Understanding stabilization techniques in production sharing agreements: some remarks

In the context of international energy and natural resource development agreements international investors and their lenders of capital tend to pin much hope in the so-called stabilization or freezing clauses for the protection of investment against host governmental regulatory and administrative interferences with such investment. There may be often pitfalls even in the well-drafted stabilization clauses. The legal advisers and drafters of such international venture contracts need to be aware of such possible pitfalls and well-guarded while dealing with this particular issue.