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Legal Innovation for Global Energy

AKIN GUMP

M&A Advisor Law Firm of the Year (2010) EuroWeek Emerging Markets Deal of the Year 2010 Legal Advisor on LUKOIL Eurobond The Wall Street Journal Europe Five Most Important M&A Deals of 2010 (for Bridas Energy) mergermarket 2010 Top Five Largest Announced European M&A Deals Thomson Reuters 2010 Top Ten Advisor on Emerging Markets M&A M&A Advisor Energy Law Firm of the Year (2009)
Oil & Gas Projects both conventional and unconventional M&A (public and private), Private Equity and Joint Ventures Equity and Debt Capital Markets Debt Financing Dispute Resolution Upstream, Midstream and Downstream (including energy services) English, New York and Texas law capabilities

More than 100 energy lawyers in the key energy centres around the world, including London Houston Moscow Abu Dhabi Beijing Geneva DOUG GLASS dglass@akingump.com +44 (0)20 7012 9605 GREG HAMMOND ghammond@akingump.com +44 (0)20 7012 9630

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Special Legal Focus

Guest Foreword
Written by Greg Hammond, Partner, Akin Gump Strauss Hauer & Feld and Chairman of The Oil Councils Legal Committee

It is hard to believe that The Oil Council has now already been in existence for over 18 months. In that time a long list of members and partners has evolved which some other longer-established energy industry organisations must surely be eyeing with awe and a certain amount of envy. Doubtless, there are a number of reasons which would explain this rapid progress but one of them certainly has to be the over-arching policy maintained by The Oil Council from the outset that its main focus should be on the oil and gas deals themselves, together with the companies and investors which put those deals together. It is, therefore, perhaps a sign of the maturity of The Oil Council that a group of us has recently been asked to (i) establish a Legal Committee; and (ii) inaugurate a Special Legal Edition of Drillers & Dealers to be published annually. The first edition of the latter is in front of you now. Before the non-lawyers amongst you hurriedly flip the pages in abject disappointment, you may wish to reflect first on some of the legal and regulatory issues facing the oil industry in the 21st century (which increasingly appear on the front page of your daily newspaper) and then consider the mission statement below which the Council has presented to us. Our brief is to avoid the trap of being overly legalistic or overly focused on documentation. Instead, we have been asked to provide thought-leadership and content on the key legal issues of the day, in a format which is directly relevant and accessible to all members. Over the next few weeks a full Legal Committee will be appointed which will regularly source from Oil Council members (across the widest range of industry skill-sets and geographical coverage achievable) the necessary expertise on the hottest legal topics. Given that The Oil Council is as much focused on capital raising and M&A as it is on farm-ins and unitisation, one should expect that (uniquely compared to other energy industry organisations) content will continue to be drawn from transactions executed both at shareholder-level as well as at asset-level. Key areas on which we will be looking to provide insight in the coming year include the following: 1. 2. Issues arising from the Deepwater Horizon/Macondo incident in the Gulf of Mexico and how they may have knock-on effects for deepwater drilling elsewhere in the world; The increasing interest in unconventional oil and gas especially in the next generation territories outside the US, where the different regulatory regimes and environmental circumstances are already giving rise to stark variations in approach; Legal trends in capital raising, whether in the area of equity (such as the increasing use of the SPAC as a listing vehicle, as exemplified recently by companies such as Vallares PLC) or in the area of debt (with the current resurgence in reserves-based lending and hybrid instruments such as convertible bonds); Those parts of the world which look set to be utterly transformed by the potential and also challenges presented by their oil and gas reserves (including Brazil, Iraq, parts of Africa and the Arctic) and how their legal systems will evolve to meet those challenges; Issues arising in the area of transportation and infrastructure, particularly in light of the projected growth in the demand for gas as a fuel-source; and Occasional changes in law and regulation relevant to natural resource companies listed (or applying for listing) on the leading global stock exchanges.

3.

4.

5. 6.

Over the coming months The Oil Council also plans to establish an Investors Committee and a Finance Committee, both of which are expected to work together with The Legal Committee. These Committees will seek to provide guidance to Oil Council members and the wider industry across their respective disciplines in spotting trends, breaking through jargon and increasing understanding by sharing the experience of others in real-time. For our part, the Legal Committee will have one mantra of its own which will be to present legal knowledge as a means of empowering its audience in the conduct of its daily commercial business - by offering up alternatives and adding value not as a piece of red tape which must be painfully endured before leading to an uncertain outcome.

