Skip Navigation


The Journal of World Energy Law & Business Advance Access originally published online on October 7, 2009
The Journal of World Energy Law & Business 2009 2(3):243-258; doi:10.1093/jwelb/jwp015
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
2/3/243    most recent
jwp015v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Related articles in J World Energy Law Bus
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Alexander, F.
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2009. Published by Oxford University Press on behalf of the AIPN. All rights reserved.

Comment on articles on stabilization by Piero Bernardini, Lorenzo Cotula and AFM Maniruzzaman{dagger}

Frank Alexander*

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


   1. JWELB stabilization articles that are the subject of this comment
 
I thank the JWELB for inviting me to comment on the following three JWELB articles on stabilization:

Mr Piero Bernardini’s article, ‘Stabilization and adaptation in oil and gas investments’(2008) 1 JWELB 98;
Mr Lorenzo Cotula’s article, ‘Reconciling regulatory stability and evolution of environmental standards in investment contracts: Towards a rethink of stabilization clauses’ (2008) 1 JWELB 158; and
Professor AFM Maniruzzaman’s article ‘The pursuit of stability in international energy investment contracts: A critical appraisal of the emerging trends’ (2008) 1 JWELB 121.


   2. Definitions
 
‘GPC’ means government petroleum contract (includes all genres: production sharing, royalty and tax, and service contracts).1

‘HC’ means the party signing a GPC on the ‘HC side’ (could be the HC itself, or an instrumentality, such as an NOC or a petroleum agency).

‘IOC’ means international oil company.

‘HSE’ means health, safety and environment.

‘NOC’ means national oil company.

‘PSA’ means productions sharing agreement and/or production sharing contract.

. . . [Full Text of this Article]


   3. Different types of ‘stabilization provisions’
 

   4. Differences in stabilization classification and terminology
 

   5. Bernardini article
 
Updating would improve this article
Lack of clarity regarding HC sovereign power to commit acts of ‘creeping expropriation’, and even to expropriate per se
Economic Balancing provisions are not new
An Economic Balancing provision may apply to the HC (as well as to the IOC)
There is no categorical duty, in the context of implementation of an Economic Balancing provision, to negotiate in good faith
HC ‘promise’ of stabilization may not be enforceable if the governing law is the law of the HC
Critical issues pertinent to implementation of Economic Balancing provisions by way of arbitration (and expert determination)

   6. Cotula article
 
Under many UPRs HCs are indeed able to apply to the IOC an evolving international environmental standard without breaching/triggering an applicable stabilization clause
Economic Balancing provisions do not generally provide for HC payment of compensation to the IOC in the event that the HC and the IOC cannot reach agreement regarding an applicable amendment to the GPC
Economic Balancing provisions are not a panacea
Enforceability of stabilization provisions

   7. Maniruzzaman article
 
Overall a very worthwhile article
Significance of international law as ‘governing law’
Generally, if there is no Freezing provision (or other stabilization provision) the IOC will not be entitled to damages in the event of ‘creeping expropriation’
Comparative analysis of different types of stabilization provisions
Economic Balancing provisions are not a panacea
Confusion regarding whether there should be a requirement that a party may not implement an Economic Balancing provision in a case where an act of such party caused the economic ‘imbalance’ in the first place
A new HSE law might breach/trigger a stabilization provision
Litigating alleged breaches of UPR stabilization provisions under investment treaty right to fair and equitable treatment v under an ‘umbrella clause’
The importance, from the IOC perspective, of having both an expropriation provision and a stabilization provision in a GPC

Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?

Related articles in J World Energy Law Bus:

JWELB Overview

J World Energy Law Bus 2009 2: 175-177. [Extract] [Full Text]