Unquenchable thirst: the outlook for energy disputes in Africa.

Author:Chalamish, Efraim
Position:International Law in a Multipolar World

This panel was convened at 3:15 pm, Thursday, April 4, by its moderator, Richard Deutsch of Andrews Kurth LLP, who introduced the panelists: Rukia Baruti of Africa International Legal Awareness; Efraim Chalamish of New York University School of Law; David Haigh of Bumet, Duckworth & Palmer LLP; Sami Houerbi of the Office of the Regional Director for the Eastern Mediterranean, Middle East & Africa, International Chamber of Commerce; and Noriko Yodogawa of the Energy Charter Secretariat. *


By Efraim Chalamish ([dagger])

It is a great honor for me to share with you my views and experiences on energy disputes in Africa as part of the ASIL's 2013 Annual Meeting. While energy disputes in Africa have multiple legal and policy aspects, I would like to focus on the economic and political context, because without understanding the broader picture it will be difficult to analyze the state of existing and future energy-related disputes in Africa.

Energy has become a critical component of the African continent's growth story. In the last five years, oil production in Africa went up 30% and natural gas production has doubled. Analysis predicts that by 2016 off-shore drilling will be 30% of world gas production, of which Africa has 30% of investments. Consequently, Africa will become one of the most important energy producers. This new economic reality affects the level of foreign investment in the continent by foreign investors and the balance between foreign investors and protection of national interest in the region. Africa's oil and gas boom is only part of the broader economic revolution in the continent, energized by the rising middle class and consumerism.

While the energy industry in Africa is not entirely new, the nature of the industry has changed over time. In the past we could not see more than one or two international investors in a particular country. Most local markets were, in fact, a monopoly run by a foreign energy company with strong political, economic and military ties to the foreign colonial power. African democratization and rising competition in the global economy have brought many new energy players to the region. The concept of a traditional colonial energy power, such as Total in Africa, has disappeared.

The new macroeconomic and political trends are indeed a blessing to the continent. Yet this good news is mixed with significant challenges, one of which is the risk of...

To continue reading