Caught Between a Rock and COVID-19: Sharing the Pain of Onerous Oil and Gas Contracts in the Middle East

Abstract

The obligations under many oil and gas contracts have become highly onerous as a result of the COVID-19 pandemic.Whether on the losing or winning side, governments and companies face difficult choices between—on one hand—negotiating a balanced solution to the contractual imbalances created by COVID-19, and—on the other—invoking legal remedies that could potentially mitigate the burden of onerous performance. This article navigates some of those remedies and, in doing so, offers strategic and tactical considerations for parties operating in the Middle East considering whether to revise, suspend and/or terminate their long-term oil and gas contracts.