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영어

The expropriation is the most critical issue in development of oil and gas to International Oil Companies. Huge amount of money and high techs are required for oil and gas exploration and exploitation. With expropriation, investors will lose assets invested in oil development and the chance to get oil or gas being produced from the project, resulting to be the serious threat to any International Oil Company.
There were so many examples of outright expropriation in Iran, Libya, and Mexico in former century. But, the method of expropriation has been different due to the political and economic circumstances. Historically, it is the trend that expropriation follows the favorable policy of host government to International Oil Company to lure them for the country’s economical purpose.
The basic rationales of expropriation have been self defense, independence, sovereignty, and the principle of equity. Resource nationalism became an international custom since 1952, UN resolution 626 and 1962 UN resolution 1803.
The expropriation without compensation is deemed to be an illegal one.
However, if expropriation has public interest and is indiscriminative with fair and just compensation in accordance with due process of law, the expropriation is legal under the public international law.
In this article, the cause and background of expropriation are dealt with, then the difference between outright and creeping, direct and indirect expropriation became expropriation are ‘expropriation’ is the critical issue because of the face that expropriation will be given any compensation, while there will be compensation for any action by the host government which is not expropriation.
The final issue in this research is how to decide the amount of compensation. This issue has practical meaning. Theoretically, whether restitution is possible for illegal expropriation and how to account the amount as the compensation in legal expropriation are hot problems.
Although there are judicial and theoretical solutions for compensation, in practice whether the judicial decision might be enforced should be considered.
As a company which wants to develop oil and gas in overseas, it has to anticipate the most serious political issue, expropriation, and to prepare for any solution before. Prudent consideration and to make the agreement with practical manner with keeping the understanding on the actual result of expropriation in mind are necessarily required.