Drillers and Dealers :::

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Welcome to Drillers and Dealers June 2011

Drillers & Dealers

Official Publication of The Oil Council 3rd Floor 86 Hatton Gardens London EC1V 8QQ, UK Editor Drake Lawhead Vice President, Content and Member Relations drake.lawhead@oilcouncil.com T: +44 (0) 20 7067 1873 Editor-at-Large and Media Enquires Iain Pitt COO iain.pitt@oilcouncil.com T: +27 (0) 21 700 3551 Publisher Ross Stewart Campbell CEO ross.campbell@oilcouncil.com T: +44 (0) 20 7067 1877 Partnership Enquires Vikash Magdani Executive Vice President, Corporate Development vikash.magdani@oilcouncil.com T: +44 (0) 20 7067 1872 Advertising Enquires Amir Shirkhan Vice President, Sales amir.shirkhan@oilcouncil.com T: +44 (0) 20 7067 1876 Laurent Lafont Vice President, Business Development laurent.lafont@oilcouncil.com T: +44 (0) 20 3287 3447 Ken Lovegrove Vice President, Business Development ken.lovegrove@oilcouncil.com T: +1 604 566 4949 North American Media Enquiries Jay Morakis Partner JMR Worldwide jmorakis@jmrworldwide.com T: +1 212 786 6037 To Be Added to Distribution List Email: info@oilcouncil.com More Information At www.oilcouncil.com

Contents
Guest Foreword
Greg Hammond, Partner, Akin Gump Strauss Hauer & Feld

4 7

Update on The Oil Councils Global Activities Special Focus on Legal Issues and Challenges Natural Gas Comes of Age
Paul Griffin, Partner, Allen & Overy and Global Oil & Gas Lawyer of the Year, 2010 (Whos Who Legal Awards)

What, From a Legal Perspective, Are The Two Main Legal Issues Challenging Your Clients Today?
Stuart Carter, Partner, Bond Pearce

11

Oil & Gas Agreements: Negotiations With The State

Dr Ken Mildwaters, Founder and Managing Partner, Mildwaters Consulting

12

ON THE SPOT WITH THE GCS What Are The Legal Issues That Are Keeping You Up At Night In 2011?
General Counsel Perspectives from Across the Globe

15

News Release: Launch of our Legal Committee THE LEGAL CORNER "What Legal Steps Must Companies Take To Reduce Operational Risk?"
Legal Perspectives from Across the Globe

18 20

OC Columnists Whats New Online? Meet The Member

Copyright, Commentary and IP Disclaimer: *** Any content within this publication cannot be reproduced without the express permission of The Oil Council and the respective contributing authors. Permission can be sought by contacting the authors directly or by contacting Iain Pitt at the above contact details. All comments within this magazine are the views of the authors themselves unless otherwise attributed to their company / organisation. They are not associated with, or reflective of, any official capacity, or any other person in their company / organisation unless so attributed ***

23 25

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We Know Energy
Apache Corporation in the $7

billion asset acquisition of a

portion of BPs oil and gas operations, acreage and infrastructure as well as a portion of BPs upstream natural gas business Kinder Morgan, Inc. in connection with its $2.9

billion initial

public offering, the largest IPO by a U.S. energy company in more than a decade Legend Natural Gas in connection with the $900

million

acquisition of substantially all of Range Resources Corporations Barnett Shale oil and gas interests

bgllp.com

Texas

New York

Washington, D.C.

Connecticut

Seattle

Dubai

London

Bracewell & Giuliani LLP

Special Announcement

Update on our Global Activities from LON to NYC to HOU

Last week, we returned from an unseasonably balmy Houston the last stop on our three-city whistle stop tour which saw us connecting with our Partners and Members at cocktail receptions we hosted (with our gracious Partners Akin Gump and Bracewell & Giuliani) in New York, London, and Houston. Over 200 people attended the event at Bracewells offices in Houston, which featured not just some great meetings and conversations amongst senior oil and gas executive, but a no-expense spared Martini bar to boot. Weve really enjoyed hosting these events, and will continue to do so in our annual calendar to meet as many of you as possible and do what we do best put you in touch with new friends and potential business partners. For now, our attention turns to our World Oilfield Services Assembly and Summer Ball on June 29-30 in our very own backyard of London. One new development we want to share with you: many of you will at some point have spoken with Vikash Magdani, our Executive Vice President of Business Development. Vikash is moving to New York to head up The Oil Councils activities in the Americas, opening an office near Bryant Park. We continue to strengthen our network in the Americas and this move allows us to keep in touch more closely with our Partners and Members in New York, Houston, Calgary, and elsewhere. We wish you a prosperous rest of 2011 and hope to see you at one of our Assemblies this year.

Drake Lawhead and The Oil Council Team

many thanks again to the Bracewell & Giuliani team for their fantastic hospitality. Attending companies on June 9th includedAdino Energy Corp, AIG Asset Management, Albrecht & Associates, Anadarko Petroleum, Anglo Suisse Offshore Partners, Ankor Energy, Apache Corp, Ascendant Securities, Asset Risk Management, ATP Oil & Gas, Bank of Texas, BP, BPZ Energy, BTM Advisors, Buccaneer Resources, Burleson LLP, Canaccord Genuity, CIMA Energy, Clarey/Napier International, Commonwealth Bank of Australia, Credit Agricole Corporate and Investment Bank, Credit Suisse, Davis Petroleum Corp, Deloitte, Dewey & LeBouef, Dynamic Offshore Resources, EnCap Investments, Energy International Group, EnerVest and Enhanced Oil Resources, ENI Petroleum, Ernst & Young, ESS Funds, Evolution Petroleum Corporation, First Reserve, Focus Exploration, Fractal Systems, Frost Bank, Gaffney, Cline & Associates, GasRock Capital, GE Financial Services, Goldman Sachs, Goodrich Petroleum Corporation, Graves & Co, Harvest Petroleum, Heidrick & Struggles, Houston American Energy Corp, IBERIABANK, IHS CERA, JMR International, JP Morgan, KBC Advanced Technologies, Kessey Capital Partners, Key Energy Services, Korn Ferry, Legado Resources, LINN Energy, Lloyds Banking Group, Louis Dreyfus Highbridge Energy, M1 Energy Capital and Macquarie Bank to name only a few You can contact the B&G team directly using the following information

