A Legal Examination of Stabilization Clauses in Petroleum Contracts in Cameroon

Journal: Legal Research & Analysis

Publication: 2024-11-09 · Vol. 2 No. 1

DOI: 10.69971/hr2qsp86

Abstract

This study aims to explore the legal examination of stabilization clauses in petroleum contracts in Cameroon. Stabilization clauses forms one of the pillars in protecting the interest of foreign investors in petroleum contractual arrangements. These clauses act as a shield to investors as they protect oil companies from the modification attempts in the agreement by host countries by subsequent legislative changes. Their legal validity in the Cameroonian petroleum industry has been guaranteed by the Petroleum Law of the country. However, the findings of this research reveals that the applicability of these clauses remains questionable as the Cameroonian government can implement nationalization and expropriation based on public utility, security or national interest, with suitable compensation. Furthermore, the Cameroonian government can introduce new legislative or regulatory changes in the petroleum contracts, the terms of which must be agreed by both sides and if an agreement is not reached, the matter can be resolved through arbitration.