Negotiating and Drafting Oil & Gas Contracts (Dubai)

The accelerated pace of change in the oil and gas industry makes this one of the world’s most challenging and complex industries in which to understand, draft and negotiate contracts. The legal and regulatory framework of upstream oil industry contracts is constantly changing, therefore it’s critical that all lawyers, commercial and contracts managers working in this sector are up-to-speed. The current focus is a greater emphasis on standard form agreements.

Falconbury have developed this unique 3-day programme focusing on current practice and developments. It will serve as either a comprehensive introduction for newcomers or a useful update/refresher for those with experience in the industry.

• PART ONE of the programme 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 – including dispute resolution clauses, contractual guarantees and warranties, risk identification and allocation, general obligations of the parties, contractual liabilities and indemnities and jurisdictional issues.
• 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.

The delivery style

This highly interactive programme aims to deliver applied training through a balanced blend of practical learning. The presenters will use a mix of trainer input, practical exercises and business cases from the upstream oil and gas industry to ensure you leave the programme with new skills and knowledge that can be put to use in the workplace straight away. Places are limited to ensure interactivity within the group.

What are the objectives of this seminar?

By attending this seminar, you will:

• GAIN a knowledge and understanding of the different types of agreements that are in common use in the upstream oil and gas industry
• BECOME familiar with the general contract terms that are encountered in most upstream oil and gas industry contracts
• FIND out more about the problems encountered when working in different jurisdictions
• UNDERSTAND the rights and obligations of the contractor
• LEARN about dealing with disputes in upstream oil and gas contracts
• RECOGNISE the importance of risk identification and allocation
• MASTER the key skills for successful negotiation of oil and gas contracts to guarantee a successful deal

PART I – Understanding and drafting different types of upstream oil and gas agreements

Introduction

• Overview of contractual and fiscal structures
• Confidentiality and non-disclosure agreements
• Exclusivity agreements

Specific issues when drafting joint ventures and licensing agreements for the oil and gas industry

• The nature of joint ventures and reasons why oil and gas companies and contractors participate in them
• Typical provisions of the agreements
• The relationship between operator and non-operator participants
• Documents creating the joint venture relationship
• Special features of licensing agreements
• Technology transfer

Joint operating agreements

• Relationship between the parties
• Scope
• Interest of the parties
• The role of the operator
• Rights and duties of the non-operator

Commercial terms in licensing and concession agreements

• Fiscal arrangements, licence fees
• Royalties, the R factor
• Taxation
• Bonuses
• Penalties

Drafting agreements for offshore design, engineering and construction work including EPC contracts (engineer procure construct)

• Basic features of an EPC contract
• Key oil and gas specific clauses
• Key performance clauses
• Liquidated damages
• Performance guarantees
• Key general clauses

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

Cross–border oil and gas pipelines

• Common problems
• Differences between oil and gas
• Economics
• The parties and their interests

PART II – General contract terms and risk allocation

Dealing with disputes in oil and gas contracts

• Choice of method
• Litigation
• Arbitration
• Mediation
• Expert determinations

Drafting contractual guarantees and warranties

• Advance payment guarantees
• Performance guarantees

Risk identification and allocation in oil and gas contracts

• Construction risk
• Permitting and license – political Force Majeure
• Change of laws
• Convertibility of currency and exchange rates
• Compensation and termination

General obligations of the contractor and the company

• Performance standards
• Data collection and reporting
• Audit rights and financial reporting
• HSSE requirements
• Sub-contractors

Oil and gas licence funding structures and documentation

• Shareholder financing
• Project finance and security
• Project bonds
• Islamic financing
• Role of funders
• Revenue streams and debt service
• Compensation on termination

Understanding contractual liabilities and indemnities

• 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

Specific problems encountered when working within different jurisdictions

• Applicable laws
• Host government petroleum regimes
• Host government contracts
• International practice
• Anti-corruption regulations
• Changes in law

Questions and discussion

Welcome Introductions

• What it means to be an effective negotiator in the oil and gas industry
• Skills of an advanced negotiator
• Planning tools
• Key levels of negotiations
• Options for objectives – Slicing the pie or expanding the pie
• Creating value
• Identifying your objectives and strategy
• Strategy variables – BATNA and ZOPA

PRACTICAL EXERCISE: Negotiation simulation 1
Participants will work in groups on a negotiation simulation based on an oil and gas case study to illustrate key challenges, tips and techniques of effective negotiation. This will illustrate the practical considerations and generate constructive feedback from our expert presenter.

