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.
Renegotiating acquired rights in the oil and gas industries: Industry and political cycles meet the rule of law
1. The issue: Do the instruments of good governance and the rule of law have any significance when faced with the force of the energy and resource industries cycles? As we experience a so far sustained upwards trend in the price of petroleum and minerals, 1 governments of producing countries worldwide are engaged in a fundamental revision of the terms under which international investors originally carried out their investment. 2 Changes are most extensive in the cases where contracts with host states (or their state enterprises) were negotiated in times of relatively low oil, gas and mineral prices (in particular between 1985 and 1999); in the cases where a fundamental re-orientation of a host state’s policy towards foreign and private investment has taken place (eg in countries where governments now pursue a policy of anti-Western (in particular antiUSA) resource nationalism); and in the cases where new governments have reversed visibly and significantly the policies of privatization of state-owned operated upstream oil and gas and mining assets carried out in the 1990s. The renegotiation demands are more acute where the original contracts did not provide for a balanced internal adaptation system providing, now, a politically acceptable outcome for the host state. Even an internal adjustment system which responds to changes in profitability and mineral rent (eg with rate-of-return-based financial regimes) may not be able to fully accommodate host state revision demands if its structure reflects unequal bargaining power at the time of negotiation. Contracts concluded with quite inexperienced governments, for example newly independent petroleum states that emerged after the collapse of the Soviet Union have come under pressure, in particular if the explosion in oil prices has not led to a
The evaluation of the competency perception of inspectors in using new instructional technology
Abstract The purpose of this study is to find out the evaluation of inspectors in regards to their competency perceptions towards the use of new instructional technologies. This is a qualitative model research. The target population of this study consisted of 25 inspectors serving within the borders of TRNC in 2011. Data was collected by an “interview form” developed by the researcher. The interview form consisted of 6 items. Content analyze, frequency (f) and percentage (%) techniques were used to analyze the data. This research pointed out that: “concerns on falling behind the teacher”, “training needs”, “decreasing training support within the years” and “non existing policy on IT support” are critical factors affecting an inspector's competency perceptions in using new instructional technologies.