Flashpoints in the international energy industry, from oil drilling in the Arctic to gas field disputes in the eastern Mediterranean, will mean big opportunities for law firms – if they are prepared to reassess how they practise, according to City consultants.
A report published last week by Jomati Consultants says that as new reserves of oil and gas are exploited with techniques such as ‘fracking’, instructions are likely to mushroom for law firms with the right capabilities, in particular global reach.
‘The energy sector is in a state of flux,’ said Jomati’s head of research, Richard Tromans. To date, however, few law firms have truly integrated energy into their practice groups, he observed.
‘As the energy sector continues to break down traditional barriers,’ lawyers will need to change the way they work, for example advising on ‘pure’ energy law rather than being sector-specific, he added.
The report highlights a number of key factors that are likely to prompt this change in practice. The Arctic’s reserves of oil and gas will lead to firms receiving more instructions in joint ventures and special agreements.
Similarly, an increase in litigation is likely to follow the use of fracking to extract gas from rock formations, along with other forms of unconventional gas extraction. It is an ‘easy target, given the recorded phenomenon of earth tremors and use of chemicals in the high pressure water used in the process’, the report says.
Intellectual property is also highlighted as being of critical importance, given the increased focus on new technology to ‘drive efficiency and enlarge energy supply’.