Oil, Gas Contracts And Islamic Principles

Abstract

A great amount of the reserves of crude oil and natural gas resources are located within the territories of the countries the majority of the population of which are Muslims. There is a growing concern among the population of these countries that the deeds and the actions of their states should be in accordance with the Islamic principles. The development and conclusion of oil and gas contracts in accordance with the sources of Islamic law such as Qur’an, Sunnah, Ijma and Qiyas is of particular importance. The concepts of land ownership, licencing, taxation of minerals are analysed separately in order to reach an inductive outlook. In this respect, Buy Back Contracts are formalised. Buy Back Contracts are regarded to have significant resemblances with risk service contracts. As a form of oil and gas contracts that are formalised in accordance with the Islamic principles, Buy Back Contracts, still, need upgrades in order to be in full conformity with Islamic considerations.