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State Contracts in the Globalized World

State Contracts in the Globalized World and On 1 May 2006, the Bolivian President Evo Morales decided to place the oil and gas reserves ofhis country under State control. 1 President Morales' decision was carried out through military occupation of the energy fields. As a result, foreign producers were deprived of their control of the oil and gas fields and all future sales would be through the State-owned energy company. Foreign companies were given 180 days to renegotiate the existing contracts with the government or leave the country. The nationalization by Bolivia of foreign investments involves the various issues surrounding State contracts. State contracts in general refer to contracts between a State government and an alien. Many such contracts are related to foreign direct investment and take the fonn of licences or concession agreements whereby the host country authorizes the foreign investor to explore natural resources such as oil, gas, coal and other minerals. As such contracts are closely concerned with the economic development of the host country, they sometimes are considered as development agreements. The nature, characteristics and binding force of State contracts triggered interesting discussions in the past following nationalization or expropriation by the host countries of foreign investments. With the deepening http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of World Investment and Trade Brill

State Contracts in the Globalized World

Journal of World Investment and Trade , Volume 7 (6): 849 – Jan 1, 2006

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Publisher
Brill
Copyright
Copyright © Koninklijke Brill NV, Leiden, The Netherlands
ISSN
1660-7112
eISSN
2211-9000
DOI
10.1163/221190006X00018
Publisher site
See Article on Publisher Site

Abstract

and On 1 May 2006, the Bolivian President Evo Morales decided to place the oil and gas reserves ofhis country under State control. 1 President Morales' decision was carried out through military occupation of the energy fields. As a result, foreign producers were deprived of their control of the oil and gas fields and all future sales would be through the State-owned energy company. Foreign companies were given 180 days to renegotiate the existing contracts with the government or leave the country. The nationalization by Bolivia of foreign investments involves the various issues surrounding State contracts. State contracts in general refer to contracts between a State government and an alien. Many such contracts are related to foreign direct investment and take the fonn of licences or concession agreements whereby the host country authorizes the foreign investor to explore natural resources such as oil, gas, coal and other minerals. As such contracts are closely concerned with the economic development of the host country, they sometimes are considered as development agreements. The nature, characteristics and binding force of State contracts triggered interesting discussions in the past following nationalization or expropriation by the host countries of foreign investments. With the deepening

Journal

Journal of World Investment and TradeBrill

Published: Jan 1, 2006

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