The politics of oil, gas contract negotiations in Sub-Saharan Africa

Much attention has been paid to the management of revenues from petroleum
resources in Sub-Saharan Africa. An entire body of literature on the resource curse has developed which points to corruption during the negotiation of contracts, as well as the mismanagement of revenues on the continent. The analyses provide the basis for policy advice for countries as well as donors; transparency and anticorruption initiatives aimed at lifting the curse flourish. Though this paper is sympathetic to these initiatives, it argues that the analysis may underestimate the inherently political nature of the negotiation of contracts.
Based on a review of the existing literature on contract negotiations in Africa,
combined with a case study of Tanzania, the paper argues that the resource curse need not hit all countries on the African continent. By focusing on changes in the relative bargaining strength of actors involved in negotiating processes, it points to the choices and trade-offs that invariably affect the terms and conditions of exploration and production activities. Whereas international oil companies are often depicted as being in the driving seat, the last decade’s high oil prices may have shifted power in governments’ favor. Though their influence has declined, donors may still want to influence oil and gas politics under these circumstances. This requires careful analysis of the game. Support to building capacity in the institutions that govern and regulate the petroleum sector as well as to local communities and authorities may be avenues of engagement for donors.