Business pulse: oil and gas
Interaction with governments and regulatory bodies
Regulatory compliance is a challenge in any industry, but the circumstances of many oil and gas companies — a lot of which are compelled to operate in a wide variety of regulatory environments — make it a unique discipline.
New methods of extraction, such as hydraulic fracturing, present risks to regulators who are unsure of the wider impact of their large-scale use. These create new challenges for governments and short time frames in which to make critical decisions that have some profound, long-term implications for oil and gas companies.
“Regulations have been introduced in areas that couldn’t possibly have been predicted 10 years ago, which makes it difficult to assess the outlook for the future.” Doug Johnston, EY, UK
Gaining approval from individual jurisdictions to develop reserves requires an appreciation of the specific circumstances involved in each case. Companies must take into account the competing interests and priorities of governments, which all have political or economic imperatives to consider. A positive public image can help in this regard; companies must ensure that governments will want to be seen doing business with them.