Oil & Gas Commercial Contracts and Negotiation

Course Overview

This course develop the manager and senior professional by providing an understanding of the array of commercial contracts that are applied in the oil and gas industry and learning how these contracts relate to one another and how they are negotiate.

The participant will be able to :

·       Understand  the Contractual Framework in oil and gas

·       Describe the commercial contracts and the fundamental in petroleum contract

·       Understand the fiscal tool,  operational issues, and responsibility in the contract

·       Apply the  fiscal strategies and solutions

·       Improve the negotiations skills  towards successful contracts

Duration

 10 days

Who Should Attend

·       Business Development Managers

·       Negotiators and contracting professionals

·       Corporate planning professionals

·        Planners and scheduler professionals

·        Government regulators

·       Compliance officers

Course Outline

Day 1 – Introduction and Contractual Framework

·       The Oil and Gas Industry Streams

·       Demand Drivers for Crude Oil

·       Drilling Contracts 

·       Oil and Gas Rights and Ownership

·       The Rule of Capture

·       A rule of No liability

·       Limitations to Rule of Capture

·       Theories of Ownership

·       Drainage by Enhanced-Recovery Operations

·       Doctrine of Correlative Rights

·       Conservation Laws

o   Drilling Wells

o   Fair Share Doctrine

·       Function of Oil and Gas Conservation Laws

·       Well Spacing Rules

Day 2 - Kinds of Oil and Gas Interests

·       Fee Interest

·       Mineral Interest

·       Leasehold Interest

·       Surface Interest

·       Royalty Interest

·       Production Payment

·       Carried Interest

·       Other Interests

Day 3 - Key Stages of Petroleum Projects in View of Contracts

·       Explore to Find It in The First Place

·       Develop The Infrastructure to Remove Oil & Gas From Ground

·       Produce (And Sell) the Oil & Gas You Have Found

·       Abandon The Wells and Protect the Environment When It Runs Out and Clean Up

Day 4 - What is a Petroleum Contract

·       What is a Petroleum Contract?

·       Host Government Contract

·       Petroleum Fiscal Regime defined

·       Petroleum Contracts under Different Regimes

·       Awarding or Winning Contracts

·       Types of Petroleum Contracts and their Key Attributes

·       Upstream Project Agreement

·       Host Government Take

·       An example of Concessionary System’s Cash Flow

·       Optimal Government Take

·       PSC (Cash Flow Distribution)

·       PSC (CF Distribution Example: Year N+1)

·       Comparison of Fiscal Systems

·       Flexible Fiscal Regimes

·       Why Dynamic Terms are Used in Contracts

·       Joint Ventures and Other Combinations

Day 5 - Dissection of Petroleum Contracts and Parties Roles

·       The Document Follows the Events of Project

·       Order and Disorder in the Clauses

·       The General Framework of parties involved

·       National Oil Company Multiple roles

·       International Oil Company Role

·       Grants of Rights to a party (Contractor and Host Government)

·       Rights and Obligations of Host Government

Day 6 - Responsibilities in Petroleum Contracts

·       Addressing important operational issues in the contract

·       Contract Area or Block

·       Time periods in contracts

·       Minimum Work Obligations in Exploration Phase

·       Relinquishment of Unused Area to Government

·       Discovery, Appraisal, Declaration of Commerciality and Development

·       Post Commercial Discovery (A Field development Plan)

·       Annual Work Programs & Budgets (Petroleum Contracts)

·       Joint Management (Petroleum Contracts)

·       Deadlock (Petroleum Contracts)

Day 7 - The Financial Considerations in Petroleum Contracts (Fiscal Tools)

·       Tools for Concessions, Production Sharing Contract and Participating Agreements

·       Signature Bonus

·       Production Bonus

·       Rental

·       Royalty

o   Fixed Royalty

o   Sliding Royalty

o   Royalty Determination Point

·       Payment in Cash or In Kind

·       Corporate Income Tax and Ring Fencing

·       Profit Sharing

·       Production Sharing (Contract’s  & Government Share)

·       Fixed Profit Oil Shares

·       Sliding Scale Profit Sharing

·       Cost Oil

·       State Participation( A Fiscal Tool in PSC)

Day 8 - Fiscal Strategies and Solutions

·       Intro to Fiscal Strategies and Solutions in PSC

·       Strategies for State to meet their Profitability

·       The 4 Key Questions that Defines the Strategy

·       The Changing Profitability

o   Due to Prices

o   Costs

o   Production Rates

·       Understanding the Regressive, Neutral & Progressive Fiscal Tools

·       Approaches to Profitability

·       Profitability And The Fiscal Tools

·       Timing of Petroleum Revenues (Fiscal Tools)

·       Risk for The State (Fiscal Tools)

·       State Participation as a Co-Investor

·       Encouraging Investment and Re-Investment

·       The Shift to Unconventional Oil & Gas

Day 9 - Gas and LNG Contracts

·       The Distinct Characteristics

·       Liquefied Natural Gas Business

·       Liquefied Natural Gas Contracts

·       Gas Sales and Transportation Contracts

·       Gas Transportation Tariffs

·       Gas Sales Agreements (Terms & Quantity)

·       LNG Sales And Purchase Agreements

·       General Economics for Gas Exploration & Development

Day 10 - Negotiations Skills

·       What is Negotiation?

·       Understanding Relations Between Conflicts and Negotiations

·       Identify Key Roles and Responsibilities of Negotiating Team

·       Preparing for Negotiations

·       Implement an Effective Negotiations Process

·       Understanding Key Success Bargaining Factors

·       Concluding The Negotiations