Published 5 September 2019
Following the dissolution of the Soviet Union, the newly formed resource-rich countries have each striven to occupy a major position in Eurasian economy. Azerbaijan and Kazakhstan are two of the former Soviet republics that arguably have most successfully realised this goal in the petroleum sector, largely by attracting foreign investors. Their success in attracting and securing these investments has been dependent on contractual production-sharing agreements (‘PSAs’) as well as the implementation of a series of laws designed to protect and secure foreign investment. Production-sharing agreements establish the legal, fiscal and commercial framework between a multinational oil company and a concerned state with respect to each other. This article focuses on the legal and taxation aspects of the PSAs initiated by Azerbaijan and Kazakhstan from a comparative perspective. The article exposes the main legal issues and explores the most controversial contractual commitments inserted into this type of agreement. It goes on to propose practicable solutions to overcome the outlined challenges and makes concrete recommendations to the governments of these states.
This paper will be part of the TDM Special Issue on "The Changing Paradigm of Dispute Resolution and Investment Protection in Post-soviet and Greater Eurasian Space". More information here www.transnational-dispute-management.com/news.asp?key=1745