Identifying your natural negotiating style

• Practical exercise
• Recognising your preference and others
• Impact of different styles
• When to apply different styles

Pre-negotiation tools for preparation

• Frames for a gain
• The Issue Map
• Offers

Negotiating behavioural skills and building trust

• Telling
• Probing
• Listening
• Identifying your criteria for trust and the other party’s

PRACTICAL EXERCISE: Negotiation simulation 2
Participants will return to work in groups on a negotiation simulation based on an oil and gas case study to illustrate key challenges, tips and techniques of effective negotiation. This will illustrate the practical issues and generate constructive feedback from our expert presenter.

Preparing Action Plans

Henry Cort is a Partner in the Dubai office of Trowers & Hamlins which he joined in 2006 from Hunton & Williams LLP. Henry specialises in corporate finance, project finance, project development, disposal, acquisition, secured finance and refinance work, with emphasis on international infrastructure and development projects. Henry is experienced in structuring, negotiating and documenting the full range of English and overseas law governing commercial and finance documentation underpinning international major development projects and their acquisition, sale, financing and refinancing.

Andrew Rae is resident Managing Partner in the Abu Dhabi office of Trowers & Hamlins. Andrew specialises in Middle East project development, corporate and project finance. He has extensive experience in large scale projects (ports, pipelines, petro-chemical and energy etc). Andrew’s experience includes project development and finance in the Middle East, privatisation and corporate structuring including extensive capital markets experience. Andrew has been based in the Middle East since 2000. Andrew is lead partner in the firm’s Abu Dhabi Finance and Projects Team which specialises in project development, privatisation and capital markets work.

Arun Singh OBE, FRS, is an international lawyer at Grundberg Mocatta Rakison LLP. He was formerly a partner and Head of International Commercial Law at KPMGLegal. His work for clients such as, Aramco, BP, Petromec, and Maersk includes working with international lawyers and managers on issues of substantive law and to build an effective cross-cultural business team and negotiation skills training. Arun is cited and ranked in Chambers Guide of the World’s Leading Lawyers. Arun has taught in the USA, France, Denmark, Thailand, Japan, the UK, Israel, Egypt, Sweden, Portugal , Russia, Malaysia and Japan. He is a Senor Associate of Oxford University’s Institute of Legal Practice.

Nigel Truscott is a Partner in the Dubai office of Trowers & Hamlins where he specialises in construction and arbitration and has worked on a range of significant (US$ million/billion) international projects since 1990 both in contentious and non-contentious capacities with particular focus on the Middle East and Gulf region. He has been based in Dubai for the past 14 years and is a regular contributor to key publications such as Gulf Business, Construction News, and in the Lloyds Insurance Market. He is a committee member of the UAE Branch of the Chartered Institute of Arbitrators, committee member of UAE branch of the Society of Construction Law, Co-chairman of the British Business Group Construction Special Interest Group.

Reviewing and Understanding International Shipping Contracts

Understanding, Negotiating and Drafting Oil and Gas Industry Contracts

Joint Ventures & Other Collaboration Agreements for the Oil & Gas Industry

• Al Suwaidi & Luqman (Yemen Legal)
• Arabian Industries LLC
• Companhia DO Pipeline Mozambique-Zimbabwe
• DANAGAS
• DEGREMONT SA
• Lamprell Energy Ltd
• Maersk Oil Kazakhstan GmbH
• Maritime Industrial Services Co Ltd Inc (MIS)
• Petróleos de Moçambique – PETROMOC, SA
• Vision Energy Services LLC