Understanding A-Z of Oil & Gas Contract Law and Petroleum Business Transactions

Understanding A-Z of Oil & Gas Contract Law and Petroleum Business Transactions

OBJECTIVES

• A complete understanding of contract law fundamentals.
• The skills required to become an accomplished negotiator and drafter.
• An in-depth understanding of contracts, including international joint ventures pertaining to the Oil & Gas business.
• Simulation exercises and real life case studies that will enhance focused knowledge of the dynamic world of petroleum business.

WHO SHOULD ATTEND?

• Executives/Managers dealing with all types of Oil & Gas contracts
• Legal officers & advisers to Oil & Gas companies
• Finance Managers
• Procurement Managers, Officers, Executives
• Operations Director, Manager, Executives
• Engineers involved in: Planning, Development & Facilities Management

COURSE OUTLINE

General introduction

• Importance of contracts in the Oil & Gas business
• Long term, high investment and high risk contracts in upstream & downstream sector

Essential and key elements of a Contract

• Competence issues
• Offer and acceptance
• Consideration
• Lawful object
• Intention to create legal relationship
• Free consent
• Consensus ad idem
• Discussion and simulation exercises

Process of formation of contract

• Direct negotiation
• Tendering or bidding
• International competitive bidding
• Documents in the formative process
• A set of tender documents with draft contract will be provided
• Parts of a contract and drafting Tips

Introduction of parties

• Preamble
• Definitions
• Main body containing obligations and liabilities
• Boiler Plate
• Interactive discussion/exercise

Critical Contract Clauses and Related Issues

• Duration
• Participating interest
• Committees
• Work programme
• Assignment or farmouts
• Stability
• Force Majeure
• Termination
• Applicable law
• Settlement of disputes
• A draft contract will be provided and participants are to carry on mock negotiation

Common pitfalls and dangerous phrases and exclusions and how to avoid the trap

• Exclusion of liability
• Exclusion of one 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

Risk Management through legal devices

• Flexibility versus rigidity
• Stability of the benefits accruing to the contractor
• Grandfather clause
• Insurance
• Representations and warranties, guarantees
• Hardship clause, material adverse effect

Indemnity and Release clauses

• Indemnity
• Liability limited by wilful misconduct and gross negligence and other exclusions
• Limitation on Quantum of Liability
• Damages Liquidated and Un-Liquidated
• Interactive discussion and exercise

Understanding a contract document

• Language to be plain and simple
• Importance of heading and marginal notes
• Rules of construction
• Harmonious construction
• Rules of interpretation
• Interpretation simulation exercise

Contract law and negotiation

• Cross cultural issues
• Styles and techniques
• Good faith negotiations
• Documents during negotiation and their legal binding
• Confidentiality Agreement
• Term Sheet
• Memorandum of Understanding
• Letters of Intent
• Interactive discussion/negotiation exercise
• Applicable law and managing disputes

Applicable law

• Legal environment in which contract operates
• Constitution
• Domestic law
• Common law
• Civil law
• Islamic law
• International law
• Multilateral and bilateral treaties
• Energy Charter Treaty
• Proper Law of Contract
• Law of Arbitration
• Procedure of arbitration
• Curial law of the venue of arbitration
• Study of clauses found in petroleum contracts

Avoiding and managing disputes

• Origin of disputes
• Contractual issues
• Factual issues
• Change in circumstances
• Preference to negotiate rather than litigate
• Matters of principle
• Policy matters

Modes of Dispute Resolution

• Mediation
• Conciliation
• Arbitration
• Ad-hoc and institutional arbitration
• Venue of arbitration
• Enforcement of award
• Sovereign immunity and other problems of suing foreign governments
• Interactive discussion/ exercise
• Mock arbitration exercise

Enforcement proceedings

• Identifying assets
• Enforcement methods
• Treaties
• Local laws relating to enforcement
• Problems in multiparty disputes