Quote:
Originally Posted by Makarov
I take your point but, in any commercial relationship, there is always a risk that the regulatory or operating environment might suddenly change. Usually, that is part of the risk tolerance required to enter into an otherwise profitable agreement (which, for fifteen years, it appears these agreements were.) A right of unilateral repudiation, without penalty, at the first sign of troublesome change seems like a remarkably favourable provision for the energy companies involved.
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The difference being that in a normal commercial relationship, the risk is that an unrelated 3rd party (ie the government) will be changing the regulatory/operating environment.
With these contracts, the government is both the counterparty AND the one in charge of the regulatory environment.