generated by oil production. * Community Participation. Ensure active participation of local communities in decision-making related to oil production. * Sustainable development. Minimize environmental and social impact. * Transaparency in contracts & payments. Ethic above all. * Local training and employment. Create employment opportunities and skill development near the oil fields. * Development funds. Create specific funds for the economic and social development. * International cooperation. Involve international agencies to address challenges related to equity.

In my humble opinion this Querrey has been floated at an extremely belated stage. I mean to say that substitutes of Mineral Oil / Petroleum Products already mountains of Cadmium found in China and Afghanistan. As per my information the Cadmium found so far is even more than 07 Times of the present requirements of the Globe

Governments play a pivotal role in making oil production more equitable for all stakeholders. They can enact and enforce transparent regulations, ensuring fair revenue distribution. By actively involving local communities in decision-making processes, governments empower those directly impacted by oil production. Implementing and monitoring social responsibility initiatives, such as community development projects, falls within the government's purview. Additionally, governments can establish and enforce fair labor practices, promote environmental sustainability through regulations, and engage in international cooperation to create a globally equitable framework for oil production.

In much of the world there is no clear distinction between governments and oil companies as the biggest oil companies are state-owned rather than privately owned. Just to mention a few: Saudi Aramco, Petronas, Pertamina, Sonangol, Sonatrach, Petrobras

Ensuring that part of the revenue goes to local government and authorities is a key to long term acceptance and fairness. Norway is a good example of how it can work

The government plays a crucial role in ensuring equitable oil production by implementing policies that promote fair distribution of resources and benefits. This includes transparent regulatory frameworks, revenue-sharing mechanisms, and social programs to address the needs of communities affected by oil production. Additionally, fostering inclusive participation, environmental sustainability, and ethical practices within the industry are vital aspects.

In Alberta, the public owns the vast majority of mineral rights and companies merely lease the right to access hydrocarbons for which they may royalties into the public purse. From an equity perspective, Albertans pay no sales tax, regardless of socio-economic status...

See also my comment under Government. ‘Big Oil’ is in reality Saudi Aramco, PEMEX, Pertamina, Petronas, Equinor [ie Statoil], Sonatrach, Sonangol, NNPC, Petrobras, Sinopec, etc, etc., rather than Exxon Mobil, Shell, Total, Chevron etc. On a global scale it is the State companies that really control the bulk of the world’s oil & gas resources

Each country has different laws to follow, be them labor, environmental or criminal. Companies must adapt to each environment (country) in a way that still turns a profit while keeping everything in line according to the local rules. In general, this is quite easily done hence the vast network of on and offshore rigs around the world.

I agree on this. However, ethical and sustainable practices will be the greatest challenge since internal matters prevail over the most reasonable. Future involvement in cleaner and safer technologies is an example, just look at the last climate summit. Total disaster.

From what I have seen in my career, companies play a pivotal role in the oil and gas industry, wielding significant influence over the entire production cycle. I firmly believe that with this influence comes a profound responsibility to uphold ethical standards. Companies are not merely profit-driven entities; they are stewards of the environments in which they operate and have a duty to respect human rights, safeguard the environment, and contribute to the social well-being of local communities. This responsibility extends beyond legal obligations and is integral to building trust, maintaining a positive corporate image, and securing the long-term sustainability of oil production operations.

Back in the Sixties when the Groningen gas field concession contract was agreed, the Province made a strong plea for a special revenue stream going to the region, rather than all the gas revenues ending up in the Dutch Ministry of Finance ‘ General revenue’ account. This request by the Province was ignored at the time. This resulted in a situation where the local population is now no longer willing to accept that they are affected by induced earthquakes without receiving any direct benefits from the gas production. The consequence of not sharing revenues fairly with the people most directly effected by the production activities: a stranded asset worth billions of Euros. Key message: give the local people a fair share - don’t ignore them

Communities are people living near extraction or processing sites (neighbors of exploration, drilling, or processing sites) who are directly affected by operations. Communities main interests are protecting their environment, ensuring safety standards to prevent incidents like spills or explosions, and benefiting from the industry through job opportunities or community development projects. Communities have an important role as stakeholders in the oil and gas industry, since support or opposition can affect the feasibility of projects, especially given their proximity to exploration or processing sites

Having a complete land, marine and railway infrastructure plan will contribute to the advancement of goods in the prospected region, efficiently and planned, it can become a button of progress that will not only last during the oil boom but for many years. For example, internet access will be planned with the installation of Starlink antennas in small urban centers by oil companies.

For indigenous communities whose traditional lands are in close proximity to oil and gas operations, involving them in the decision-making processes right from the exploration phase is crucial. This means not just consultation, but active participation in discussions about land use, environmental impact, and benefits sharing. Establish clear revenue-sharing agreements where a portion of the profits from oil and gas operations goes directly to the indigenous communities. This can be used for community development, education, healthcare, and preserving cultural heritage.

Joining and forming Unions - the oil industry is one of the lesser / least unionized industries. And there's an explanation for that too: oil industry is a cyclical industry with ups and downs. Hiring frenzies during the good times, mass layoffs when times are tough. Unions will / may / can negotiate a social plan -or package- for their members, but can't protect them from these layoffs? And yes, workers provide skills and knowledge, but this seems less needed in these modern times. Organic-shale reservoirs, a.k.a. "unconventionals" are mostly exploited in so-called factory-mode, requiring little skills and knowledge. Additionally, knowledge is no longer "required" as AI and ML are, supposedly, capable / superior filling that gap / void.

