Understanding, Negotiating and Drafting Oil and Gas Industry Contracts
The accelerated pace of change in the oil and gas industry make this one of the world’s most challenging and complex sectors in which to understand, draft and negotiate contracts.
Falconbury have developed this unique 3-day programme focusing on current practice and developments in the oil and gas industry. It will serve as either a comprehensive introduction for newcomers or a useful update/refresher for those with experience in the industry.
- PART ONE deals with the different types of agreements that are in common use. The expert speakers will guide participants through the various contracts focusing on understanding the key issues together with drafting techniques.
- PART TWO takes a closer look at general contract terms – terms which are common to all types of agreements and have an enormous impact.
- PART THREE focuses on negotiation skills with specific reference to and case studies based on oil and gas industry contracts.
Who should attend?
In-house lawyers, procurement managers, contract managers, contract analysts, contract engineers representing international petroleum companies, contractors and sub-contractors to the petroleum industry together with host governments.
PART I – Understanding and drafting different types of upstream oil and gas agreements
Introduction and overview of industry
Introduction to the different types of upstream oil and gas agreements
- Overview of contractual and fiscal structures
- Confidentiality and non-disclosure agreements
- Exclusivity agreements
- Joint bridging agreements
- Areas of mutual interest agreements
Synthetic acquisition structures
- Practical issues
- Licences and contracts
- Sharing risks and rewards with governments and co-investors
- Petroleum licences: award and contents
- PSC’s/PSA’s: award and contents
Offshore rig hire agreements
- Rights and obligations of the parties
- The rig market
- What the oil companies provide
- Two main commercial risks associated with rig hire
- The Rig Hire Contract
- The IADC Form
EPC contracts and risk based contracting
- Basic features of an EPC contract
- Key oil and gas specific clauses
- Key performance clauses
- Liquidated damages
- Performance guarantees
- Key general clauses
PART II – General contract terms and risk allocation
General obligations of the contractor and the company
- Performance standards
- Data collection and reporting
- Audit rights and financial reporting
- HSSE requirements
PART II – General contract terms and risk allocation (continued)
Host Government rights and obligations
- Political risks
- Sovereign immunity
- Land – licensing, leasing
- Convertibility of currency and exchange rates
- HSSE regulations
- Assistance, consents
- Local content requirements
- Applicable laws
- Disputes – forum and enforcement
- Host Government petroleum regimes
- HSSE risks
- Anti-corruption regulations
Understanding contractual liabilities
- Liabilities for personal injury or death
- Liability for late delivery, performance or similar
- How to limit the maximum aggregate damages
- Fundamental breach v breach of fundamental obligations
- Sample clauses
PRACTICAL WORKSHOP – Drafting contractual guarantees and bonds
- Advance payment bonds
- Retention bonds
- Performance guarantees
- Parent company guarantees
- Example clauses
Indemnity and hold harmless clauses
- Indemnity – why the need?
- Distinction between indemnity clauses and exclusion clauses and limitation of liability clauses
- Distinction between indemnity and guarantee
- Simple indemnity and mutual indemnity
- Importance of drafting – judicial suspicion
- UKCS Mutual Hold Harmless Regime
Exclusion clauses in the offshore industry
- Drafting clauses to withstand judicial scrutiny
- Example clauses
- The default legal position
- Indemnity clauses
- Tortuous liability
- The Contra Preferendum Rule
- Construction of the contract
- UCTA – core provisions
- Recent case law
Termination clauses and disputes
- Clauses you must consider in your contracts to ensure financial and reputation risks are covered
- Right to terminate under the contract
- Right to terminate under applicable law
- Consequences of termination
- Getting it ‘right’
- Getting it ‘wrong’
International bribery legislation and its impact on oil and gas contracts
- Understanding the new framework dealing with corruption for many operators in the oil and gas business
- The Act and its impact on non-UK companies
- Changing approaches to ‘grease’ payments
Part III – Negotiation skills
Workshop leader: Rob Maguire
The rise and rise of the negotiator
Nothing exemplifies the modern oil and gas company or contractor as much as the growth of joint ventures, sub-contracting and licensing. All of these require the executive to be able to negotiate and, often, to be able to lead others through the negotiation process.
