Sovereignty Over Petroleum Resources: The End of an Era?

Abstract

During the 1970s developing countries sought to assert sovereignty over their petroleum resources by pursuing interventionist policies aimed at their oil industries. During the 1980s the balance of power tilted away from the developing countries. The slump in oil prices created a new environment which prompted a review of oil policies. These states are now according higher priority to promoting investment than to affirming the principle of sovereignty. The welcome mat extended to foreign companies by the socialist countries and some of the major oil-exporting countries is a sign of this turnaround. With the rise of free-market policies and the concrete results recently achieved in oil resource management has come a less rigorous application of the sovereignty principle than in the past. This paper presents an analysis of how the principle of sovereignty has been interpreted and applied in the developing countries over the past 20 years.