Oil & Gas Commercial Contracts and Negotiation Skills

Course Code: OGC 10620

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Course Sector:

Oil, Gas and Chemical

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Introduction

Training course introducion / brief

The business of oil & gas is contractually and technically complex, involving enormous capital along with some risks and uncertainties. It is often significantly influenced by geopolitical events.

In this training course you will study:

The basics of oil & gas exploration, production, and oil and gas recovery economics to fully understand the business and the essential contracting terms
The various types of petroleum contracts and their key attributes, along with the contracting parties’ roles and responsibilities
The rights and obligations of all parties concerned such as national oil companies, international oil companies, and the host government
The wide-ranging financial tools used in the oil and gas industry contracts are evaluated along with the financial strategies that impact each party’s profitability
How these profitability considerations provide incentives for investment and re-investment throughout various stages of oil & gas exploration and production
How understanding of negotiations skills, avoiding conflicts, and effectively preparing for negotiations, helps in concluding successful agreements

Training Course Methodology

The training course is designed to be interactive and participatory and includes various learning tools to enable the participants to operate effectively and efficiently in a multifunctional environment. The course will use lectures and presentations, exercises, experiential, and exposure to real-world problems and policy choices confronting delegates.

Gain a broad perspective of what are the essential factors in the oil and gas business
Enhance your understanding of the fundamentals of oil & gas law, and the commercial contracts
Evaluate the technical, commercial, and financial aspects of oil & gas contracts and their impact on the profitability
Confidently discuss the technical terms, concepts, and buzzwords with your peers and clients
Master negotiations skills, lead and influence business agreements towards successful contracts

Process design
Unit Operator
Environmental
Process safety engineer
Gasoline blender engineer
Lab supervisor
Supply chain engineer
Distillates analyst
Models engineer
Chemical Operator
Chemical Plant Operator
Chemical Process Technician
Control Room Supervisor
Gas Plant Process Operator
Gas Production Operator
Gas Terminal Operations and Storage
Gathering Pipeline engineer
Oil Terminal / Storage engineer
Pipeline Maintenance / Equipment / Compliance / Repair
Pipeline Testing / Technician / Supervisor / Safety
Plant Equipment Operator
Plant Operations Technician
Plant Shutdown
Plant Supervisor
Power Distribution
Power Plant Manager
Process Supervisor
Refinery Operations Technician / Manager
Terminal Operator / Manager
Utilities Operator

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
The doctrine of Correlative Rights
Conservation Laws – Drilling Wells
Conservation Laws – Fair Share Doctrine
The 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 the 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 a 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 the project
Order and Disorder in the Clauses

Parties' Roles and Responsibilities in Petroleum Contracts

The General Framework of the 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 Areas 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 Contracts 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

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

Assignments and Business Case Studies
Glossary and Abbreviations in Oil & Gas Downstream

Boost certificate of completion

BOOST's Professional Attendance Certificate “BPAC” is always given to the delegates after completing the training course, and depends on their attendance of the program at a rate of no less than 80%, besides their active participation and engagement during the program sessions.

ENDORSED EDUCATION PROVIDER

Flexible deadlines

Customized dates accordance to your schedule

Shareable Certificate

Earn certificate upon completion

COURSE METHODOLOGY

Our Training programs are implemented by combining the participants' academic knowledge and practical practice (30% theoretical / 70% practical activities).

At The end of the training program, Participants are involved in practical workshop to show their skills in applying what they were trained for. A detailed report is submitted to each participant and the training department in the organization on the results of the participant's performance and the return on training. Our programs focus on exercises, case studies, and individual and group presentations.

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TRAINING COURSE: Oil & Gas Commercial Contracts and Negotiation Skills