Steve Tredennick Partner Houston Bracewell and Giuliani T: +1 713.221.1459 F: +1 713.222.3236 E: steve.tredennick@bgllp.com

Mark Evans Managing Partner, Firm Houston Bracewell and Giuliani T: +1 713.221.1300 F: +1 713.221.1212 E: mark.evans@bgllp.com

Gray Muzzy Partner Houston Bracewell and Giuliani T: +1 713.221.1571 F: +1 713.221.2109 E: gray.muzzy@bgllp.com

Bracewell & Giuliani LLP is an international law firm with 470 lawyers in Texas, New York, Washington, D.C., Connecticut, Seattle, Dubai, and London. We serve Fortune 500 companies, major financial institutions, leading private investment funds, governmental entities and individuals concentrated in the energy, technology and financial services sectors worldwide.

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Special Legal Focus

Natural Gas Comes of Age

Written by Paul Griffin, Partner, Allen & Overy and Global Oil & Gas Lawyer of the Year, 2010 (Whos Who Legal Awards)

For many years, natural gas has been the less important hydrocarbon in the oil and gas business, but recent times have seen a potential change. Many indications suggest that natural gas is gaining a higher profile in the commerce and politics of the oil and gas business. Some would even go so far as to say that we are entering the age of natural gas. The difficulties of containing and transporting natural gas meant for many years a limitation of markets to those closest to the points of production. But the development of ever-longer pipelines and, particularly, the growth of liquefied natural gas (LNG) have enabled natural gas to reach ever more distant markets. While pipeline distances are inevitably limited, this is not the case with LNG which, over the last decade, has seen its traditionally regional and separated markets move towards a more homogenous, single, global market. There has also been a growing separation of the previously connected markets for oil and natural gas with natural gas prices in the United States and Europe coming to reflect the value of natural gas in its own right. Perhaps more significantly, the growing development of unconventional gas (in the form of shale gas and coal seam gas and often close to major consumer markets) has also led to a concentration on natural gas in its own right. The natural gas reserves of the former Soviet Union and the Middle East have long constituted the worlds major reserves but remain comparatively distant from the traditional consumer markets of the United States, Europe, Japan and Korea and the developing markets of China and India. But this balance has been thrown into doubt by the recent and rapid development of the US shale gas business. Whilst a number of developments are at early stages, the current view is that these unconventional gas reserves are very considerable and have the potential to move the projected supply and demand balance in the US from one of recent shortage to one of future abundance; and for decades to come. Given the long lead-time for LNG developments particularly, a number of production facilities intended towards deliveries to the United States are now likely to have to find alternative markets for their production. Also, Australia is seeing a considerable enhancement of its LNG production capability with an increase of its LNG production from the traditional natural gas reserves of Western Australia as well as the development of new LNG production facilities in Queensland. This represents the commercialisation of coal seam gas reserves with intended sales towards, primarily, North Asian markets. These effects on supply and demand in the worlds LNG sector are combining to create a more global market in natural gas, as well as a connection in the prices of LNG among the previously segregated markets of the Americas, Europe and North Asia. Some recent transactions are also showing how gas is becoming the focus of strategic deals. One example is the entry by BP into a joint venture with Reliance Industries in relation to the gas market in India. This deal sees BPs participation in upstream producing interests in gas fields offshore India as well as a joint venture arrangement for the marketing of gas and LNG within India. The pace of recent development of the worlds LNG markets contrasts with the pace of development of major cross-border pipeline links. These arrangements are necessarily dependent on treaty arrangements among the relevant states, whether as producers or consumers of natural gas, or transit states in-between. The development of cross-border pipelines from Egypt to Israel and among the states of the former Soviet Union towards Europe provide examples of the long time necessary to put in place the required political arrangements as well as the commercial arrangements allied to the long-term sale and purchase of natural gas through those pipelines. The oil and gas business has long had a close interrelationship with politics and geo-politics and times of change have meant uncertainty for the oil and gas business over time. This has been the case over recent years with increasing state participation in its petroleum sector whether at the time investments are made or over time with moves towards resource nationalism in many jurisdictions. In some cases, these steps have taken the form of direct interference or, in case of a number of OECD states such as the UK, Australia and Israel, the changing of tax rates and fiscal terms. These steps may also lead to distortions in markets, with a notable example being seen in the Middle East where a combination of domestic subsidised energy prices and a prioritising of export resources are contributing to a need to import LNG into a region of plenty. Both oil and gas are traditional fuels for the purposes of power generation and it is natural gas which has been taking a leading role in this sector over recent years.

