Ye Xiong
Deputy Director of the Business Management Research Office
Research Institute of Natural Gas Economy, PetroChina Southwest Oil & Gasfield Company
Xiong Ye, Deputy Director and Senior Analyst at the Economic Research Institute of PetroChina Southwest Oil & Gasfield Company, leads economic evaluation and ESG risk management. A CFA charterholder with master’s degrees in Petroleum Science (UK) and Engineering (China), she previously worked as a reservoir engineer at CNOOC. She has published extensively in SCI/EI-indexed journals, holds multiple patents, and promotes sustainable innovation in the oil and gas industry through data-driven approaches.
Participates in
TECHNICAL PROGRAMME | Energy Leadership
ESG and Governance
Forum 28 | Technical Programme Hall 5
28
April
14:30
16:00
UTC+3
The oil and gas sector in emerging markets faces significant environmental, social, and governance (ESG) risks arising from environmental fragility, social instability, and regulatory uncertainty, posing challenges to sustainable energy transitions. Developing co-governance frameworks that integrate energy law with global ESG standards is essential for effective risk management. This study employs behavioral game theory to examine interactions among governments, enterprises, and communities, analyzing how legal, market, and social mechanisms collectively mitigate ESG risks and inform evidence-based policy design.
A co-governance framework is proposed, harmonizing enforceable energy laws with voluntary ESG compliance through policy coordination and stakeholder engagement. The framework is operationalized using a multi-agent game model based on Quantal Response Equilibrium (QRE), which accounts for bounded rationality, social preferences (e.g., inequality aversion), and non-rational behaviors (e.g., loss aversion). The model simulates strategic interactions among governments (strict or lenient regulation), enterprises (high or low ESG strategies), and communities (cooperation or protest). Dynamic payoff functions incorporate market profits, compliance costs, regulatory incentives, and social fairness considerations. Monte Carlo simulations demonstrate that combining strict regulation with ESG incentives increases high-ESG outcome probabilities by 15 % to 20 %, achieving stable equilibria. Among oil and gas cooperation modes, Production Sharing Contracts (PSCs) yield the highest compliance probabilities (0.75 to 0.82), driven by robust regulatory frameworks and incentives, while Concession Agreements show lower compliance (0.55 to 0.65) due to weaker oversight and higher protest risks. Joint Ventures achieve moderate compliance (0.65 to 0.72), requiring enhanced coordination. Sensitivity analyses reveal that a 0.2 increase in government incentives boosts PSC compliance by 7 %, and a 10 % increase in community engagement reduces protest costs, fostering cooperation.
These findings inform policy recommendations, prioritizing the adoption of PSCs, implementation of green subsidies, standardization of ESG reporting, and establishment of community dialogue platforms to enhance compliance and equity. Financial and infrastructural constraints necessitate international financing and dynamic monitoring systems to optimize regulatory and incentive outcomes. By providing data-driven governance strategies, this study enhances transparency, stakeholder collaboration, and sustainable practices in the oil and gas sector, contributing to global energy accessibility and sustainability.
Keywords: Energy law, ESG standards, behavioral game theory, ESG risk management, emerging markets, sustainable energy transition, corporate governance
A co-governance framework is proposed, harmonizing enforceable energy laws with voluntary ESG compliance through policy coordination and stakeholder engagement. The framework is operationalized using a multi-agent game model based on Quantal Response Equilibrium (QRE), which accounts for bounded rationality, social preferences (e.g., inequality aversion), and non-rational behaviors (e.g., loss aversion). The model simulates strategic interactions among governments (strict or lenient regulation), enterprises (high or low ESG strategies), and communities (cooperation or protest). Dynamic payoff functions incorporate market profits, compliance costs, regulatory incentives, and social fairness considerations. Monte Carlo simulations demonstrate that combining strict regulation with ESG incentives increases high-ESG outcome probabilities by 15 % to 20 %, achieving stable equilibria. Among oil and gas cooperation modes, Production Sharing Contracts (PSCs) yield the highest compliance probabilities (0.75 to 0.82), driven by robust regulatory frameworks and incentives, while Concession Agreements show lower compliance (0.55 to 0.65) due to weaker oversight and higher protest risks. Joint Ventures achieve moderate compliance (0.65 to 0.72), requiring enhanced coordination. Sensitivity analyses reveal that a 0.2 increase in government incentives boosts PSC compliance by 7 %, and a 10 % increase in community engagement reduces protest costs, fostering cooperation.
These findings inform policy recommendations, prioritizing the adoption of PSCs, implementation of green subsidies, standardization of ESG reporting, and establishment of community dialogue platforms to enhance compliance and equity. Financial and infrastructural constraints necessitate international financing and dynamic monitoring systems to optimize regulatory and incentive outcomes. By providing data-driven governance strategies, this study enhances transparency, stakeholder collaboration, and sustainable practices in the oil and gas sector, contributing to global energy accessibility and sustainability.
Keywords: Energy law, ESG standards, behavioral game theory, ESG risk management, emerging markets, sustainable energy transition, corporate governance
