International Oil & Gas Contracts

Professionals of the oil and gas industries are more than ever required to know and understand the regulations and practices governing their industry. This requirement extends not just to lawyers, but also geologists seeking out new mining sites, engineers planning the drills, and those responsible for drawing up mining contracts, who all need to know the legal technicalities affecting their industry. However, knowledge of the black letter law is no longer enough; a practical understanding of operations is also a necessity. During this training, delegates will acquire the fundamentals of international oil and gas agreements, along with negotiation techniques and strategies that work in international and multicultural settings. Delegates will also learn how to effectively negotiate in concert with counsel and how to get the terms negotiated incorporated into an enforceable international oil and gas agreement. The hands-on practical exercises will give you an understanding of the art of negotiations. Delegates will understand the components of 'the deal', timing, strategies for gaining the upper hand in negotiations, games opponents play, good vs. bad negotiations and the pitfalls of positional bargaining. After attending this course, delegates will be better equipped to negotiate profitably with international companies and governments in order to enforceable agreements that contain terms and conditions most productive for their company. This training course is specifically designed for professionals involved internationally in the oil and gas industry, it offers a unique opportunity to rapidly increase your understanding of the legal issues involved in various international scenarios and to improve your techniques and skills in drafting a variety of international contracts. Who should attend? Commercial managers in the oil and gas sector looking to improve their contract negotiation skills and overall commercial performance Government departments, policy makers and regulators Legal practitioners in the oil and gas sector looking to increase their knowledge Legal practitioners in private practice looking to specialise in oil and gas law Insurance and risk managers looking to reduce the legal and contracts risks for their companies Academics looking to increase their knowledge of/specialise in the area of oil and gas law What will you learn about? Key players in the international oil and gas industry Negotiation techniques and the role of counsel Explanation and analysis of key provisions in international oil and gas contracts Principal standard form contracts used in the industry including the North Sea LOGIC/CRINE and the International Petroleum Negotiators (AIPN) standard form contracts International dispute resolution framework and institutions: challenges unique to the oil and gas industry Key legal contractual risk management issues In an optional one day course, 'Introduction to Key English Contract Law Principles'
Day 1 This day should be attended by delegates who have no recent formal education in contract law, and is a necessary prerequisite to the oil and gas specific materials to be covered over the following four days. This day will act as a refresher session to delegates with formal contract law education but is not necessary. The legal framework and contract law I The UK legal system including sources of law Mandatory elements of a legally enforceable contract English contract law: Contract formation English contract law: Terms and conditions Workshop: Contract terms and content Delegates will be presented with some problem solving exercises in which they will consider some issues surrounding the terms in some mock contractual situations. Contract law II English contract law: Interpretation of contract terms English contract law: Assessing available remedies for breach of contract - Rescission - Compensatory damages - Consequential and incidental damages - Liquidated damages - Specific performance - Injunctive relief Workshop: Interpretation of contract terms Delegates will consider some exercises in which the principles of interpretation of contracts will be used to find practical solutions to ambiguous contract terms, and will consider better ways in which the contract could have been framed. Day 2 International oil and gas industry and its key players Geological and technical background (self-reading) Terminologies and introduction to the oil industry Nature of ownership in oil and gas; the law of the sea and sovereignty over natural resources Developments of contractual and fiscal arrangements in the oil and gas sector Structure used in regulating the oil and gas industry Infrastructure development Boundary disputes Host country legislation Fundamentals of oil and gas contracts Characteristics of oil and gas contracts The contractual process Commercial realities of the oil and gas business Drafts and drafting Enforcement Fundamental legal principles Cultural and language issues Fundamental legal principles The essentials of negotiation Meaning of negotiation mean - Types of negotiation - Issues to be negotiated - The negotiation process Style, strategy, and tactics Persuasion- the role of argument Overview of negotiation Workshop: How to negotiate profitably Delegates will work in two teams and the workshop will be announced during training. Agreement with resource holders (I) Leases Service agreements Concessions/licensing Workshop: Operation - granting instruments Delegates will compare and contrast various granting instruments from around the world. Moreover, delegates will review and consider issues discussed with a case study from the UKCS Licensing Regime Agreements between co-ventures International model form confidentiality agreement (CA) AMI’s and bidding agreements Joint operating agreements (JOA) - Standard model form international operating agreement - Drafting issues Unit operating agreement/unitisation - What is it? - Why do it? Workshop: Joint operating agreements (JOA) Delegates will work through drafting/negotiating a case study with various key aspects of relevance to JOA. Day 3 Agreement with resource holders (II) Production sharing agreements (PSA) Key characteristics of production sharing agreements - Phases and bonus payments - Production sharing - Cost recovery - Profit shares - Taxation of contractor’s profit - Operations under a PSA - State participation - Training, infrastructure and local content - Domestic supply obligation - Gas terms - Stabilisation - Governing law and jurisdictions Determining the structure style of a PSC - Comparisons of model PSCs - Azerbaijan - Brazil - Bangladesh - China - Cyprus - India - Kurdistan - Russia - Tanzania - Timor-Leste Workshop: Model PSCS Delegates will work through some model PSCs provisions and will consider the situations in various PSCs countries. Role play exercise will be announced in venue. Agreements with suppliers and contractors Standardisation of contracts International service contracts LOGIC standard contracts - Review of the key LOGIC contractual provisions - Reducing risk through effective use of force majeure clauses - Understand the purpose and risks this clause is intended to mitigate - Avoiding common force majeure pitfalls - Protect yourself from abuse and misuse of this clause - Mechanics and drafting tips of exercising force majeure rights Workshop: LOGIC contracts Delegates will work through some common LOGIC contract provisions and will consider a case study in which some of these key clauses could be used. Day 4 Minimising loss through careful limitation of liability clauses Drafting enforceable liquidated damage clauses Handling consequential damage waivers Mitigation of damages clause Contractual limitations periods Practical exercise Transferring risk by contractual indemnity Negligence Strict liability Unseaworthiness Pre-existing conditions Arising out of Legal fees Invitees Punitive damages Contractual indemnity case study: Post macondo Managing risk through adequate insurance provisions Overview of coverage types Understanding typical insurance exclusions Assessing the quality of your insurance carrier Evaluating deductibles and coverage limits Insurance subordination issues Effective claims management Workshop: Insurance, liabilities and indemnities Delegates will consider key the limitations and effective application of insurance, indemnities, and consequential damages. They will compare and draft these provisions to internationally accepted industry standard. Day 5 Avoiding common contract pitfalls Exclusion of liability Exclusion of one’s own fault Use of words and phrases such as notwithstanding Without prejudice to, subject to, and such other terms and phrases encountered in contract documents Representations and warranties Guarantees Preventing costly litigation through effective use of alternative dispute resolution options Types of dispute resolution vehicles Assessing litigation vs. arbitration options Mediation considerations Considerations for selecting effective mediators and arbitrators Selecting arbitration and mediation rules of procedure Drafting effective dispute resolution clause Practical exercise: Mock arbitration exercise Workshop: The dispute resolution clause Delegates will consider some examples of dispute resolution clauses and will critically examine these with a view to considering some of the essential ingredients of such a clause, as ideally framed. Related issues Confidentiality and bidding issues International model form confidentiality agreement International model form international study and bid group agreement Contract reviewing Managing oil and gas contracts Oil and gas risk management Determining and assessing types of risk Prioritising risk - Geological or reservoir risk - Technological or facilities risk - Political and fiscal risk - Economic risk Developing risk minimisation strategies Workshop: Due diligence and risk management Delegates will consider an exercise involving due diligence and risk management implementation in negotiations a relevant contractual transaction. Course summary and close