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Special Legal Focus

To some extent this may be a necessary response to an inability to commercialise or use associated natural gas otherwise, but it is also the case that natural gas is an environmentally cleaner fuel and with pressures in all jurisdictions towards the reduction of emissions and the management of carbon production, natural gas has been making a role for itself as a preferred fuel for power generation. This move towards increasing gas-fired power generation has been matched by a move towards more nuclear power generation, both in states with existing nuclear industries as well as new-comers. This progress may well now be re-assessed in the light of the accident at the Fukushima plant in Japan. Whilst it is early days in the assessment of the accident, the reduction in nuclear capacity in Japan has led to increased local supplies of LNG in the short term and a wider mood of questioning nuclear developments pending greater certainty over matters of safety and sustainability in the longer term. While there is no questioning of the place of nuclear generation in the worlds energy supply over time, it does seem that developments are likely to slow in the near term with natural gas being the most likely (and generally abundant) replacement fuel. Although the techniques and operations of the United States shale gas business and Australias coal seam gas business are much influenced by the local legal and political regimes in those jurisdictions, the developments which are taking place there are likely to have application more broadly. Already, other jurisdictions, particularly those in Europe, are looking to move towards shale gas production and similar moves are seen to hold great promise for the states of China and India, both of which have traditionally been import-dependent. There are legal and regulatory as well as operational and technical challenges in these on-shore developments, but these seem less onerous than those in off-shore environments where the challenges of deep-water exploration and production are growing. The recent accidents at the Macondo field in the GOM and the Montara field offshore W. Australia have led to a re-evaluation by many states of the terms on which drilling (and particularly deep water drilling) should take place. More broadly, there are also consequences for the granting of drilling permits, HSE requirements, operational practices and the availability and terms of insurance cover. These rapid and profound changes in the markets (and the supply and demand balance) of global natural gas are presenting new challenges for international oil companies, national oil companies, governments and consumers around the world. They are also presenting considerable opportunities for the innovative and inventive raising of capital and finance on a rare scale over the coming years.

About Paul Griffin: Paul is based in London where he focuses on domestic and international M&A transactions and large scale commercial agreements for energy clients. Paul has also been involved in disputes and matters of public law in relation to the oil and gas sector. Paul was named Global Oil and Gas Lawyer of the Year 2010 (Who's Who legal awards). He was also awarded the Worlds leading Energy Lawyer 2010 (Expert Guides: Best of the Best 2010).

About Allen & Overy: Allen & Overy's global Energy & Natural Resources team is at the forefront of this sector, providing clients advice on matters relating to power and utilities (including thermal and IWPPs, nuclear and renewables), transmission and distribution, carbon capture and storage, oil & gas (up, mid and downstream and LNG), mining & metals and climate change. Our clients are diverse, and include sovereign governments, corporates (utilities and sponsors, miners, oil & gas IOCs and NOCs, and independents), and financial institutions (banks, funds, ECAs/MLAs), suppliers and manufacturers. Their needs are also diverse, and we take immense pride in being able to deliver outstanding advice on transactions relating to M&A, project development, litigation, energy & emissions trading and funding (debt and equity). All of these transaction are supported by our market leading experts in areas such as taxation, antitrust, regulatory, environmental and employment, to name but a few.

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Oil & Gas Company Executives Register Today for only 1,795! Special Industry Delegation Discounts Also Available!
Featuring some of the industrys most influential minds, including:
Abdul-Jaleel Al-Khalifa CEO, Dragon Oil

Oil Council
WORLD ENERGY CAPITAL ASSEMBLY

Welcoming A New World Order: Defining the Roadmap for Future O&G Finance and Investment

Alan Stein Co-Founder and Managing Director, Ophir Energy

Bill Transier Chairman, President and CEO, Endeavour International

Keith Roberts CFO, Petrofac

16 17 November 2011, London, United Kingdom

The defining event for the global oil and gas, finance and investment communities
CEOs and CFOs talk on the leadership challenges they now face in ensuring new growth within over-regulated, increasingly competitive and volatile markets Renowned market commentators discuss the dynamics of todays macroeconomic landscape Energy banking legends explore the Dodd Frank Act, the future of commercial lending, the availability of finance and new sources of energy capital A plethora of financial advisors, institutional investors and PE investors explore global M&A/A&D activity, deal flow and transaction metrics, capital raising trends, capex deployment and new investment strategies Plus special focuses on exploration strategies; the future of the North Sea and NCS; emerging business opportunities in Africa; corporate governance best practice for E&P companies; the dynamics of todays global gas markets; and the growing influence of Asian NOC investment strategies

Ian Springett CFO, Tullow Oil

Lord John Browne Managing Director Riverstone Holdings

Mike Watts Deputy CEO, Cairn Energy

Patrice de Vivis Senior Vice President, Northern Europe, Total Exploration & Production

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Special Legal Focus

What, From a Legal Perspective, Are The Two Main Legal Issues Challenging Your Clients Today?
Stuart Carter, a Partner in Bond Pearces Oil & Gas team, talks Macondo and the Anti-Bribery Act.

