INTRODUCTION

The oil and gas industry operates in a complex environment with significant contractual and financial implications. Understanding the intricacies of commercial contracts and negotiation dynamics is essential for professionals navigating this high-stakes field. The Oil & Gas Commercial Contracts and Negotiation Skills training course provides a comprehensive overview of the industry’s business, legal, and financial frameworks, equipping participants with the skills to analyze, negotiate, and manage contracts effectively.

This Oil and Gas Contract Management training course delves into the fundamentals of oil and gas exploration, production, and recovery economics to enhance participants’ understanding of critical contracting terms. The training course also explores various types of petroleum contracts, including production sharing agreements, concessions, and joint ventures, detailing the rights and obligations of stakeholders such as national oil companies, international oil companies, and host governments.

Participants will gain valuable insights into financial tools and fiscal strategies, learning how these elements influence profitability and drive investment decisions. Additionally, the course emphasizes negotiation techniques, conflict avoidance, and preparation strategies to conclude successful agreements in a competitive and geopolitically influenced sector.

TRAINING OBJECTIVES

By completing this Contract Negotiation training course for the Oil & Gas Industry, participants will:

Gain a broad perspective on the essential factors influencing the oil and gas business.

Enhance their understanding of oil and gas laws and commercial contracts.

Evaluate the technical, commercial, and financial aspects of contracts, assessing their impact on profitability.

Build confidence in discussing technical terms, concepts, and industry-specific jargon.

Master negotiation skills to lead and influence successful business agreements.

WHO SHOULD ATTEND?

This course is designed for professionals across various roles, including:

Business Development Managers exploring new opportunities.

Negotiators and Contracting Professionals.

Corporate Planning Professionals.

Legal, environmental, banking, insurance, finance, and tax advisors involved in oil and gas contracts.

Geologists, geophysicists, and petroleum engineers seeking insights into fiscal regimes.

Supply Planners and Scheduling Professionals.

Government Regulators.

Auditors and Compliance Officers.

Equity Analysts, Bankers, and Joint Venture Officers.

Introduction to Legal, Fiscal and Contractual Basics

Crude Oil & Gas

The Oil Industry Streams

Demand Drivers for Crude Oil

Drilling Contracts – Contract Alternatives

Legal Fiscal and Contractual Framework Ownership

Oil and Gas Rights and Ownership – The Ad Coelom Doctrine

The Rule of Capture

A rule of “No liability”

Limitations to Rule of Capture

Theories of Ownership – Escaped Hydrocarbons

Drainage by Enhanced-recovery Operations

Doctrine of Correlative Rights

Conservation Laws – Drilling Wells

Conservation Laws – Fair Share Doctrine

Function of Oil and Gas Conservation Laws

Well-Spacing Rules

Introduction to Contracts

Kinds of Oil and Gas Interests

Fee Interest

Mineral Interest

Leasehold Interest

Surface Interest

Royalty Interest

Production Payment

Carried Interest

Other Interests

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 (“decommission”)

What is a Petroleum Contract

Need for Collaboration between parties

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

Roles, Responsibilities and Fiscal Tools

Dissection of Petroleum Contracts

The document follows the events of project

Order and Disorder in the Clauses

Parties Roles and Responsibilities in Petroleum Contracts

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

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

The Financial Considerations in Petroleum Contracts – Fiscal Tools

Tools for Concessions, Production Sharing Contract and Participating Agreements

Signature Bonus

Production Bonus

Rental

Royalty – Fixed Royalty, Sliding Royalty, &  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

Strategies and Solutions

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 –  Due to Prices, Costs, 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

Gas and LNG Contracts

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 –  Due to Prices, Costs, 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

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

 Negotiations Skills

Art and Science of 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