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LEGAL SERIES 5 day interactive training course

WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS Learn the key principles of the laws and contracts that govern upstream oil and gas activities

Course Leaders:

J. Jay Park Q.C., Chair of the Global Resources Practice Group, MACLEOD DIXON LLP Dr William T. Onorato, Legal Adviser and Arbitrator, International Oil and Gas & former Legal Adviser Energy and Mining, THE WORLD BANK

BY ATTENDING THIS COURSE YOU WILL:

• Gain knowledge of petroleum law frameworks and how they can foster oil and gas activity • Review petroleum contract structures that host governments and oil companies use to grant petroleum rights and govern petroleum activities • Analyse key petroleum agreements relating to exploration, development and marketing of oil and gas • Participate in a unique simulation exercise that will put into practice the knowledge gained over the week

BAC ACCREDITED

www.cwcschool.com

Singapore

6 - 10 June 2011


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS

OVERVIEW

This course provides participants with a comprehensive overview of the oil and gas law issues involved in the global upstream petroleum business. Beginning with a general description of the constitutional and legal regimes that govern oil and gas, attendees will learn about the key principles of the laws and host government contracts that regulate oil and gas activities. This will include a section that describes the economic terms related to oil and gas fiscal systems. After developing an understanding of the terms under which private organisations can conduct oil and gas development, the course will review the agreements that are entered into by private organisations for the joint development, processing and marketing of oil and gas.

AshKaBash Simulation Exercise Throughout the 5 days you will take part in a simulation exercise, based on the rebuilding of a fictional country, AshKaBash, that has collapsed after years of civil war. You will be required to work as consultative groups in order to aid the creation of a new Constitution, a new Petroleum Law for this resource-rich country. You will also implement the Host Government Contracts and fiscal mechanisms.

WHO SHOULD ATTEND?

Professionals from the oil and gas industry, both from the private and public sector who need to broaden their knowledge of the legal systems governing the industry globally, including: • • • • • • • • • • •

Legal counsel & officers Legal advisers Lawyers/attorneys Country managers Contract managers Commercial managers Company/executive secretaries Business planners Legal managers Negotiators Business development managers

FORMAT

The course leaders will use a lecture format for this course, and interaction, questions and discussion will be encouraged. Whilst the intention is to provide an understanding of the legal systems that govern world oil and gas activities, specific examples from various countries will be used to demonstrate relevant provisions and issues.

“Very good course, intensive, and complete information.” Nathaly Albornoz, Legal Manager, PETROLEOS DE VENEZUELA S.A. PDVSA

World Legal Systems & Contracts

COURSE MATERIALS In order to maximise the value to your business and further enhance the skills developed on the course, the school will provide you with a ‘tool kit’ that you can take back to the office. • Presentation slides: Written and developed by your course leader • Recommended further reading list: Relevant agreements and documents • Programme materials relevant to the course

“I enjoyed hearing about the course leaders hands-on experiences. I particularly enjoyed the sample contracts.” Mimi Tahsin, Acting Legal Manager, TALISMAN MALAYSIA LTD


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS

COURSE LEADERS J. JAY PARK, Q.C. J. Jay Park is a Partner and Chair of the Global Resources Practice Group with Macleod Dixon LLP, where he has practiced oil and gas law since 1980. Based in Calgary, Jay leads a team of energy lawyers in Macleod Dixon’s international offices. Jay has represented oil and gas producers, consumers, marketers, pipeline companies and local distribution companies, governments, banks and investors. His practice has involved him in petroleum activities in over 45 countries. This has included drafting petroleum legislation and regulations, oil & gas asset acquisitions and divestments, advising on production sharing agreements, concession agreements, product marketing, gas sales and purchase contracts, pipeline transportation matters, oil and gas pipeline asset dispositions, oil and gas regulatory hearings, joint venture and participation agreements and title review. Jay has been recognised by Who’s Who Legal, the independent research partner of the International Bar Association, as the world’s leading oil and gas lawyer in 2006 and 2007. Jay is listed as a “Tier 1” practitioner for energy and natural resources law in the Chambers Global publication, The World’s Leading Lawyers, 2010 and is also listed in the LEXPERT/American Lawyer publication, Guide to the Top 500 Lawyers in Canada. Jay has also been named to the LEXPERT list of “Canada’s 100 Most Creative Lawyers”. Jay is actively involved in legal education and training; he instructs the “International Petroleum Transactions” course in the Faculty of Law at the University of Calgary, and co-instructs CWC’s courses, World Legal Systems & Contracts for Oil & Gas, Global Gas Transportation & Marketing, and Nigeria’s Oil & Gas Legal System. Jay is the past President of the Petroleum Joint Venture Association in Canada, and a current director of the Association of International Petroleum Negotiators.