The Post Macondo World

My job is to manage legal risk on behalf of our clients and to that extent my role is no different from any other commercial lawyer. However, in the oil and gas sector the stakes are often much higher than almost any other industry. Within this commercial environment, risk management has been brought into sharp focus by the fall out surrounding the Macondo well blow out and the coming into force of the new UK Bribery Act. If you were to ask lawyers to identify the principal challenges facing the offshore industry at the beginning of 2008 I would suggest that the overwhelming response would have been decommissioning and financial security following the 'wobbles' after the banking collapse. Whilst that continues to constrain deal activity we are now facing different challenges affecting operational activity. For the followers of Macondo the devil, as always, lies in the detailed definitions of 'gross negligence' and 'wilful misconduct', and the commercial terms that seek to allocate risk for pollution liability. Now more than ever before lawyers are pouring over the minutia to see where their clients are exposed and what can be done to minimise risk. The stakes are high with corresponding pressure put upon lawyers to 'guarantee' that client risk is kept to a minimum. Many would argue that it was ever thus and so nothing appreciably has changed post-Macondo. I would disagree. The world has changed post Macondo, just as it changed post Piper Alpha in 1988. We now live at a time where parties look for ever more water tight wording to limit any exposure, no matter how remote. There is increasing concern in relation to third party claims that now seem to resemble telephone numbers and the spiralling cost of insurance premiums and larger deductibles. On top of this, the increased stirrings from the Regulator also need to be factored in. They all come together as a powerful concoction and the client can rightfully expect their lawyers to be at the ready with their pencils razor sharp.

The UK Bribery Act

But just like London buses, challenges to the settled commercial environment seldom arrive on their own. After more than a year since it passed through Parliament - and after concluding a consultative process surrounding guidance, interpretation and implementation - the Act will finally come into force on 1st July. All through this period we lawyers have been advising our clients and the business community at large on the potential impact this new law will have upon the way business is conducted. Two areas have attracted particular attention. The first relates to the rules that govern the giving and receiving of corporate hospitality, gifts and entertainment. The second relates to installing and implementing procedures within organisations to prevent acts of bribery committed by staff. Some focus and discussion has also surrounded 'facilitation payments'. Whilst clearly an important issue, such payments are illegal under existing laws and so the current debate in my view is a bit of a red herring, though we do have to point out the differences with the FCPA which allows such payments to be made. The giving and receiving of corporate hospitality, gifts and entertainment has always been a feature of business life. The new Bribery Act has not outlawed this practice but it does require a party to stop and reflect upon their intentions and motives before anything of value is given or received. In particular, is the intention to cement good business relations or is the dominant purpose to influence the award or retention of business? It is in this context that clients often turn to us for guidance. As with any new statute upon the books, until a 'track record' has been established, including a few prosecutions, it is natural for most lawyers to be cautious when offering advice on interpretation and application. But the overly cautious approach might not necessarily be in their clients best interest. Competitors that have lawyers which are willing to provide more finely weighted advice could steal a march on how they develop 'good business relations' with existing or potential customers. Getting the balance right so as to ensure that the client falls on the right side of the line is something that lawyers are currently struggling with. It is not always black and white as the client's motives can be mixed and sorting out the good from the bad can be an exacting exercise for lawyers when seeking to advise clients what they can or should not do. An area I find less of a minefield but no less important to clients is the role lawyers now have working alongside clients in devising corporate procedures, the purpose of which is to prevent staff from committing a corrupt act in pursuit of company business. It is widely known that under the new Bribery Act a company can face criminal prosecution if a member of its staff is found guilty of giving or offering a bribe. A company's only defence against this charge is to convince the court that notwithstanding the breach, it does have in place 'adequate procedures' to prevent this type of activity. It currently remains a challenge to opine with absolute certainty as to what constitutes adequate for the purposes of the UK Bribery Act. In all probability it will be several years before guidance based upon any real experience can be developed. Until that time lawyers will continue to perform their risk based assessments without any fixed point of reference casting the net wide in the process. The fallout from the Macondo well incident and the application of the new UK Bribery Act do present very real challenges to how our clients pursue, or may have wished to pursue business opportunities not only on the UKCS but also internationally. So when L.P Hartley wrote in the opening paragraph of his novel The Go-Between, "The past is a foreign country: they do things differently there." so it is with the oil and gas industry post-Macondo, post enactment of the Bribery Act. Things will be done differently from now on making the past a truly foreign land. Stuart Carter is a partner in Bond Pearces oil and gas team with over 20 years petroleum industry experience. He has broad UKCS and international exposure in the midstream and upstream spheres of the business with extensive experience of joint venture agreements, M&A activity work including farm outs/ins; development agreements and government contracts such as PSAs and Licence arrangements. He is also experienced in LNG project work and pipeline transportation.

