selected agreements

SELECTED AGREEMENTSChacrit Sitdhiwej

LAST WEEK

PETROLEUM VALUE 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

GOVERNMENTS, PETROLEUM COMPANIES AND LICENSING

concessions

product-sharing contracts

service contracts

4

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

CONTROL OF THE PETROLEUM INDUSTRY

concessions


service contracts

etc

6

CONTROL OF THE PETROLEUM INDUSTRY

concessions


service contracts

etchybridlaw contract

6

CONTRACTING ISSUES

joint operating agreements

unitisation

risk allocation contracts

law and technology

dispute resolution

7

RELATIONSHIP BETWEEN PRINCIPLE, POLICY & LAW

Adapted from Hunter & Chandler

8


principle


8


principle

policy


8


principle

policy

law


8


principle

policy

law

political institution


8


principle

policy

law


petroleum policies


8


principle

policy

law


petroleum policies

regulatorysystem


8

JOINT OPERATING AGREEMENTS

joint venture v co-venture

joint bidding agreements

joint operating agreements

the operator

the non-operators

decommissioning security agreements9

UNITISATION

preventing waste and maximising recovery

full unitisation

alternative to full unitisation

10

RISK ALLOCATION CONTRACTS

indemnification

indemnity and hold harmless clauses

consequential losses

limitations of liability

11

LAW AND TECHNOLOGY

patents

copyright

confidential information

ownership of intellectual property

collaborations

joint ownership

indemnities

IP licensing

12

DISPUTE RESOLUTION

unilateral actions

collaboration and negotiation

assisted collaborative non-binding processes

expert determination

arbitration and litigation

implementation and enforcement processes13

TODAYselected agreements

14

GAS SALE AND PURCHASE AGREEMENTS

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

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

PARTIES

collateral support

multiple sellers/buyers

term and effectiveness

conditions precedent

start date

last date

commissioning and performance testing

gas supply period

term extensions

SALE, PURCHASE AND DELIVERY

sale and purchase

delivery point

delivery pressure and control of gas flow

GAS RESERVES

reserve assurances

seller’s reservations

QUANTITIES

contract quantities

daily contract quantities

annual contract quantities

maximum daily contract quantity

excess gas

TAKE-OR-PAY, CARRY FORWARD AND MAKE-UP

take-or-pay

carry forward

make-up gas

SHORTFALL

remedies

exclusions from shortfall

outstanding shortfall gas entitlements on expiry or termination

QUALITY

buyer has prior notice of off-specification gas

off-specification gas taken unknowingly

PRICE

determination of the gas price and indexation

price review clauses

NOMINATIONS, UNDERTAKE AND OVERTAKE

nominations

limitations

variations

forecasts

undertake and overtake

MEASUREMENT AND TESTING

INVOICING AND PAYMENT

invoicing and statements

late payment or failure to make payment

payment disputes

FORCE MAJEURE

TERMINATION

FACILITIES AND MAINTENANCE

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

CRUDE OIL SALE AND PURCHASE AGREEMENTS

CRUDE OIL SALE AND PURCHASE AGREEMENTS

introduction

contract formation and structure

special provisions

general terms and conditions

incorporation of general provisions

new developments

INTRODUCTION

CONTRACT FORMATION AND STRUCTURE

description of the crude oil

quantity to be delivered

delivery period

price and payment

SPECIAL PROVISIONS

quality

quantity

price

payment

delivery

risk and title

GENERAL TERMS 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

INCORPORATION OF GENERAL PROVISIONS

NEW DEVELOPMENTS

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.

ANY QUESTION?

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selected agreements

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