Foreign companies often advocate the use of a “stability clause” in the quest for certainty of contractual provisions. This clause seeks to secure the oil contract and benefits therein for the oil operator, against future government action or changes in the law.
Stabilization clauses freeze the essential provisions of the contract.
Different countries have used various forms of this clause. Ghana for example, has from time to time, used a version of the stability clause which allows for changes of contract terms by mutual consent.
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