MANAGING CONFIDENTIALITY AND CONFLICTS OF INTEREST IN A COMPETITIVE ENERGY MARKET

Abstract

Producers and other participants in the petroleum industry are in the midst of an increasingly competitive energy market. It is now the case that throughout Australia producers of natural gas are competing not just with substitute sources of energy but with one another. No longer do producers only compete for prospective tenements, rather their competitive activity extends from acreage acquisition through to the burner tip. The emergence of deregulation in the gas industry and the opportunities for competitive activity have been discussed at recent APEA conferences.1

The aim of this paper is to examine where conflicts between interest and duty may arise between joint venturers who are now directly, or through affiliated companies, competing for marketing opportunities. We examine how and why such conflicts may arise and whether it is possible to manage them while still participating in traditional forms of joint venture exploration, production and in some cases marketing.

For example, are producers able to satisfy their obligations of good faith and preserve confidentiality in joint venture exploration and production activities without compromising their ability to independently pursue the marketing of their share of production?