8th Africa Oil & Gas, Trade and Finance Conference and Exhibition8th Africa Oil & Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

LEGAL IMPLICATIONS OF LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

Bertrand MontembaultBertrand MontembaultAvocat au Barreau de Avocat au Barreau de ParisParis

NOT AN OFFICIAL UNCTAD RECORD

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

Transport: transborder pipelines

Transborder pipeline without transit country

Chad-Cameroon pipeline / 8 February 1996 (oil)

Transborder pipeline with transit country

Algeria-Tunisia-Italy – “Transmed” / 19 and 21 October 1973 (gas)

Algeria-Morocco-Spain-Portugal - “Maghreb – Europe Gas” / 16 November 1996 (gas)

Nigeria-Benin-Togo-Ghana - “WGAP” / 31 January 2003 (gas)

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

OVERVIEW OF TRANSBORDER OVERVIEW OF TRANSBORDER

OIL & GAS OPERATIONS IN AFRICAOIL & GAS OPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

Joint development of offshore oil & gas (boundary claims)

Libya – Tunisia Joint Oil Company (1988)

Senegal - Guinea-Bissau Management and Cooperation Agency (1993)

Nigeria and Sao Tome Joint Development Authority (2001)

Nigeria and Equatorial Guinea Joint Development, Transport and Marketing Agreement (2002)

OVERVIEW OF TRANSBORDER OVERVIEW OF TRANSBORDER

OIL & GAS OPERATIONS IN AFRICAOIL & GAS OPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

A FUNDAMENTAL KEY ISSUE:

PROJECT UNIT V. TWO OR MORE STATES’ SOVEREIGNTIES

OTHER KEY ISSUES

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

A FUNDAMENTAL KEY ISSUE: A FUNDAMENTAL KEY ISSUE: PROJECT UNIT V. TWO OR MORE STATES’ SOVEREIGNTIES

1. International law background of transborder oil & gas projects

1.1 Nature of international law

“hard” law v. soft law

conventional law v. customary law

status of international law under domestic legislation

1.2 Scope of existing international law

of specific character: law of the sea

∗ offshore transboundary deposits

∗ submarine pipeline

of a general nature: international trade law (freedom of transit, non- discrimination, etc.)

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

A FUNDAMENTAL KEY ISSUE: A FUNDAMENTAL KEY ISSUE: PROJECT UNIT V. TWO OR MORE STATES’ SOVEREIGNTIES

2. Requirement of specific international law arrangements

2.1 Institutional approach

creation of an international joint entity with legal personality in each State

reduction of State’s sovereignty depends on:

∗ existence of boundary claim

∗ powers vested in the entity:

• licensing powers

• regulatory powers

• coordination role

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

A FUNDAMENTAL KEY ISSUE: A FUNDAMENTAL KEY ISSUE: PROJECT UNIT V. TWO OR MORE STATES’ SOVEREIGNTIES

2.2 Coordination approach

transborder pipelines

∗ harmonisation of relevant domestic legislation

∗ inter-governmental body

∗ importance of project agreements

joint development areas:

∗ compulsory joint ventures between States and NOCs

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

THE OTHER KEY ISSUES: THE OTHER KEY ISSUES:

Key issues common to joint development areas and pipelines

• Ownership

• Technical standards (including environmental standards)

• Financing: security package

∗ security over assets

∗ security over cash flows

• Stabilisation (stability – hardship – force majeure)

• Dispute settlement

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA

8th Africa Oil and Gas, Trade and Finance Conference and Exhibition8th Africa Oil and Gas, Trade and Finance Conference and ExhibitionMarrakech – 26-30 April 2004Marrakech – 26-30 April 2004

THE OTHER KEY ISSUES: THE OTHER KEY ISSUES:

Key issues specific to pipelines

• Capacity allocation and right of access

• Transit (importance of offtake contracts: ToP/SoP)

LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICAOPERATIONS IN AFRICA