- The increase in negotiated relationships
- Technical AND commercial skills
- Recognising a negotiation
- Great role models
Practical exercise: Negotiate and succeed
Working in teams, delegates are asked to resolve a multi-variable, multi-party business problem. The output of the exercise will form the backdrop for the following sessions on structure and influencing.
Structure for control
The research tells us that negotiation success is not related to any single aspect of the complex interactions that take place in any negotiation. However, above all else the party that negotiates best gets the best result. The keys to negotiating well are controlling the negotiation and managing the process.
- Control for success: Key planning checklist to negotiate well
- Structure for success: Creating the space to agree
- Trading for success: Understanding relative values
Personal style and negotiation
This session helps us hold a mirror up so that participants can reflect on their own style. We look at why other styles irritate us – and how we negotiate with those people we find difficult to deal with.
- Our lead style (and our fall back style)
- The A to E of negotiating styles
- Personal strengths and weaknesses
Practical exercise: Moving into engagement
Working in teams, delegates are asked to use their knowledge of their own style and those of others in their teams to agree strategies and tips for dealing with other styles and getting the most out of the negotiation.
Influencing and persuasion
It can be argued that the more we can influence someone to our position and the greater agreement we can build, the less we have to give away in our negotiations. This session looks at how people are persuaded and how the expert negotiator can use this knowledge to their benefit:
- Persuasion psychology
- The range of levers available
- Focusing your persuasion
The expert faculty
Scott C. Styles is senior lecturer at the University of Aberdeen Law School. He is Assistant Editor of Daintith and Willoughby, the leading book on UK oil and gas law. He has many years experience of teaching and researching oil and gas law, with a particular focus on regulatory matters and contracting.
Dr Ned Swan is International General Counsel at IX Power Ltd, and a leading international expert and advisor on energy policy, law and regulation. He has been an adviser to the European Commission, Council of European Energy Regulators, national governments, energy markets, energy traders and major energy firms. He has been a partner at three major international law firms, where he advised on all aspects of the energy business including contracts, joint ventures, concessions, production, refining, purchasing, shipping, trading, environmental issues and litigation. Ned is also a visiting professor at the Faculty of Law at University College London where he originated, and taught the LLM (Master’s degree) course in Regulation of Financial Markets. He is admitted to the New York and US Federal Courts, and is a member of the Energy Institute and the UCL Energy Institute. The Legal 500 has praised… ‘Ned Swan’s impressive energy related work.’
Nicolas Bonnefoy is a partner in the energy, transport and infrastructure department in the London office of Ashurst. He has a particular focus on the mining, and upstream oil and gas sectors in Africa. Nicolas’ experience includes acting for major Chinese, European and North American companies, governments and national oil companies in structuring, securing and implementing acquisitions and disposals of oil and gas and mining assets throughout Africa, as well as the negotiation of farm-in and farm-out agreements and SPAs, exploration and production contracts and other ancillary contracts.
Guy de Speville joined MMS in 2013 as a Partner in the Corporate Department, based in the London Office. He spent the best part of the previous 12 years working in the UK, Asia, the US, South America and Africa with Hess Corporation. Prior to that Guy was an associate in private practice in London. Guy is admitted as a solicitor in England and Wales and has over 15 years’ experience in the international oil and gas exploration and production industry. He has negotiated with government departments at the highest levels, as well as with a number of national oil companies, independent oil companies and their contractors. Through his career Guy has handled many M&A deals, farmouts and other transactions. He has advised on multiple large EPC development contract negotiations as well as smaller supply contracts in various jurisdictions. Guy has particular expertise in onshore oil and gas activities having been deeply involved over the last six years in large and small M&A transactions, joint ventures, regulation and operational matters in North Dakota, Pennsylvania, the UK and elsewhere.
Siân Fellows is a Partner in the Energy & Natural Resources Group of the London office of international law firm Reed Smith. Siân has wide experience of dispute resolution in energy and natural resources trading and shipping, including mediation, international arbitration and proceedings before the Commercial Court. She also advises clients in connection with non-contentious matters arising in these practice areas, including sale and purchase contracts, general terms and conditions, derivatives, insurance, letters of credit, pre-export financing, security documents and other aspects of trade finance. Before rejoining Reed Smith in 2010, Siân spent almost two years in a senior in-house position with Shell International Trading & Shipping Co Ltd (“STASCO”).