DR WILLIAM T. ONORATO Dr William (Bill) T. Onorato, was a Legal Adviser, Energy and Mining, for The World Bank in Washington, DC, for over 16 years. During that time he was the bank’s principal legal counsel for its oil and gas, electric power and mining sector, lending and technical assistance programmes, worldwide. Prior to joining The World Bank, Dr Onorato had amassed extensive practical experience in the private sector in law and energy matters with Chevron Corporation, Getty Oil Company, Chrysler International SA and several major international law firms in their overseas offices. He currently conducts an active legal consulting practice as an International Energy Consultant and Arbitrator through his sole proprietorship company, WTO Consulting. In addition to his ongoing advisory work for private, governmental and inter-governmental clients on international oil and gas contracts, regulatory frameworks and legal regimes, he has also been a party-appointed arbitrator and an expert witness under ICC, UNCITRAL and ICSID Rules in several international energy related arbitrations. He was designated as an Arbitrator and an expert witness to the Cairo (Egypt) Regional Centre for International Commercial Arbitration. Dr Onorato was recently selected as consulting petroleum legal adviser to the World Bank Group’s Global Oil, Gas & Mining Division under the Extractive Industries Technical assistance Facility. Over the course of his career, he has, from time-to-time, held Adjunct Professorships in international law and business at Notre Dame Law School, The University of California, Berkeley and Georgetown University Law Center. He holds his BA from Cornell University, his JD cum laude from the University of Pennsylvania Law School and his Ph.D in International Law from the University of Cambridge, England.


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS

DAY ONE

DAY TWO

INTRODUCTION

HOST GOVERNMENT PETROLEUM REGIMES: PETROLEUM LAW & REGULATIONS

■■ Course Outline ■■ Description of Simulation: Designing a Petroleum Regime for the “Republic of AshKaBash”

APPLICABLE LAW

■■ Constitution ■■ Domestic Law • Common Law • Civil Law • Islamic Law ■■ International Reach of Domestic Law • Anti-Corruption ■■ International Law • Treaties and Related Agreements • Energy Charter Treaty ■■ Petroleum Development in Post-War Iraq: Public International Law Issues

OWNERSHIP OF MINERAL RIGHTS

■■ The Legal Nature of Oil and Gas Ownership ■■ Territorial Regimes • Territorial Sovereignty • Maritime Boundaries • Joint Development Zones ■■ Rights of Mineral Development within a State • Private vs. Sovereign Ownership • Federations • Unitisation across International Boundaries

“Both course leaders are masters when it comes to legal issues. Their presentation style is very pleasant and easy to understand.” Arthur Watt, Legal Attorney, ANP - AGÊNCIA NACIONAL DO PETRÓLEO, GÁS NATURAL E BIOCOMBUSTÍVEIS

■■ Essential Elements of a Petroleum Law • State Property in Petroleum • Competent Authority • Petroleum Operations • Petroleum Agreements • Regulations • Qualifications, Duties and Rights of Rights Holder or Contractor • Taxation of Profits • Other Taxes, Duties and Exchange Controls • Fiscal Stabilisation • Environmental Protection and Safety ■■ Regulations to a Petroleum Law • Competent Authority • Petroleum Licensing • Petroleum Operations • Petroleum Agreements • Fiscal and Financial Regime • Assignment of Rights • Land Use • Environmental Protection • Model Forms

FOSTERING INVESTMENT: THE ROLE OF THE LEGAL CLIMATE

■■ Role of the Legal and Contractual Climate ■■ Attributes of the Legal and Contract Regime that Foster Investment • Concerns of Investors −− Right to Monetise −− Stability −− Enforceable International Arbitration • Concerns of the State −− Fair Fiscal Share −− Prompt Exploration −− Environment −− Local Goods & Services −− Training −− Local Employment −− Activity Controls


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS ■■ Trends in Oil and Gas Regulation and Contracts ■■ The Importance of the Legal and Contract Regime in the Investment Decision

GRANTING INSTRUMENTS

■■ Types of Host Government Contracts and their Key Attributes • Concessions and Licences • Production Sharing Agreements • Joint Ventures • Service Contracts • Hybrid Systems ■■ Common Elements of Host Government Contracts • Scope, Duration and Grant of Rights • Minimum Work Obligation (MWO), Work Programme and Guarantees • Relinquishments • Declaration of Commercial Discovery • Joint Management Committee • Cost Recovery, Expenses and Production Shares • Taxes and Duties • Fees and Bonuses • Protection of the Environment • Supply of Domestic Market; Emergency Requisition • Training of Host Government Personnel • Other Standard Provisions

REVIEW OF SAMPLE HOST GOVERNMENT CONTRACTS • • • •

Brazil’s Concession Agreement Colombia’s Association Contract Indonesia’s Production Sharing Contract Iraq’s Service Contract

