The Rights and Obligations of the Host Country to Produce Natural Gas and Oil

Abstract

The host country is the primary party in regulating and exploiting oil and natural gas resources, as it holds permanent sovereignty over its natural wealth. The host country's rights include controlling exploration and production operations, establishing legal and regulatory frameworks, and receiving financial returns through taxes, royalties, and production shares, in addition to ensuring environmental protection and achieving sustainable development. Its rights also include stipulating technology transfer, training national personnel, and promoting local content. In return, the host country is committed to provide stable and attractive investment climate, respecting contracts and agreements concluded with operating companies, guaranteeing legal protection for investments, and facilitating the administrative and technical procedures which are essential for production operations. It also bears the responsibility of balancing its sovereign interests with the requirements of investors in order to ensure the continuity of production and the efficient exploitation of resources.