When the American Texas-based oil company Kosmos Energy spilled low toxic oil-based mud (LTOBM) in the Republic of Ghana’s maritime waters, the fact that this spillage occurred was not in contention. The issue was the authority of the Committee appointed to look into the matter to impose a monetary fine – especially in respect to the quantum imposed – as neither its terms of reference had stipulated that, nor was there any provision in the law empowering it so to do. As a tussle ensued between the host government and Kosmos over the payment of the fine, as is often the case in such matters in such jurisdictions, two dominant perspectives came into play. From the Western perspective, it was a case of an African government using underhand tactics to impose its will on an international oil company (IOC), whilst from the perspective of the host state, it was yet another classical case of an IOC from the Western world trying to use bullying, intimidation and the power of the Western media to intimidate, bully and force its way through. This matter also highlights a persistent bane in the regulation of the upstream petroleum industry in developing countries where rampant interference by the government has often caused undesirable results, to the detriment of all parties concerned.
Stephens et al. (Sat,) studied this question.