Managing Petroleum Complexities and Uncertainties via TEFCEL Model

The Petroleum Industry or Oil and Gas Industry includes the global processes of exploration, appraisal, development, extraction, production, transfer, refining, transporting (often by oil tankers and pipelines), and marketing of petroleum products. Varieties of products will be the outcome of the upstream investment in this industry. The crude oil or natural gas extracted from the upstream projects will be transported in a down line to the downstream oil and gas refineries and petrochemical plants. The largest volume products of the industry are fuel oil and gasoline (petrol). Petroleum (oil) is also the raw material for many chemical products, including pharmaceuticals, solvents, fertilizers, pesticides, and plastics. The industry is usually divided into three major components: upstream, midstream and downstream. There is always a debate whether the Midstream operations shall be considered as part of the Upstream or Downstream projects, thought they are often included in the downstream category, unless those operations are expressly envisaged as part of the upstream development plan.

The complexities, uncertainties, long term required investment plan, big sizes of the projects, multiple nature of the activities, technology oriented industry and other elements makes the petroleum industry contracts difficult to design and conclude. Therefore, any conventional contract negotiation and contract drafting approaches may not be valid and effective when dealing with the Upstream, Midstream and Upstream contracts. Thus, a comprehensive, integrated, knowledge base, and highly qualified approach of TECEL Model is required to cater these complexities and difficulties.