1. Recent Developments in Negotiating International Petroleum Agreements.
Since there have been structures of public government, economic interest in minerals and technical ability to extract them, there has been mineral legislation and methods of giving permission to miners - by the owners of the land or the owner of subsurface mineral rights - to extract them. Issues which we now consider important, for example, access to land, payment to the owner/sovereign for extraction of minerals, supervision of mining activities and safety, both for miners and third parties, ancillary economic contribution of mining to local communities - have been around for a very long time. These issues are still relevant and their regulation - in legislation, subsidiary regulations, in mineral agreements and licensing conditions evolves and responds to advances in technology, to new economic concepts and financing methods, to new political attitudes and constraints. When viewing current licensing methods negotiated petroleum and mineral development agreements - one can therefore both come to the conclusion that nothing is veritably new and that current agreements contain significant innovation.
The present paper does therefore not pretend to claim that there is a revolution with dramatic innovation in current licensing, but rather surveys the sometimes substantive, sometimes rather more formal - changes in current licensing and negotiating practice.
Current licensing and negotiating has to be viewed before the political and economic background:
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, emergence of strong state resource companies supported by foreign loans. Resource endowment was seen as an important lever to gain economic power and private investment was excluded, restricted and constrained, an attitude best illustrated in Decision 24 of the Andean Pact of 1976. This attitude has changed, first gradually and currently, in the aftermath of the collapse of the supposedly ever-rising petroleum price in 1985 and the wake of the collapse of state socialism, with dramatic speed, scope and depth. Encouragement of foreign investment is the order of the day, remnants of the 1970s restrictions are dismantled everywhere, ex-socialist countries are rushing into foreign investment as a panacea for their woes and strongly entrenched state enterprises are being restructured and move towards privatization.