Marco Kielstra is an international legal counsel with Van Oord N.V. and is permanently seconded to Van Oord’s Offshore business unit in Gorinchem, the Netherlands. With Van Oord Offshore, a contractor servicing the offshore oil and gas industry, Marco supports the Offshore business unit’s 4 subdivisions on projects worldwide with an emphasis on shallow water pipeline installation, subsea rock installation and related dredging activities from tender and execution stage up to completion and, if any, claim/dispute settlement.
Rob Maguire runs his own consultancy and his experience spans the full range of issues from developing an appropriate contract strategy and building a performance dashboard to negotiation and conflict resolution to dealing with the inevitable management issues that arise in any long-term relationship. Through his consulting, coaching and mentoring and skills development interactions, he helps major organisations transform their thinking and approach to their commercial relationships.
Hamish McArdle is a partner in the international law firm of Baker Botts LLP with many years experience in the UK and international energy sector. He advises clients on all aspects of the energy value chain including large-scale projects and corporate and commercial matters, with a particular focus on those associated with the upstream and midstream oil and gas sectors and LNG. Hamish is recognized in Chambers UK, Who’s Who Legal, and the International Who’s Who Oil & Gas Lawyers. He counsels clients in Europe, Africa, the Middle East and South America.
Steve Nichols is a partner in the Dispute Avoidance and Resolution Team at Trowers & Hamlins LLP, where he specialises in contentious construction and engineering matters. Steve’s particular speciality is technically complex construction and engineering disputes. In recent years he has been heavily involved in a wide spectrum of projects across the energy sector, as well as work in the infrastructure, transport and building (commercial, residential and mixed-use) sectors. His experience includes both domestic and international projects, and in recent years he has acted on matters not only in England and Wales but also Scotland, Northern Ireland, mainland Europe, the Middle East and the Americas.
Euan Palmer is Head of Oil and Gas Litigation at Maclay Murray & Spens. He joined the Commercial Dispute Resolution Department in 2004, having crossqualified in England in 2001 after moving from New Zealand. He is a member of the firm’s Oil Industry Sector Group and has a focus on disputes specific to the Oil & Gas industry. He has acted for both contractors and oil companies in a range of disputes arising out of drilling services contracts, and for operators in disputes arising under JOA’s, buy-in agreements and other inter-operator arrangements. He is a member of the Association of International Petroleum Negotiators and the United Kingdom Energy Lawyers Group. He has extensive experience in international arbitration, and conducts litigation in all divisions of the High Court. Euan further qualified as a Solicitor Advocate in 2005.
Richard Williams is a partner at Pinsent Masons in London. He has experience in advising on all aspects of corporate insolvency law in connection with receiverships, liquidations and administrations. Richard has acted for insolvency practitioners, banks, commercial clients, directors and creditors. His experience is primarily in dealing with contentious aspects of insolvency law including investigations and asset recovery. Richard is also experienced in handling a wide variety of commercial issues. He has particular expertise on bonds and guarantees, and frequently advises on risk exposure issues in relation to major projects.
Rob Maguire (13-15 Jun 2016, 21-23 Nov 2016)
Robert Maguire runs his own consultancy and his experience spans the full range of outsourcing and vendor management issues from determining what to outsource, through developing an appropriate contract strategy and building a performance dashboard to negotiation and conflict resolution to deal with the inevitable management issues that arise in any long-term relationship. Through his consulting, coaching, mentoring and skills development interactions, he helps major organisations in the public, private and not-for-profit sector transform their thinking and approach to their commercial relationships. Robert’s clients span a range of industries including pharma, consumer products, telecoms, transport and public sector both in the UK, the US and the Middle East. He is an accomplished line manager and consultant experienced in all aspects of purchasing and supplier management. Prior to establishing his own consultancy Rob was European Purchasing Manager for Reckitt & Colman plc where he established a European procurement function for the purchase of raw materials and sub-contracted products. He has worked as a consultant at Price Waterhouse and Ernst & Young and has worked with a number of pharma companies including Glaxo Welcome (GSK).
