Are you looking for a way into promoting transparency and public understanding of your country’s oil and gas contracts? At OpenOil we are looking for partners to work with across the world to take the conversation around contracts to the next level by beginning to examine oil contracts country by country, working with model contracts.
We would like to identify by Friday October 19th partners in five countries who we will work with over the next few months to produce a joint preliminary of model contracts. OpenOil will contribute professional technical advice to enable country-level partners to formulate a list of questions to be addressed to government on those model contracts. We will then jointly publish the questions in English and any relevant national language.
If you or your organisation would like to work on this with us, please fill in the form here by then. We guarantee to work with partners in five countries to publish such analysis by March 1, 2014. See below for more detail.
What Are Model Contracts and What We Want to Do With Them?
Only a few countries have already published their final signed contracts. But many more have published “model contracts” which give the general structure and language, and many of the terms. These are industry documents in fact published to give oil companies an idea of the likely agreements to be signed, so that they can determine whether they would like to bid or not.
Model contracts have limitations. They do not contain the all-important financial terms, and you can never be certain that any particular clause or article has been retained in the same form in the final signed contract – the government and companies may have negotiated changes.
But they do represent a general structure to the contracts. And that allows the public in oil producing countries to begin work on understanding contracts, which lie right at the heart of the industry, by getting an idea of the structure of their country’s contracts.
What we basically want to achieve is that each country gets more specific and moves away from a general, theoretical debate of “why should contracts be published” to “what are the specific questions around these contracts in this country” such as “What bonuses are due to be paid at the start of commercial production?” or “How much money the contract specifies to be spent on social projects in areas where Petroleum is produced?”
This process itself should answer one of the main objections put forward by those who oppose contract transparency – what public use or understanding could come of it? Analysis of the model contract also familiarises people with the basics of understanding and reading their country’s oil sector contracts.
OpenOil and the Center for Public Integrity pioneered this approach in Mozambique this summer, when it jointly publishing a list of questions on the Mozambique model contract of the 4th licensing round, which closed in 2010 with an award of the Lower Zambesi area to the Norwegian company DNO. The letter was addressed to Esperanca Bias, Mozambique’s Minister of Resources, on the occasion of Mozambique’s accession to the EITI mechanism, and as a result the minister was asked about the confidentiality of Mozambique’s contracts at a press conference at the EITI summit in Sydney, Australia.
This is only the start. We know that either model or signed contracts for the following countries are currently publicly available: Afghanistan, Angola, Azerbaijan, Bangladesh, Brazil, Burkina Faso, Cambodia, Colombia, Congo, Cyprus, DRC, Ecuador, Equatorial Guinea, Ethiopia, Ghana, India, Iraq, Jordan, Kenya, Liberia, Libya, Mauritania, Mexico, Mongolia, Mozambique, Nicaragua, Peru, Senegal, Sierra Leone, Tanzania, East Timor, Trinidad and Tobago, Turkmenistan, Uganda.
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