Production Sharing Agreements in Africa: Sovereignty and Relationality

NUS Law Working Paper No. 2018/031

NUS - Centre for Maritime Law Working Paper 18/11

36 Pages Posted: 18 Dec 2018

Date Written: December 17, 2018


This paper considers Desta’s critique of how contracts in the extractive industries involving host nations in Sub-Saharan Africa and international companies have been drafted and adjudicated. It first sets out the options that the state has in setting out a legal framework for the development of its hydrocarbon sector before going on to examine the dynamic risk matrix that characterises oil and gas projects. It then sets out the principles underpinning the design of fiscal systems for upstream oil and gas. With these foundations laid, the paper goes on to complexify the understanding of stabilisation in modern state-investor contracts, first, in terms of self-adjustment mechanisms and, secondly, in terms of the shift towards economic equilibrium clauses. It then examines the extent to which these contracts are best understood as relational in nature and concludes by proposing the development of principles to guide arbitral adjustment of contract terms based on this observation.

Keywords: Production sharing agreements, Africa, state-investor contracts, oil and gas, relational contracts, arbitral adjustment

Suggested Citation

Paterson, John, Production Sharing Agreements in Africa: Sovereignty and Relationality (December 17, 2018). NUS Law Working Paper No. 2018/031. Available at SSRN: or

John Paterson (Contact Author)

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

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