Oil & Gas in 2026: International Arbitration

JOAs, LNG Supply Contracts and Investor Protections in the Spotlight

This article is part of the "Oil & Gas in 2026: Emerging Trends & Predictions" report. For the full report, click here.

Several significant international arbitration decisions were handed down for the oil & gas industry through 2025, with the most notable cases concerning joint operating agreements (JOAs), LNG long-term supply contracts and the evolution of the Energy Charter Treaty.

JOAs

The ExxonMobil v. Hess Arbitration

Chevron’s $53 billion merger with Hess finally closed in July 2025, but not until an International Chamber of Commerce (ICC) tribunal had ruled in favor of Hess in the Stabroek JOA arbitration. In that case, Exxon had claimed it had a right of first refusal over Hess’s 30% interest in the Stabroek block, in offshore Guyana, with many commentators suggesting that the ruling could set a precedent for future joint ventures in the oil & gas sector.

The Stabroek block was first discovered in 2015 and quickly raised the profile of Guyana as one of the world’s fastest growing oil regions. The block is operated by Exxon, Hess and China National Offshore Oil Corporation (CNOOC), with their relationship governed by a JOA first signed back in 2014. Exxon and CNOOC initiated the ICC arbitration in 2024, arguing the merger triggered the JOA’s change of control provisions and activated their right of first refusal. The exact language of the JOA has not been disclosed, but it is understood that Chevron and Hess argued—and the tribunal accepted—that the plain meaning of the language be applied, such that the merger did not trigger Exxon’s right.

In light of the confidentiality of the arbitral process, the award does not create a precedent, but it nevertheless highlights the importance of clear drafting in JOAs, particularly with respect to pre-emption rights and change of control provisions.

LNG Long-term Supply Contracts

Venture Global Arbitrations

U.S. LNG company Venture Global was the subject of multiple claims in arbitration that came to a head in 2025 concerning its failure to deliver LNG cargoes under long-term contracts when prices surged in 2022. BP, Shell and other long-term contract holders commenced claims after the exporter opted to sell gas from its Calcasieu Pass LNG complex on the U.S. Gulf Coast on the spot market rather than selling to its long-term contractual counterparties. Each of these claims was the subject of a separate arbitration proceeding, with different tribunals.

In the two most high-profile arbitrations, Shell lost in its claim against the exporter, but BP subsequently prevailed, highlighting how different tribunals can arrive at diametrically opposed decisions even when the underlying fact pattern appears to be very similar (although, the manner in which the claimants presented their respective cases is not known).

Shell is now appealing its decision in the New York Supreme Court, alleging a failure by Venture to disclose material evidence in the arbitration. Additional arbitrations commenced by other buyers, including Repsol, Edison and Galp are still pending.

These cases are the latest evidence of the dramatic impact that the Russian invasion of Ukraine had on LNG pricing back in 2022, and how the delta between the resulting spot prices and the price set in long-term contracts resulted in interrupted contractual performance.

Energy Charter Treaty Rulings

Two important rulings about the Energy Charter Treaty (ECT) were handed down in 2025.

In November, the English Commercial Court ruled that arbitration awards made pursuant to the ECT or the International Centre for Settlement of Investment Disputes (ICSID) are not capable of assignment. The decision, in a case involving Operafund Eco-Invest and Schwab against the Spanish government, is significant. It may stop purported assignees of ECT and ICSID awards, such as related group entities or third-party purchasers, from directly enforcing those awards in England and Wales.

That English Court ruling followed the approval by the European Union in September of an agreement signed by all but one of its member states about the ECT’s investor-state arbitration clause. That agreement provides that the ECT clause cannot serve as the legal basis for intra-EU investment arbitrations, effectively ending arbitration cases being brought by EU investors against EU member states under the ECT.

The rulings come against a backdrop of modernization of the ECT, after reforms proposed in 2024 came into effect on 3 September 2025. Several contracting parties, including the U.K., France and Germany, withdrew from the ECT over concerns about the protection of fossil fuel investments, while the EU’s aversion to intra-EU disputes also drove the need for reform.

Two revisions came into force in September. First, investments involving certain fuels, including high temperature coal tar, fuel wood and wood charcoal, are to be excluded from ECT protection. Second, investments made subsequent to the reforms in the EU and its member states that involve coal, natural gas, petroleum, electrical energy, high-carbon hydrogen or high-carbon synthetic fuels, will also now be excluded.

Further revisions will be provisionally applied, including limitations to the fair and equitable treatment standard, to the full protection and security standard, to the most-favored nation standard and to indirect expropriation.

However, with the application of amendments not universally accepted, it remains to be seen the extent to which a modernized ECT will succeed in better balancing the dual goals of sustainability and investor protection.

Looking Forward to 2026

• Decommissioning Disputes: As we move into the new year, we are expecting to see an increase in decommissioning disputes, with the market for construction contracts to decommission deepwater structures now worth as much as $24 billion. Shutting down obsolete North Sea energy installations alone is a business opportunity worth more than £20 billion over the next decade, according to Britain’s offshore energy trade body Offshore Energies U.K. 
  
  Complex disputes involving the allocation of costs and responsibilities, regulatory compliance and technical or operational issues associated with decommissioning look set to rise as more offshore oil & gas facilities come out of service.
  
  

• LNG Pricing and Delivery Disputes: LNG pricing and delivery disputes will also continue to be prevalent in the year ahead, as market volatility leads to more arbitration cases. Further claims are likely as buyers seek price adjustments or cancel cargoes amid changing market conditions.
  
  
• Sanctions Disruption Claims: The application of U.S. and European sanctions against Russia’s oil industry will continue to disrupt supply chains and projects in the year ahead, giving rise to disputes over the interpretation of contractual provisions and breach of contract.
  
  
• Investor State Disputes: In light of international net zero goals and the impact of changing energy policies on investments, Investor State disputes in the renewable energy sector look set to increase through 2026. For example, policy reversals will likely give rise to breach of legitimate expectation claims as the year progresses.
  
  That said, given the concerns expressed by some commentators that Investor State disputes may be impeding climate progress by prioritizing the interests of investors regardless of climate impact, it is likely that 2026 will also see increased policy change and action. In particular, the UN Framework Convention on Climate Change is considering ways to reform international investment law to better balance the goals of the Paris Agreement with investor protections, in much the same way that the ECT has looked to reform over the past two years.
  
  It also remains to be seen how the Trump administration’s recent operation to oust Maduro might impact arbitration claims against Venezuela. Venezuela is not currently a party to any bilateral investment treaties with the U.S., but it is possible these may be implemented to incentivize investment by U.S. companies in Venezuela. Relatedly, companies with outstanding arbitration awards against Venezuela will have to address how to reconcile these with potential investment opportunities in the country.

Conclusion

Some Big Decisions Set the Stage for an Active 2026

With the Stabroek award highlighting the need for close attention to the drafting of JOAs, LNG supply chains in the spotlight and the ECT continuing to evolve, 2025 was an important one for arbitration in the oil & gas industry.

As we move into 2026, we expect the industry to remain in focus, with disputes likely to increase in relation to decommissioning, LNG pricing and delivery and sanctions disruption.

While efforts will be made to develop policy to protect investors’ interests, this is unlikely to slow the number of Investor State disputes in the near term as the energy transition continues to have repercussions around the world.