Expropriation of oil and gas investments: Historical, legal and economic perspectives in a new age of resource nationalism

摘要

Expropriation is one of the extreme noncommercial risks faced by investors. The typical threats that the private sector operators face are the expropriation of assets by host states, the tightening of fiscal terms or so-called 'creeping expropriation' and the imposition of restrictions on their operations that may amount to the expropriation of their assets. In extreme cases, host governments even opt for outright expropriation.rnThe current wave of high oil prices means that producers are increasingly seeking to maximise their returns with the result that the international oil companies (IOCs) face expanding creeping expropriation and sometimes even outright expropriation. This process is cyclical and is likely to recur because the balance of interests between state and private sector in such contracts is dynamic, and relative bargaining power between the parties changes over time. Part of the risk that must be evaluated by foreign investors is, therefore, the potential danger of an intensification of resource nationalism during the term of their concession. This can only be properly appreciated if the nature of resource nationalism is understood.rnThis paper evaluates the relationship between resource-rich states, investors and IOCs; examines expropriation from a legal standpoint; considers how expropriated assets can be properly valued by setting out how past compensation has been determined, and offers a proposal for a possible alternative basis of valuation.