Ned Swan (13-15 Jun 2016, 21-23 Nov 2016)
Dr Ned Swan is Partner at Elborne Mitchell LLP and International General Counsel at IX Power Ltd, and a leading international expert and advisor on energy policy, law and regulation. He has been adviser to the European Commission, Council of European Energy Regulators, national governments, energy markets, energy traders, and major energy firms. He has been a partner at three major international law firms, where he advised on all aspects of the energy business including contracts, joint ventures, concessions, production, refining, purchasing, shipping, trading, environmental issues and litigation. Ned is also a visiting professor at the Faculty of Law at University College London where he originated, and taught the LLM (Master’s degree) course in Regulation of Financial Markets. He is admitted to the New York and US Federal Courts, and is a member of the Energy Institute, and the UCL Energy Institute. The Legal 500 has praised… ‘Ned Swan’s impressive energy related work.’
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Continuing professional development
This course qualifies for the following CPD programmes:
- Solicitors Regulation Authority: 17.50 hours
Previous customers include...
- Vetco Gray Controls Limited
- Bazan Group
- BG Trinidad and Tobago
- Bolivar Trading Inc
- ConocoPhillips (UK) Limited
- Cooper Energy
- Craig Ferguson & Co LLP
- Crown Office Row Chambers
- De Medeiros & Associates
- Energie Beheer Nederland
- Eni Ukraine LLC
- ERG SPA
- Gazprom EP International
- JOANNOU & PARASKEVAIDES GROUP
- Melrose Resources Plc
- North Sea Petroleum Holding
- Petrofac Ltd
- PUBLIC GAS CORPORATION OF GREECE (DEPA)SA
- Repsol Exploration Murzuq
- Saipem Ltd
- SBM OFFSHORE
- SLP Engineering Ltd
- STATOIL Norway
- Tupras Turkish Petroleum Refineries Corp
- Vfm Consulting CoLtd
What previous delegates say...
“Insightful and useful”
Lolade Abiola, Contracts Manager, Caverton Helicopters Ltd
“Very practical and useful course.”
Angele Ramsaransing- Karg, Officer SR. Legal Affairs, State Oil Company Suriname NV
“Very interesting discussions, helpful, a lot of things learnt.”
Arailym Kuanyshkereeva, Contracts Specialist III, TengizChevrOil LLP
Justin Uzoma Ezeala, Counsel, Exxonmobil Oil Nigeria Plc
“The speakers were good at getting people involved”
Jacqueline Langerod, Contract Manager, Siemens AS
Anatoly Krasnov, Chief Legal Counsel, Lukoil Overseas Service BV
“Great variety of speakers; different background and experience reflected in presentations”
Ulla Achleitner, Legal Counsel, OMV Gas & Power GmbH
“Excellent course-very useful-practical!”
Mr G P Lourantos, Managing Director, GP Lourantos & Partners E E/Petro-Energy
“Well prepared, knowledgeable speakers with real-world examples.”
Sidney Nijeboer, Contracts Manager, ROSEN Europe BV
“A good course for managers in the oil and gas sector”
BW Dwarkasing, Deputy Director, State Oil Company Suriname
“The training was instructive and covered most of the issues one encounters in drafting and negotiating oil and gas industry contracts”
Olubunmi Akingbehin, Contracts & Legal Advisor, WellManned
“All speakers were very professional in their presentation and interactive work, speaking understandable to all attendants”
Ibrahim Bosto, Assistant General Manager, ENERGOINVEST dd SARAJEVO
“Excellent course ”
Mr G P Lourantos, Managing Director, GP Lourantos & Partners E E/Petro-Energy
“Presentation and slides were very well done and informative”
Sanam Torabi, Process Engineer, Itok Group
“The course was very well conceived”
Dr Guilherme Dode Daniel, , Petr
“Very experienced speakers”
Abdullah Luqman, , Al Suwaidi & Luqman (Yemen Legal)
“Thank you for time and making me a part of this education program. It was indeed a knowledgeable experience ”
Binish Khan, Legal Assistant, DANAGAS
13-15 Jun 2016
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Book by 15 Apr to get the early booking price shown above.
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Venue: Hilton Green Park Hotel, London
21-23 Nov 2016
We can customise this course to meet the requirements of your organisation.