Image Database Export Citations


The Structure and Contributions of Relational Contracts: Theory and Evidence from Oil and Gas Unit Operating Agreements

Show full item record

Type: Book
Author: Libecap, Gary D.; Smith, James L.
Conference: Conference of the International Society for New Institutional Economics
Location: St. Louis, MO,
Conf. Date: September 19-21
Date: 1997
URI: https://hdl.handle.net/10535/5723
Sector: Global Commons
Region: North America
Subject(s): new institutionalism
common pool resources
energy industry--oil
energy industry--gas
Abstract: "This paper provides new theoretical clarification and empirical evidence about relational contracts written for the exploitation of oil and gas reservoirs in the United States and Canada. To mitigate common pool losses, oil fields often are developed under unit operating agreements. These agreements are classical relational contracts: They are long term (often 20 years or more), include many parties (typically ten or more firms), involve considerable uncertainty about geological and economic conditions, address site-specific investments, and align the incentives of the oil-producing firms over the life of the contract to maximize the economic value of the reservoir without repeated re contracting. The paper presents a theoretical framework describing the essential elements necessary for unit operating agreements to be successful as relational contracts. It examines 60 unit operating agreements to determine whether the theoretical provisions are found empirically."

Files in this item

Files Size Format View
The structure a ... t operating agreements.pdf 408.2Kb PDF View/Open

This item appears in the following document type(s)

Show full item record