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Special Legal Focus

Oil & Gas Agreements: Negotiations with The State

Written by Dr Ken Mildwaters, Founder and Managing Partner, Mildwaters Consulting

As a firm we spend a lot of our time assisting clients with preparing for and engaging in negotiations in respect of a wide variety of oil and gas agreements: from the simple to the complex. This is far beyond what most lawyers engage in when they negotiate an agreement on behalf of a client. We do that as well. We also assist our clients through the negotiation that accompanies the implementation of the agreement. In the main we counsel our clients along the lines of the mutual gains or integrative bargaining approach to negotiation: BATNAs (Best Alternative to a Negotiated Agreement), focus on interests, creating options, and the like. We also stress the importance of preparation: and this is where we do a lot of our work with clients. What we find is that whilst the theory of what we advise is fairly widely known and understood, the implementation is generally less well executed. One area that is of particular difficulty is applying this approach to negotiations with the State. In this context, by the State we mean the Minister, the head of department responsible of natural resources (in this case, oil and gas), officials and other agents of the department, and the like. The need to negotiate with the State arises many times during the lifecycle of a field: when seeking authorisation to explore, when granted an authorisation and determining the terms and conditions of that authorisation, when undertaking the exploration, appraisal, development, production and decommissioning operations. There appears to be no end to the number of governmental consents required and in the vast majority of cases the granting of the consents, with or without conditions, is vested in the State; and almost invariably the decision of whether to grant the consents is at the sole, unfettered discretion of the State. A client with long and geographically diverse experience on the exploration side of the oil industry recently stated that as much as 98% of petroleum operations require some form of governmental consent and the granting of such is left to the discretion of the State the rest being prescribed by legislation, be it primary or secondary, where the consent is forthcoming if certain conditions have been satisfied. Take a few minutes to think about it.

The opportunity to negotiate

Where the State has such discretion there is also the opportunity to negotiate. These negotiations can be on such matters as whether the discretion should be exercised so as to grant the necessary consent and, if so, whether the grant should or should not be subject to conditions, and, if subject to conditions, what those conditions should be and what the sanction should be for breach of the conditions. We understand this, our clients understand this, and more importantly so does the State.

Preparation for negotiations

How do you prepare for such negotiations? Firstly, you should identify your BATNA. Your BATNA establishes that point at which you should not reach agreement with your counterparty because the benefits of the agreement under negotiation do not exceed the benefits that your alternative offers. As a general rule, identifying your BATNA is not too difficult. In many cases, given how far you are into the lifecycle how much time, money and other resources you have invested to date (all of which contributes to entrapment and we can question to what degree they should be taken into consideration) your BATNA may not be all that attractive. Secondly, you should identify your interests and once identified you should not enter into an agreement that does not meet them. Again, as a general rule, identifying your interests is not too difficult.

An example of a problem
Then we get to the actual negotiation itself and all too often a problem arises. Let's look at a couple of examples. These examples are not unusual and nor is there any suggestion that the States representative sought or received any sort of personal gain. The first example arose when our client had made what it believed to be a commercial discovery. It was keen to develop the discovery but to do so it required a number of governmental consents. It estimated that it was in the State's interest to have production and, as such, we (our firm and our client) prepared for the negotiation on the basis of meeting the estimate of the States interest. When we got to the negotiation table we quickly found out that the States interest was for more exploration. It already had production but what it really wanted was more exploration: particularly in those areas perceived as having low prospectivity. The State was looking for an agreement in which our client would carry out exploration activities in those areas in return for the necessary governmental consents which would contain certain favourable conditions. There was nothing in the legislation that permitted this linkage. This link was being introduced by the State because of our client's need for consents to proceed. In the end, in order to secure the necessary governmental consents, our client agreed to fund a seismic survey over an area not included in its authorisation, subject to certain rights if the results proved interesting. We recently had a similar experience in circumstances where no negotiation was anticipated.

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Special Legal Focus

Our client was the operator and there had been a small spill during the course of operations. The spill was reported to the relevant department and shortly thereafter the Minister responsible for the department levied a fine on our client. Nothing in the legislation gave the Minister power to levy a fine of any sort. As far as we and our client were concerned, this was a legal matter: do not pay the fine, point out the error and the demand for payment of the fine would be withdrawn. A typical legal response. Not so quick. Our client had also applied for consent to carry out further petroleum operations in relation to the same exploration authorisation. The granting of the consent was at the discretion of the Minister. The consent was not forthcoming. It was not granted nor was it refused, nothing appeared to be happening. Time was short and if the consent was not granted soon the weather window for carrying out the operations would pass. Our client approached the Minister and asked when he would make a decision on the application for consent. "What application?" asked the Minister. He had not seen an application. Our client accepted this at face value and had another copy of the application delivered to the Minister. Shortly after our client once again approached the Minister. Same question. Same response. And again a third time. What was going on? We suggested an informal meeting with the Minister and our client. Shall we call it a chat and a drink after work. He still had not seen the application and it became clear that he would not see it until our client had withdrawn its objection to the fine and paid the fine. Given the closing weather window and the commitments our client had already made a classic case of entrapment it withdraw the letter of objection and paid the fine to the State treasury. The next day the application was granted without conditions. The Minister had subtly linked the payment of the fine with the granting of consent, albeit in the case of the first he was acting beyond his power whilst in the case of the second he was acting within his power.

