International Energy Investment
INTERNATIONAL ENERGY INVESTMENT Thomas W. Waelde* This article will survey the-sometimes substantive, sometimes only formal-changes in petroleum law governing development in most (non- US) petroleum producing countries as well as current licensing and negoti- ating practices. Given that the former socialist countries (CIS) are cur- rently the main testing ground for oil and gas investment and its legal instruments, the article will focus on how existing legislative and con- tractingllicensing practices fare in the environment of these transition econ- omies. In fact, it is in and through the challenge posed by the transition economies that petroleum legislation and contracting will be forced to evolve. The 1970s were the time of strong assertion of state sovereignty over economic and political emancipation of developing countries, resulting in large-scale nationalization, renegotiation, and emergence of strong state resource companies supported by foreign 1oans.l Resource endowment was seen as an important lever to gain economic power, and private invest- ment generally was excluded, de-packaged and re~tricted.~This attitude has changed, first gradually and then with dramatic speed and scope,3 in the aftermath of the collapse of the supposedly ever-rising petroleum price in 1985 and in the wake of the collapse of state socialism. Encouragement of foreign investment is the order of the day: remnants of the 1970s restric- tions are dismantled everywhere, ex-socialist countries are rushing into for- eign investment as a panacea for their woes,5 and strongly entrenched state * Professor of International Investment, Petroleum & Mineral Law Jean-Monnet Chair of European Economic and Energy Law (1995-98) and Executive Director Centre for Petroleum/Mineral Law & Policy, University of Dundee (CPMLPIDundee), with the collaboration of Andrew Philip-Speed (Lecturer in Energy PolicyTTax, CPMLPIDundee; Ph.D.
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