Cutbacks by resource firms to spark disputes with governments -report
* Arbitration cases in oil/gas soared tenfold in decade to 2010
* Firms, governments struggle over proceeds as prices fluctuate
By Eric Onstad
LONDON, Nov 28 (Reuters) - Disputes between resource groups and governments are likely to keep increasing as commodity prices fall and companies slash spending on new projects, according to a report by London-based think-tank Chatham House.
"In the current climate, companies are focused on cutting expenditures and cutting their investments, especially on big greenfield projects," Jaakko Kooroshy, a research fellow at Chatham House and an author of the report, told Reuters.
Over the first decade of this century, international arbitration cases between companies and governments in the oil and gas sector shot up tenfold compared with the previous decade while those in mining increased nearly fourfold, the report said.
Disputes ramped up during periods of high prices as many governments felt they were not getting a fair share of profits from their resources, but the current slump in commodity prices has not dampened the tension.
The price of copper is down by nearly a third since touching a record of $10,045 a tonne in 2011 and gold has tumbled 35 percent since hitting a record of $1,920 an ounce the same year.
Chilean copper producer Antofagasta and Canada's Barrick Gold have gone to international arbitration to demand compensation after abandoning hope of mining the Reko Diq copper and gold project in Pakistan's poorest region of Baluchistan, where the provincial government refused a licence for the venture. Continued...