Oil Contracts in Sudan: Developing an Action Plan: Oil Contracts in Sudan: Developing an Action Plan J. Jay Park, Partner & Chair of International Energy Practice Group, Macleod Dixon LLP Calgary, Canada Jay.Park@macleoddixon.com Date NESI Network- ECOS Conference "Oil and the Future of Sudan" Juba, Sudan November 1-3, 2006 Tip: Right click on the picture and choose “Replace Clip Object” to insert different picture from Clipart. To Create another Title Slide click on the “Insert Title Slide” button on the toolbar or select Insert>Duplicate Slide.


Developing an Action Plan: Developing an Action Plan PROBLEM: NPC not operational SOLUTIONS: establish evidence of this as a grievance in respect of CPA implementation but so what? what would GOSS be doing if NPC was operational?


NPC Functions: NPC Functions "Formulate public policies and guidelines in relation to the development and management of the petroleum sector" well, FORMULATE THEM prepare the public policies and guidelines in relation to development and management of the petroleum sector that GOSS would want to implement if NPC existed


NPC Functions: NPC Functions "Monitor and assess the implementation of those policies to ensure that they work in the best interests of the people of Sudan" this is more difficult to do in the absence of policies is access being denied to oil operations? if not, then commence monitoring of GOSS policies to the extent possible if monitoring not possible, add to grievance


NPC Functions: NPC Functions "Develop strategies and programs for the petroleum sector" DEVELOP THEM this is a "soft" provision of the CPA difficult to assess concretely what it achieves "Negotiate and approve all oil contracts for the exploration and development of oil in the Sudan, and ensure they are consistent with the NPC’s principles, policies and guidelines" DEVELOP THE "MODEL CONTRACT" THAT YOU WOULD APPROVE fiscal terms development terms social & environmental terms this requires GOSS to engage with stakeholders use "best international practice" in preparing this contract


Action Plan Next Steps: Action Plan Next Steps all of this will take time if NPC still not operational once all this is ready, then: raise this as an issue with the parties that were involved in bringing about the CPA point out the lack of progress, and what GOSS would have NPC doing if it was operational point out the extent to which activities are non-compliant with what GOSS would have the NPC do raise this as an issue with oil companies they prefer peace to war NPC formulation is one of the key requirements to continued peace discuss direct implementation of GOSS's policies


Next Problem- Existing Contracts: Next Problem- Existing Contracts PROBLEM: other oil aspects of CPA are not being implemented "If existing contracts are deemed to have fundamental social and environmental problems the Government of Sudan will implement necessary remedial measures" concretely define these social and environmental problems obtain copies of all contracts determine what "social and environmental" issues would be added to address the problems these should be based on the Model Contract provisions


Next Problem- Affected Persons: Next Problem- Affected Persons "Persons whose rights have been violated by oil contracts are entitled to compensation. On the establishment of these violations through due legal process the Parties to the oil contracts shall be liable to compensate the affected persons to the extent of the damage caused" commence a suitable "legal process" that would define the violations focus on claims that have a clear economic impact on affected persons present the outcome of this process to the parties to the oil contracts (who must have a role in the legal process itself)