Why agree to a request by the State when the State has no legislative right to make the request?
In each case our client could have refused to agree to what the State had requested and, ultimately, if governmental consent was not forthcoming it could have elevated the matter to arbitration or litigation or invoked third party (home government) pressure. But it didnt. Why? In each case we looked at our clients interests. Where they being met? In each case we looked at our clients BATNA. Was agreeing to this agreement better than our best alternative to a negotiated agreement with the State? In each case the answer to each question was yes. The one area of concern was the added cost involved. Did it meet our clients interest to incur it? In each case, given entrapment by how much time, money and other resources had been invested to date and, in the latter case, the closing weather window, our client was of the opinion that it was in its interest to incur the added cost. By incurring the cost it ended up with an agreement that was better than its BATNA and met its interests. As one of the clients pointed out the alternative, given the governmental consents that would be required in the future, would have constituted an exit strategy.

The problem continues

In each case the agreement met our clients interest and was better than its BATNA until the next time it required governmental consent by then the entrapment was greater and the outcome was the same. Now the problem is, how do you stop the downhill slide? The precedent has been set. Again, that is where our firm comes in. Can we help our client to improve its BATNA and to find something that enables it to demonstrate to the State that such behaviour is not in the States interest, that the State's BATNA is not as good as it thinks it is, or that our clients BATNA is better than the State thinks it is but that is another story.

About Ken: Prior to establishing Mildwaters Consulting, Ken was a partner in leading law firms in the UK, Europe and Australia, GC at Guinness and Diageo and a partner in investment bank Babcock and Brown. In addition to operating a busy practice, he travels widely, running global workshops for governments, major companies and industry groups, and presenting papers on numerous aspects of natural resources law and business, in which he is an acknowledged international expert.

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CALGARY OFFICE
We are enhancing our service to Canadian and international clients that are investing or conducting business in Alberta or in the energy sector overseas. Calgarys presence, together with our existing Toronto and New York platforms strengthens our ability to lead international transactions.

TORYS

Toronto New York Calgary www.torys.com

Special Legal Focus

On the Spot with the GCs

What are the legal issues that are keeping you up at night in 2011?
Centrica is a FTSE 25 integrated energy company. My part of the business, Centrica Energy, has a broad portfolio of business covering upstream oil and gas, conventional, renewable and nuclear power generation along with a commodity trading business. Each or our businesses is facing legal, regulatory and political challenges. Billions in power generation investment depend on the UK governments Electricity Market Reform proposals. Our trading business will have to respond to wholesale reviews of EU and UK financial services regulation. But the UK governments surprise tax increase on gas production creates particular challenges for Centrica Energy. The governments recent change to supplementary corporation tax (SCT) is the UKs third tax hike on the upstream in last nine years. It increased the marginal tax rate on mature production in the UK sector to 81 per cent one of the highest levels of the tax in the developed world. Not only does the SCT change hit our bottom line, it also undermines Centricas UK upstream strategy by making investment in one of our favoured areas materially less attractive. From the policy perspective, the governments move is at odds with its objective of maximising North Sea production, investment and jobs. Is there any doubt that increased rates of tax will lead to reduced investment in the declining UK sector? Economics aside, producers and explorers will have to consider political risk. They will shift capital to countries with more stable tax regimes. Over time the SCT change also spells bad news for gas consumers. Decreasing production in the UK means increased dependence on more expensive imported gas and higher bills. If gas gets more expensive, more UK gas-fired electricity generation will be bumped out of the merit order by cheaper coal-fired power stations, undermining the UKs work to cut carbon emissions. Centrica wants to be the leading consolidator and operator of mature and orphaned assets in the UK. Over the last 3 years, Centrica has invested 3 billion in UK upstream growth. We believed we would play a major part in ensuring that the North Seas significant remaining potential would be realised. We will have to take a hard look at that vision.

David Isenegger, General Counsel, Centrica

I have recently taken up the reins as general counsel of Valiant Petroleum, formed in 2004 as a full-cycle exploration and production company, and spent the first quarter re-immersing myself in the most recent developments in English law (after five years in Asia) and focussing on the needs of a rapidly growing organisation from a legal perspective. The company is listed on the AIM market and seeks to deliver stakeholder value through commercialization of smaller development opportunities, near-field exploration and appraisal, overlooked exploration plays in mature areas and new exploration frontier areas with an initial focus on the UK continental shelf. Its recently refinanced debt provides financial flexibility to continue to take advantage of opportunities in the North Sea and elsewhere. Thus it is in a rapid phase of growth, which presents challenges on several fronts. It is often said that a small company counsel faces a number of very different issues than those confronting lawyers in the larger organisations in the sector.

