A STRUCTURAL MODEL FOR ARBITRATING, DISPUTES UNDER THE OIL AND GAS LEASE

Nearly all oil and gas in the United States is det,eloped under some f orm of oil and gas lease The resulting lessor/lessee relationship is f requently put under stress by conflicts that are inherent to the relat ionship. For almost a century the oil and gas lease has been the sourc e of extensive litigation to address conflicts that appear to be an in separable part of the lease relationship. The primary dispute resoluti on techniques currently employed to resolve lease disputes are informa l negotiation and litigation. The oil and gas lease relationship can b e improved by incorporating into the lease document a pre-dispute arbi tration clause which requires the exhaustion of formal negotiation and mediation processes prior to arbitration. Sample contract language an d arbitration rules are provided as drafting prototypes to assist in e valuating the arbitration alternative for addressing oil and gas lease disputes. The development of an arbitration alternative also demonstr ates the need for the creation of an organization that specializes in administering dispute resolution processes for the oil and gas industr y.