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18 - CMN - Contract Management and Negotiation Skills

CMN 151 - Upstream Petroleum Contracts

Code Start Date Duration Venue
CMN 151 09 October 2023 5 Days Istanbul Registration Form Link
CMN 151 04 December 2023 5 Days Istanbul Registration Form Link
Please contact us for fees


Course Description

 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 training Program 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 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. 


Course Objectives

  • Understanding the fundamental types of Upstream Petroleum Contracts
  • Gaining insights into the advantages and disadvantages of the different types of Upstream Petroleum Contracts and how it is suitable for specific types of projects
  • Learning about oncessions, production sharing & risk service contract, important details and suitability for any oil and gas upstream project
  • Describing 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

Who Should Attend?

  • Engineers
  • Managers
  • Senior executives and decision makers involved in strategic and operational functions
  • Anyone involved in an operational capacity with contractors and suppliers

Course Details/Schedule

Day 1

  • 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

  • The ABCs of Petroleum Contracts
  • License Concession Agreements, Joint Ventures, and (PSA Or PSC )
  • 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
  • Role of host government
  • Key Issues in international oil and gas contracts
  • Negotiation framework and strategy
  • objectives of host countries/NOCs and IOCs
  • 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

  • Different approaches and levels of complexity
  • New PSC’s in key jurisdictions
  • The role of calculation
  • Understanding the formulas
  • The non-fiscal legal and contractual terms
  • Contractual terms and conditions
  • Royalties and taxes
  • Fiscal arrangements, license fees
  • Four key financial aspects to a PSC
  • PSC – Cash Flow Distribution
  • PSC – CF Distribution Example – Year N+1
  • Comparison of Fiscal Systems

Day 4

  • Service Contracts
  • Risk Service Contracts
  • Different model forms – sources
  • Risk allocation and insurance
  • Master service contracts
  • 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

Day 5

  • What is unitization?
  • Unitization in practice
  • Government approval
  • Transboundary unitization
  • Government takes
  • Production share and cost recovery
  • Local content
  • Force majeure
  • Dispute resolution
  • Stabilization and renegotiation provisions
  • Negotiation of oil and gas disputes
  • Importance of negotiation in oil and gas business
  • Disadvantages of competitive or positional negotiation
  • Principles of negotiation between the parties to achieve best results