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Abstract(s)
This study identifies and critically analyzes the evolution of stabilization clauses in
international petroleum contracts entered between the Host Government (“HG”) and
International Oil Companies (“IOCs”) with a focus on Mozambique. It then compares
Mozambique’s stabilization provisions to those in three other African countries that have an
active oil and gas industry. All four countries seek foreign investment in their oil and gas
sectors. Foreign investors, in turn, seek to mitigate the many legal risks that arise in contracts
signed with HGs as sovereigns. Investors look for stabilization and arbitration provisions in
Petroleum Exploration & Production Contracts (“EPCs”) that increase the security of their
investments. The article finds that Mozambique offers considerable security in its contracts
compared to Angola, Ghana and Tanzania. Only Ghana offers a similar degree of stabilization
in its contracts as Mozambique offers. The Angolan government does not resort to many of
these stabilization mechanisms, probably because of the maturity of its petroleum industry,
despite presenting quite a risky profile when compared to the other countries. Tanzania still
has a long way to go in offering security to investors through stabilization clauses.