Legal Stabilization in Petroleum Contracts

Abstract

The International Oil Companies are interested to work in the countries that are in dire need of their investments, provided that these countries guarantee them legislative or legal stability during which they conclude, and thus, they ensure the amounts that are invested in such countries. However, these countries try to protect the sovereignty of their national natural wealth to achieve the economic and development plans. Therefore, in most of the Oil and Gas agreements, the idea of confirming “legal stabilization” has disseminated among the countries which own  Oil reserves and  the related companies, which led to the intensification of conflict and divergence of interests between the contracting parties in light of economic globalization and the attempt to subject it to the rules of international law and the exclusion of the law of the contracting state directly or indirectly, even though one of parties dose not initially belong to this law. All of this urged us to search for the issue of perpetuating the legal stabilization and clarifying its concepts in oil contracts and identifying its types, then evaluating the correctness of its inclusion in those contracts and the extent of its effectiveness and how the principle of “contract sanctity” and the principle of “state sovereignty” can be reconciled, and clarify the legislative insufficiency faced in this field, then declaring its applications locally and internationally.