Stabilisation and Renegotiation Clauses in Production Sharing Contracts: Examining the Problems and Key Issues
OPEC's Monthly Oil Market Report (May, 2011) depicts that the price of OPEC's Reference Basket increased in April, 2011 by about $8.25 compared to March, 2011 and by $35.76 from a year earlier. The Nymex WTI and ICE Brent contracts also witnessed their highest prices since the global financial crisis of 2008. Oil producers like Nigeria are not just on the verge of a national petroleum industry 'legal revolution' in its quest to ensure maximum benefits accrue from oil and gas resource exploitation, but as overtime found itself in politically and economically unacceptable position as parties to Exploration and Production arrangements with investing Oil Companies.Russia, Venezuela, Bolivia etc. have also been earmarked as producers that consistently engage in petroleum contract reviews and nationalisation to ensure petroleum arrangements yield maximum benefits for the State. Following this background and coupled with the unique attributes of Production Sharing Contracts as a preferred option for arranging upstream petroleum operations, this paper essentially seeks to examine the assertion that- there is no absolute 'contractual security' for contracting parties. By highlighting relevant problems and issues, especially in countries like Nigeria, it points out that contractual instruments like stabilization, renegotiation and adaptation clauses can at best guide and not freeze-up relationship and cooperation inter vivos, towards contractual efficiency. This paper examines the use and legal implications of stabilisation and renegotiation clauses in production sharing contracts (PSCs) in the petroleum industry, especially as a means of guaranteeing contractual security. It identifies relevant issues and comments on problems arising from the use of these clauses in guiding the relationships of parties, especially as contractual instruments for risk management.
Types of contracts used in the upstream oil industry and related issues.
This dissertation was written as part of the MSc in Energy Law, Business, Regulation and Policy at the International Hellenic University. Due to the recent discoveries of hydrocarbon reserves in the Eastern Mediterranean I often have thought what oil companies actually do to explore and produce hydrocarbons and I wanted to figure out how these operations are regulated. Therefore, the focus of the dissertation is on the various standard types of contracts used in the upstream oil industry and its primary aim is to introduce this energy sector and become a practical guide to anyone who is interested presenting in a comprehensible manner the legal and operational aspects of the upstream activities. My concern was to include the more essential information I could in order to provide a solid understanding of the mechanisms used to safeguard the relationships between the state which opens its upstream oil industry and the International Oil Company. I would like to express my deepest gratitude to my supervisor Prof. Theodore Panagos for sharing his energy expertise. His valuable suggestions, assistance and contributions were very helpful during the development of this dissertation. Also, I wish to express my gratitude and love to my father, my wife and my daughter for their valuable and constant support.
Negotiating mining agreements : past, present, and future trends
Mineral sector regulatory approach political factors affecting the mining agreement bargaining process the diversity in the forms of modern mining agreement arising from changes in host-country political will how trends in the evolution of mining agreements relate to political will host-countries' changing political will versus transnational mining companies' need for stability findings, viewpoints and conclusions.