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Upstream Regulation: An Introduction

The petroleum industry has undergone significant changes in recent decades. As the industry has developed, it has become progressively more regulated, competitive, expensive and challenging. The balance of power has shifted from international oil companies to host governments; the changes in government take over the decades illustrate this shift. Another trend is increased concern about the environmental and social impact of petroleum operations, coupled with tightened enforcement mechanisms and heightened international interest. This trend has already changed the ways in which the petroleum industry operates. The perception of international oil companies as powerful entities beyond the control of host governments, with little or no care for the environmental or social impact of their operations, is outdated. In addition, the definition of ‘international oil companies’ today is much wider, as more and more companies engage in international operations to fill the gaps where the majors could not develop.