1. 8th Africa Oil & Gas, Trade and Finance Conference and Exhibition Marrakech – 26-30 April 2004 LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICA Bertrand Montembault Avocat au Barreau de Paris NOT AN OFFICIAL UNCTAD RECORD

2. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 OPERATIONS IN AFRICA OVERVIEW OF TRANSBORDER OIL & GAS OPERATIONS IN AFRICA

3. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 26-30 April 2004 LEGAL IMPLICATIONS OF TRANSBORDER OIL & GAS OPERATIONS 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 OIL & GAS OPERATIONS IN AFRICA

4. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 OPERATIONS IN AFRICA

5. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 1.1Nature of international law  “hard” law v. soft law  conventional law v. customary law  status of international law under domestic legislation 1.2Scope 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 OPERATIONS IN AFRICA

6. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 2.1Institutional 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 OPERATIONS IN AFRICA

7. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 26-30 April 2004 A FUNDAMENTAL KEY ISSUE:  A FUNDAMENTAL KEY ISSUE: PROJECT UNIT V. TWO OR MORE STATES’ SOVEREIGNTIES 2.2Coordination 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 OPERATIONS IN AFRICA

8. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 OPERATIONS IN AFRICA

9. 8th Africa Oil and Gas, Trade and Finance Conference and Exhibition Marrakech – 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 OPERATIONS IN AFRICA