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The Journal of World Energy Law & Business 2008 1(1):98-112; doi:10.1093/jwelb/jwn001
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© The Author 2008. Published by Oxford University Press on behalf of the AIPN. All rights reserved.

Stabilization and adaptation in oil and gas investments

Piero Bernardini*

* Of Counsel, Ughi e Nunziante Law Firm – Rome; former General Counsel ENI – Rome; former Vice-President ICC International Court of Arbitration – Paris.

The first 150 words of the full text of this article appear below.


   1. Introduction
 
There are various contractual arrangements through which a party (normally a foreign private party) makes an investment in the oil and gas fields. The most important category is represented by agreements in the field of petroleum exploration and production, be they in the form of concession agreements, production sharing contracts, service contracts or other types of contractual relations.

Two characteristics are common to these various agreements. Firstly, they are concluded by the investor with a State or a State entity, the latter being entrusted by the State with the task of administering in the public interest the country’s petroleum resources.1 The second characteristic is their duration. By its nature, an investment implies the establishment of a relation with the territory of the host State by far exceeding that of a normal commercial contract between private parties. The very nature of the activity to be deployed by the investor under this . . . [Full Text of this Article]


   2. Stabilization and adaptation in practice
 
Stabilization
Adaptation
Change of circumstances triggering renegotiation
Effects of the change on the contract
Objective of the renegotiation
Procedure for renegotiation
The solution in case of failure of the renegotiation process
The role of the international arbitrator in the contract adaptation
The role of the ICSID arbitrator

   Annex 1
 
Qatar, Model exploration and production sharing agreement of 1994 (art 34.12 ‘Equilibrium of the Agreement’)

   Annex 2
 
Petroleum production sharing agreement of 10 November 1995 between the State Oil Company of Azerbaijan and a Consortium of Oil Companies

   Annex 3
 
Supplemental agreement of 1961 between the Government of Kuwait and American Independent Oil Company (art 9)

   Annex 4
 
Petroleum production agreement between the Government of Ghana and Shell Exploration and Production Co of Ghana Ltd of 1974 (clause 47b)

   Annex 5
 
Long-term crude oil supply contract (art V(12))

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