Upstream Petroleum Contracts

Petroleum doesn't last forever. It is a non-­renewable resource. This fundamentally drives the business decisions of Governments and companies, a key part of which is that most petroleum contracts are structured to contemplate the entire life span of a project, it's beginning, middle, and end.

Upstream Petroleum contracts can vary widely in their details, however all must establish two key issues on how profits are divided between the government and participating companies.  

This GLOMACS Upstream Petroleum Contracts training course provides in-depth information on the types of upstream petroleum contracts and what their differences are and what are the main contractual terms participants need to know in order to fully understand all types of Upstream Petroleum Contracts. This Contracts Management training course will comprehensively cover Production Sharing Contracts, Exploration & Production Agreement (E&P) Exploration & Exploitation Contract, License Agreement, and participants will take away essentials elements of these contracts to be effectively used in their own companies.

This Upstream Petroleum Contracts training course is designed to be highly practical and includes hands-on interactive sessions that will help participants understand the practical issues involved and the pitfalls to avoid. A well-negotiated and drafted Upstream Petroleum Contract must stand the “test of time” and provide parties with stability as well as adaptability when circumstances change over the course of the years.

This Upstream Petroleum Contracts training course will highlight:

• The Fundamental Types of Upstream Petroleum Contracts
• The Advantages and Disadvantages of the Different Types of Upstream Petroleum Contracts and How it is suitable for Specific Types of Projects
• Concessions, Production Sharing & Risk Service Contract, Important Details and Suitability for any Oil and Gas Upstream Project
• The Role of JOA in Upstream Petroleum Contracting Conciliation, Mediation and Settlement of Disputes
• Understanding the Essentials Terms of Unitization and Farm-in, Farm-Out Agreements

Participants will have a working knowledge of Upstream Petroleum Contracts and how to apply this knowledge to administering Production Sharing Contracts. Further, participant will gain working knowledge of accounting and auditing procedures that will need to be implemented. 

At the end of this Upstream Petroleum Contracts training course, you will learn to:

• Gain a full understanding of the different types of the Upstream Petroleum Contracts
• Understand the main contractual terms and their differences between the various types of contracts from PSA, Service contracts and others
• Be aware of the approaches to negotiation of these contracts
• Incorporate the best terms into these Upstream Petroleum Contracts

Participants will gain greater understanding of the subject matter through presentations by an experienced international practitioner designed to both inform and broaden the perspectives of the participants. Case studies will be reviewed and discussed bearing in mind some of the realistic scenarios participants may encounter. Interactive discussions to encourage discussion of problems and possible solutions to it. Negotiation simulation exercise will help participants get a realistic feel for negotiating a PSA contract.

This GLOMACS Upstream Petroleum Contracts training course will benefit all levels of personnel involved in resolution of oil and gas disputes. It will enable a broad range of disciplines to appreciate and understand the complexities of conflict resolution in particular in the Oil and Gas industry, and how best to manage disputes in the oil and gas industry.

This GLOMACS Upstream Petroleum Contracts training course is appropriate to a wide range of professionals but will greatly benefit:

• Senior Contract Negotiators and Managers
• Legal Managers, Legal Counsel
• Commercial and Business Managers
• Contracts Administrators and Managers
• Commercial, Financial and Insurance Professionals
• Project and General Management Personnel

DAY 1

Introduction and Overview of Upstream Petroleum Contracts

• Brief Overview of the O&G Industry
• Oil and Gas Terminology
• The Legal Framework to Upstream Contracts
• Introduction to Contract Formation
• Key Oil and Gas Terminology
• Oil and Gas Industry Structure
• Relationship between Different Players in the Oil and Gas Industry
• Phases of the Oil and Gas Industry
• Oil and Gas Contract Fundamentals and Legal Principles
• Territorial Water, Continental Shelf and United Nations Convention on the Law of the Sea (UNCLOS)

