Petroleum Contracts and Agreements Guide
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The document summarizes key concepts in petroleum law and agreements, including: - The upstream, midstream, and downstream stages of the petroleum value chain. - Common types of agreements between governments and petroleum companies like concessions, production sharing contracts, and service contracts. - Factors considered in petroleum investment decisions by host countries and companies. - Issues addressed in joint operating agreements, unitization agreements, and contracts allocating risks. - Relationships between principles, policies, laws, and regulations governing the petroleum industry. - Key terms and provisions in gas sale and purchase agreements and crude oil sale and purchase agreements.
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Petroleum Contracts and Agreements Guide
- 2. LAST WEEK
- 3. PETROLEUMVALUE CHAIN upstream midstream downstream • exploration • appraisal • development • production •abandonment transportation of raw commodity (usually pipeline or ship) • refining and processing • transport of refined/ processed products • retail sales of products Adapted from Hunter and Chandler’s Petroleum law in Australia 3
- 4. GOVERNMENTS, PETROLEUM COMPANIES AND LICENSING concessions product-sharing contracts service contracts 4
- 5. PETROLEUM INVESTMENT DECISION HOST COUNTRY the likelihood of finding petroleum the balance between risk and reward PETROLEUM COMPANY net present value (NPV) internal rate of return (IRR) payback Source: Hunter and Chandler’s Petroleum law in Australia 5
- 6. CONTROL OF THE PETROLEUM INDUSTRY concessions product-sharing contracts service contracts etc 6
- 7. CONTROL OF THE PETROLEUM INDUSTRY concessions product-sharing contracts service contracts etc hybridlaw contract 6
- 8. CONTRACTING ISSUES joint operating agreements unitisation risk allocation contracts law and technology dispute resolution 7
- 9. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW Adapted from Hunter & Chandler 8
- 10. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle Adapted from Hunter & Chandler 8
- 11. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle policy Adapted from Hunter & Chandler 8
- 12. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle policy law Adapted from Hunter & Chandler 8
- 13. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle policy law political institution Adapted from Hunter & Chandler 8
- 14. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle policy law political institution petroleum policies Adapted from Hunter & Chandler 8
- 15. RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW principle policy law political institution petroleum policies regulatory system Adapted from Hunter & Chandler 8
- 16. JOINT OPERATING AGREEMENTS joint venture v co-venture joint bidding agreements joint operating agreements the operator the non-operators decommissioning security agreements 9
- 17. UNITISATION preventing waste and maximising recovery full unitisation alternative to full unitisation 10
- 18. RISK ALLOCATION CONTRACTS indemnification indemnity and hold harmless clauses consequential losses limitations of liability 11
- 19. LAW ANDTECHNOLOGY patents copyright confidential information ownership of intellectual property collaborations joint ownership indemnities IP licensing 12
- 20. DISPUTE RESOLUTION unilateral actions collaboration and negotiation assisted collaborative non-binding processes expert determination arbitration and litigation implementation and enforcement processes 13
- 22. GAS SALE AND PURCHASE AGREEMENTS
- 23. GAS SALE AND PURCHASE AGREEMENTS gas sales agreement parties sale, purchase and delivery gas reserves seller’s reservations quantities contract quantities take-or-pay, carry forward and make-up shortfall quality price nominations, undertake and overtake measurement and testing invoicing and payment force majeure termination tax facilities and maintenance other provisions
- 24. GAS SALE AGREEMENT GSA types and characteristics measures of bringing gas to market responsibility for pipeline transportation depletion and term-supply contracts long-term, short-term and spot arrangements
- 25. PARTIES collateral support multiple sellers/buyers term and effectiveness conditions precedent start date last date commissioning and performance testing gas supply period term extensions
- 26. SALE, PURCHASE AND DELIVERY sale and purchase delivery point delivery pressure and control of gas flow
- 27. GAS RESERVES reserve assurances seller’s reservations
- 28. QUANTITIES contract quantities daily contract quantities annual contract quantities maximum daily contract quantity excess gas
- 29. TAKE-OR-PAY, CARRY FORWARD AND MAKE-UP take-or-pay carry forward make-up gas
- 30. SHORTFALL remedies exclusions from shortfall outstanding shortfall gas entitlements on expiry or termination
- 31. QUALITY buyer has prior notice of off-specification gas off-specification gas taken unknowingly
- 32. PRICE determination of the gas price and indexation price review clauses
- 33. NOMINATIONS, UNDERTAKE AND OVERTAKE nominations limitations variations forecasts undertake and overtake
- 35. INVOICING AND PAYMENT invoicing and statements late payment or failure to make payment payment disputes
- 36. FORCE MAJEURE
- 37. TERMINATION
- 38. TAX
- 40. OTHER PROVISIONS definitions and interpretation assignment and transfers liabilities insurance confidentiality governing law dispute resolution and arbitration expert determination representation and warranties sovereign immunity application of terms implied by domestic legislation or international conventions boilerplates
- 41. CRUDE OIL SALE AND PURCHASE AGREEMENTS
- 42. CRUDE OIL SALE AND PURCHASE AGREEMENTS introduction contract formation and structure special provisions general terms and conditions incorporation of general provisions new developments
- 43. INTRODUCTION
- 44. CONTRACT FORMATION AND STRUCTURE description of the crude oil quantity to be delivered delivery period price and payment
- 46. GENERALTERMS AND CONDITIONS taxes and duties payment effect of new and changed regulations force majeure limitation of liabilities termination or suspension in the event of liquidation and others limitation of assignments facilitation payments and anti- corruption law and jurisdiction
- 48. NEW DEVELOPMENTS
- 49. REFERENCES Peter Roberts, Petroleum contracts: English law and practice (Oxford, 2013). Geoffrey Picton-Turbervill (ed), Oil and gas: a practical handbook (Globe Law and Business, 2009), pp137-175.
- 50. ANY QUESTION? 43