To What Extent can Stabilisation Clauses Mitigate the Investor's Risks in a Production Sharing Contract?
Article from: OGEL 1 (2005), in Production Sharing Contracts
Introduction
Stabilisation clausesare usually inserted into contracts to boost the investor's confidence and ensure that the long-term investment will yield the expected results, by shielding the contract from some of the many risks associated with the investment. This paper critically examines the place of stabilisation clauses in petroleum production sharing contracts, analysing its role and importance. It also assesses the extent to which it can stabilise the contract by mitigating the stability risks inherent in a production sharing contract, showing why the mere insertionof stabilisation clauses ...