DAY 2 

Contracting in The Upstream Sector: Ownership and Licensing

• Ownership and Exploitation of Reserves
  • The ABCs of Petroleum Contracts: License-Concession Agreements, Joint Ventures, and Production-sharing Agreements
  • Characteristics of Upstream Contracts
  • Commercial Realities of the Oil and Gas Business
  • Agreement with Resource Holders
  • Ownership of Oil and Gas
  • Risk Service Contracts (RSCs)
  • Grant of Rights by Resource Holder
• Host Country's Legal and Regulatory Framework and Fiscal Regime - Stabilization
  • Role of Host Government
  • Key Issues in International Oil and Gas Contracts
  • Negotiation Framework and Strategy - Objectives of Host Countries / NOCs and IOCs
• Host Government‘s Role in Upstream (Exploration & Production (E&P)) Agreements
  • Overview of Upstream Operations and E&P Agreements (types and trends by region)
  • Key Differences between Production Sharing Contracts (PSCs), Concessions, Service Contracts and JV Contracts
  • Role of Host Government in Upstream Contracts

DAY 3

Production Sharing Contracts (PSC) & Joint Operating Agreements (JOA)

• Commercial Terms in Licensing and Concession Agreements
  • Fiscal Arrangements, License Fees
  • Five Key Financial Aspects to a PSC:

(a) Royalty, The R factor
(b) Cost Oil
(c) Profit Oil
(d) Taxation
(e) Bonuses, Penalties

• • PSC – Cash Flow Distribution
  • PSC – CF Distribution Example – Year N+1
  • Comparison of Fiscal Systems

• Joint Operating Agreements (JOAs)
  • What is a Joint Operating Agreement (JOA)?
  • Nature, Aim and Functions of a Joint Venture
  • Government Approval
  • Key Areas of the JOA
  • Purpose and Scope: Participating Interests

DAY 4

Service Contracts, Farm-In and Farm-Out and Unitization - Risk Bearing and Non- Risk Bearing Service Contracts 

• Participation Agreements (Farm-in and Farm-out)
  • Agreements for Farm-ins and Farm-outs
  • Nature of the Farm-out
  • Subject Matter of the Farm-out
  • Interest Assigned and Reserved
  • Assignment of Interest

• Unitization and Unit Operating Agreements (UUOAs)
  • What is unitization?
  • Unitization in Practice
  • Government Approval
  • Transboundary Unitization

DAY 5 

Negotiating Production Sharing Contracts 

• Government Take
• Production Share and Cost Recovery
• Local Content
• Force Majeure
• Dispute Resolution
• Stabilization and Renegotiation Provisions

Negotiation Simulation Exercise

• Negotiation a PSA with a Government Entity
• Objective: The objective is to establish what can be achieved in the meeting, what preparation is needed for it and what strategy should be adopted and then to pursue this strategy
• Feedback Session

Negotiation of Oil and Gas Disputes

• Importance of Negotiation in Oil and Gas Business
• Disadvantages of Competitive or Positional Negotiation
• Principled Negotiation between the Parties to Achieve Best Results

In Association With

Oxford Management Centre

A GLOMACS - Oxford Management Centre collaboration aimed at providing the best training services and benefits to our valued clients.

PetroKnowledge

Our collaboration with Petroknowledge aims to provide the best training services and benefits for our valued clients

The Energy Training Centre

Our collaboration with Energy Training Centre aims to provide the best training services and benefits for our valued clients

© 2023. Material published by GLOMACS shown here is copyrighted.
All rights reserved. Any unauthorized copying, distribution, use, dissemination, downloading, storing (in any medium), transmission, reproduction or reliance in whole or any part of this course outline is prohibited and will constitute an infringement of copyright.

P.O. Box 74653, Dubai, United Arab Emirates
Tel : +971 - 04 - 425 0700, Fax : +971 (04) 425 0701, Email : info@glomacs.com