Oil field workers can do advocating for fair labor practices, prioritizing safety and environmental stewardship, and fostering community engagement. They can also support initiatives that promote the well-being of local communities affected by oil production. By encouraging ethical behavior within the industry.

The development of local labor and professional policies and practices must be supported, for example in Latin America the law and permits stipulate that 25% of workers in engineering projects must be local. With this, it is possible to improve the participation and capacity of local companies and workers in the oil sector.

Workers are those directly employed by the companies, including field workers, engineers, administrative staff, and executives. They directly manage, operate, and oversee various functions from exploration to distribution Have an important role in the success and safety of operations. For this, among its interests are make sure about safe working conditions, fair compensation, job security, and opportunities for professional growth

I think by supporting sustainable and socially responsible practices. Choosing energy-efficient products, advocating for renewable energy sources, and favoring companies with transparent and fair supply chains may influence the industry and create impact on cost.

The sad reality is that consumers have little to no choice. Consumers can decide to boycott a certain oil company, which may result in strategic changes within said company, but that's about it. They have little to no influence on price, which, by the way, in many countries, is mostly (>60%) made up by taxes. Reducing and replacing their consumption of fossil fuels is often not a viable option. There are infrastructure challenges, such as the lack of reliable public transportation, the lack of charging stations. For most in the world, vehicles powered by alternative sources (electric, hydrogen) are simply not in their budget. The choice of going green is, simply put, above their paygrade. And that I mean literally as well as figuratively.

The assumption in carbon taxing is that the demand curve is elastic. Some things consumers can substitute fairly easily, like LED lighting vs incandescent lighting. Switching from home heating oil to gas is expensive and requires the infrastructure. Switching from gas to electric heating is even more so. Geothermal and heat pumps don't work for every home. This is going to take time. Raising taxes does not function if the alternatives are not available. Energy taxes without infrastructure and coordinated planning is lazy and bound to result in lost elections.

This is nonsense for many sources. When using gas sourced from LNG, customers can trace source of origin quite easily. In case of many other oil products such as petrol, line oil etc. this is very difficult. Crude is traded several times between point of origin, refinery, distribution system and finally customer. Petrol at the pump of one major, may have been produced and/or by another

Companies like EQT Corporation, the largest natural gas producer in the U.S., has committed to certified responsibly sourced gas that meets specific environmental and social criteria. Another example is Shell's “Sky Scenario”, which aligns with the goals of the Paris Agreement and includes strategies for a more sustainable energy future, including the responsible sourcing of natural gas. These approaches not only make the production process more equitable and sustainable but also help in building trust and a positive reputation among consumers who are increasingly concerned about the environmental and social impact of their energy choices.

An obstacle to equity is that transparency punishes prime movers. It requires a tremendous amount of effort and systems to align the priorities of the profit motive with the needs and expectations of stakeholders. Only very institutionally mature nations have been able to achieve a fair distribution of benefits (think Norway) and it's well accepted that their model is hardly replicable elsewhere and doesn't even reach the whole value chain (yet). Fully disclosing your challenges can lead to opportunistic and hostile actions from other stakeholders and this issue replicates within stakeholders themselves. That is, workers, communities, governments, companies are not homogeneous groups, but rather a collection of unique individuals.

To make oil production to be more equitable especially in the developing countries, what stands out is the resource governance and human rights. The key is the policies and implementation by governments then the socialization with the oil companies and stakeholders particularly communities. Oil production and its benefits must be a win-win to serve an equitable measure for all. What we have realized is that proper review of these laws and policies are not being cross checked with other stakeholders and this impacts on relationships. Adequate feedbacks and openness is necessary for all stakeholders to improve these laws and policies with a view to make implementation and sanctions agreeable to all. aB

In Nigeria, achieving equitable oil production requires transparent governance, community engagement, and sustainable development initiatives. Implementing fair revenue-sharing mechanisms, fostering local employment, and prioritizing environmental responsibility can benefit all stakeholders. Strengthening regulatory frameworks to prevent corruption, ensuring indigenous communities have a voice in decision-making, and investing in education and healthcare in oil-rich regions are essential steps. Collaborative efforts between government, industry, and local communities are pivotal to creating a balanced and inclusive approach, fostering social and economic development while mitigating the negative impacts of oil extraction.

Beside policy formation as higlited by one of the contributors. In the developing world like ours, it is important to audit the corresponding impacts of this venture on all parties; the communities, government and oil investors. With the aim of ensuring that the oil businesses is translating to meaningful development, training for the host communities; government getting the actual total revenue that due to them and investors been able to make profit on their investments. The only way this can be realised is for all parties to fulfil their own side of the bargain

Henry Kissinger wrote in his thesis that empires fall when they run out of money. At the moment, many countries depend on oil revenue. How is Canada, for example, planning to replace oil and gas revenues? If you want to promote hydrogen gas, find a way to make it more cheaply than natural gas. Find an alternative fuel/energy system that allows people to become rich.