DAY THREE UPSTREAM PETROLEUM ECONOMICS: A PRIMER ■■ Fiscal Instruments ■■ Fiscal Tools for Concessions, Production Sharing and Joint Venture Situations • Signature Bonus • Production Bonuses • Rentals • Royalties • Corporate Income Tax • Production Sharing • Government Participation • Profit Sharing and Special Taxes ■■ Fiscal Tools for Services Contracts ■■ Fiscal Policy Issues • Resource Policy Issues −− Promotion of Exploration −− Maximum Efficient Development of Reserves −− Gas Development −− Cost Efficient Development of Resources • Economic Policy Issues −− Encouraging Investment and Re-investment −− Maximising Domestic Economic Development ■■ “Rating” of Different Petroleum Fiscal Regimes ■■ Petroleum Administration Issues

INTERNATIONAL PRACTICE

■■ The Value of Knowing International Practice ■■ International Practice Review ■■ Selected International Practice Review Issues

AWARD SYSTEMS

■■ Public International Bidding ■■ Restricted Invitation Bidding ■■ Direct Negotiation

World Legal Systems & Contracts


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS

DAY FOUR

DAY FIVE

THE “RESOURCE CURSE”: CAN THE LEGAL REGIME HELP?

ISSUES INVOLVED IN ACQUIRING & DIVESTING OIL & GAS PROPERTIES

■■ ■■ ■■ ■■ ■■

What is the “Resource Curse”? Sustainability Revenue Transparency Accountability International Efforts to Deal with Transparency and Accountability • Legislation • International Enforceability • Chad • Timor Leste

JOINT DEVELOPMENT & OPERATIONS ■■ ■■ ■■ ■■ ■■ ■■

Confidentiality Agreements Joint Bidding Farmout and Participation Agreement Area of Mutual Interest Agreement Unit Agreement Joint Venture Agreements and Joint Operating Agreement • Model Forms of Operating Agreements • Operator’s Duties and Liabilities • Cost Obligations • Sole Risk Provisions • Transfer Restrictions • Accounting Procedure

■■ Sale Process ■■ Describing the Assets • Confidential Information Memorandum • Data Room - Physical and Virtual • Divestment Bid Programme vs. Direct Negotiation • Process Protocol ■■ Due Diligence • Reservoir Engineering • Facilities • Title • Environmental ■■ Agreement of Purchase and Sale Asset Transaction ■■ Agreement of Purchase and Sale Share Transaction ■■ Joint Venture Issues • Operatorship • Consents to Transfer • Rights of First Refusal • Accounting Adjustments

DISPUTE RESOLUTION IN INTERNATIONAL PETROLEUM TRANSACTIONS

■■ Crude Oil Marketing Agreements ■■ Natural Gas Marketing ■■ Sample Gas Regulatory Regime Deregulation of Gas in Canada

■■ Dispute Resolution Mechanisms • Litigation • Arbitration • Mediation • Expert Determination • Considerations for Choice of Method ■■ Enforcement ■■ Sovereign Immunity and Other Problems of Suing Foreign Governments

“Excellent overview of all available contracts and possibilities.”

“Very good and experienced speakers. The interactive lectures were very good. Overall it was excellent.”

DRILLING CONTRACTS PRODUCT MARKETING

Jerome Jubineau, Legal Counsel, GDF SUEZ

Etsuro Yonemura, Senior Coordinator, JAPAN PETROLEUM EXPLORATION CO LTD


WORLD LEGAL SYSTEMS & CONTRACTS FOR OIL & GAS

www.cwcschool.com

In-Company Training Core Competencies & Management Legal, Fiscal & Contracts Finance & Economics Gas & Power

COURSE FORMAT The course format includes presentations on key aspects of the standards, small group exercises and longer workshop style case studies focusing on issues common to the oil and gas sector, group discussions and reviews of relevant financial statements.

CERTIFICATES/CPD POINTS Personalised certificates will be awarded to participants who successfully complete the programme. CWC School for Energy is a member of the CPD Certification Service.

BAC ACCREDITATION

Refining & Petrochemicals Technical

BAC ACCREDITED

For further information, please contact Patricia Borges Rotolo on tel:+44 20 7978 0044 or email: pborges@thecwcgroup.com

The British Accreditation Council (BAC) is recognised by the UK Border Agency (UKBA) and represents the clearest mark of educational quality.

“The course leaders have a vast knowledge of the different regimes and contracts. The different backgrounds and experience of the delegates also enriched the experience.” Daniela Marques, Legal Adviser of the Government, MINISTRY OF MINES & ENERGY OF BRAZIL

World Legal Systems & Contracts

“A comprehensive programme of different legal systems and contracts pertaining to oil & gas.” Senator Hosea Ehinlanwo, Senator, NATIONAL ASSEMBLY NIGERIA World Legal Systems & Contracts


World Legal Systems & Contracts for Oil & Gas