Confidential information has significance in every industry, but perhaps unusually so in the oil and gas industry by virtue of the nature of the business. There is confidentiality not just in patentable processes but also in raw data obtained through exploration activity, and in the interpretations placed upon raw data, even if the data itself is in the public domain.
Perhaps even more importantly, the level of risk and capital-intensive nature of exploration and development have meant that joint ventures are frequently utilized, with many additional implications for the use of confidential information:
- Confidential information must frequently be shared in order to attract potential partners to commit capital to a farm-in or joint venture project, and yet those potential partners are at least theoretically and may often actually be in competition with respect to the very opportunity being considered.
- In a joint venture, one participant is selected as operator, and it is the operator which in the first instance obtains additional raw data through joint operations, typically with certain obligations to share such information. Once again, while they have a common interest with respect to the particular lands in question, the operator and the other participants remain at least theoretical competitors with respect to adjacent lands which may be prospective.
- Even with respect to confidential information concerning the particular lands in question, the interests of joint venture participants may diverge in a number of ways with respect to the use which may be made of such information.
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