ABSTRACT
Concessions were common in the age of colonisation. As a reaction to the extensive influence of huge companies in the economic and political affairs of sovereign states, politicians and intellectuals from third world countries sought to decrease the scope of foreign company control and operations in the development and exploitation of natural resources. This approach attempted to decrease foreign companies’ roles in national projects and sought the limitation of activity, interference and presence of these companies in different phases of oil and gas operations, especially in the management stages.
Despite the end of colonisation, the view towards limiting investing companies’ involvement in oil projects became the policy of developing oil-rich nations. This was to the extent that any type of foreign company presence in oil projects would be construed as plundering by the international companies which endangered the economic independence of the states and the state’s ownership over its natural resources. This was very much reflected in the 1990s structure of buy-back contracts.
Hence the prevailing tendency among countries hosting foreign oil exploration and exploitation appeared to be to obtain full control over performance management and the administration of operations. This however leads to borrowing methods that remove the liability of the investing company and entail no guarantee for the transfer of technology to the host state. This seems inconsistent with the interests of developing states that generally have low-level technological capacity and their need for the transfer of high technical skills from more capable foreign companies.