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Special Legal Focus

Balancing some of these, such as orderly corporate governance and proper planning and risk assessment, in areas such as company secretarial and insurance, to ensure they receive the proper time and attention whilst experiencing tremendous pressure to undertake all the legal work (which has to be resisted), has been a learning experience. As a commercially trained lawyer, I enjoy filling the gaps in understanding, communication and general project direction amongst a highly technically focussed group of colleagues with a scarcity of commercial resources. A major objective for this year is to ensure most efficient use of legal resources to meet budgets to ensure legal services can keep pace with demand and takes a serious amount of investment of time to fit the right fit. Thankfully external legal services within the crowded sector are plentiful and these days more sensibly priced. Coming out of a multinational corporation, I have had to rapidly adjust to at once recognise the remit of peoples roles and temper the urge to be involved in every area to which I feel I can contribute - defining where the legal role should begin and end in a fluid space is not as easy as perhaps imagined. Ultimately, an ability to see the big picture and stay flexible enough to suit corporate objectives and some whims of management, whilst resisting the urge to spend entire weeks in meetings, definitely pays dividends! In terms of current changes in law and practice, the new supplementary tax in the UK, anti-bribery act and the decommissioning security debate are all being extensively chewed over, with the most topical and potentially most far reaching being the post Macondo assessment. Regardless of the outcome, it is clear that liability is high on the agenda with regard to relationships between oil and gas companies in the future and it is too early to understand the complete nature of this change. The heavy emphasis being placed on indemnity clauses within contract negotiations I have encountered recently with service companies suggests the relationship between services companies and operators is likely to be more complicated in the future. Anticipating changes in regulations and what this will mean for all parties in making contracts, including the future for insurance and the risks therein, is work which is on-going within industry bodies, but which sadly time does not permit me to participate in as fully as I would like. Several recent developments which have managements full attention and which have presented some unexpected challenges include: The companys recent decision to acquire a Norwegian E&P company. Inevitably, this will involve adapting to ever greater demands on precious resources, developing in house local law expertise and external legal relationships, facilitating a process of integration and establishing a new culture of working relationships, while defining a level playing field for work allocation and marketing the legal departments services amongst new colleagues. The company is also undertaking its first operated project development in 2011. Understanding the roles and responsibilities of each team member and in particular the need for the legal department to anticipate schedule risks, regulatory hurdles or key commercial roadblocks to ensure delivery of the key regulatory approvals and adequate commercial agreements puts the lawyer to the forefront of the project. Oversight of legal/commercial input to the contracting and tendering processes, and ultimately capturing lessons learned for the organisation has required significant day to day dedication.

With the company having reached a critical mass, we have also been focussed on the best approach for standardising contract formats, data protection and document management issues and ensuring that corporate polices and processes are fit for purpose. I also want to develop a client education program with other business services, including a series of lunch and learns for a growing workforce.

David Bate, General Counsel, Valiant Petroleum

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Leading the way for oil and gas

Herbert Smith LLP is a leading international law firm with an outstanding reputation within the oil and gas sector.
For more information please contact:

Our global network of energy specialists, covering all legal disciplines, advise the oil and gas industry on deals, projects and disputes across Africa, Asia, Australasia, Africa, Europe, the Indian Subcontinent, the Middle East and Russia and the CIS.

Stephen Murray Global head of oil and gas +44 20 7466 2270 stephen.murray@herbertsmith.com

Simon Tysoe Partner +44 20 7466 2656 simon.tysoe@herbertsmith.com

www.herbertsmith.com

Special Announcement

*** News Release Launch of The Oil Councils Legal Committee ***
The Oil Council is pleased to announce the launch of its Legal Committee. As part of our dedication to strengthening our international network we are creating a Legal Committee within The Oil Council. The Committee is a distinguished selection of legal experts working across the oil and gas industry (General Counsels and Partners from across the E&P, OFS, advisory and banking worlds). We will work with these experts to extract topical issues and insightful content to be discussed and shared across our wider network, whilst ensuring private and senior networking between the experts and other legal entities. Purpose: High-end thought-leadership and networking for legally minded professionals Level: GC and Partner only (admission to this committee is by invitation only)

*** Founding Members include***

Greg Hammond, Partner, Akin Gump Strauss Hauer & Feld (Chairman) David Lewis, Partner, Clifford Chance

Danielle Beggs, Partner, SNR Denton

Tony Peart, Legal & Commercial Director, Gulf Keystone Petroleum Sandy Shaw, Director and Group General Counsel, Valiant Petroleum

Shirin Johri, Group General Counsel, Afren

For more information and to become involved please contact: ross.campbell@oilcouncil.com

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SNR Denton is a client-focused international legal practice delivering quality and value.
We serve clients in key business and financial centers from 60 locations and 43 countries, through offices, associate firms and special alliances across the US, UK, Europe, the Middle East, Russia and the CIS, South-East Asia, and Africa, making us a top 25 legal services provider by lawyers and professionals worldwide. Our energy team comprises more than 100 lawyers covering all types of energy related work, ranking it among the largest dedicated energy legal practices in the world. The team has extensive experience advising energy businesses on all types of oil & gas projects and facilities. Areas of Focus: Upstream and downstream Pipeline transportation and storage LNG Petrochemicals Oil and gas trading Derivatives Regulation Privatization of oil and gas industries and enterprises

See All Sides Introducing SNR Denton

Contact Danielle Beggs Partner, London T + 44 (0)20 7246 7442 danielle.beggs@snrdenton.com Vince Murchison Partner, Dallas D +1 214 259 1866 vince.murchison@snrdenton.com

Special Legal Focus

The Legal Corner

"What legal steps must companies take to reduce operational risk?"
In the Middle East, operational risk continues to include a strong element of managing political risk. Oil companies negotiating new agreements should be paying particular attention to clauses which can help mitigate their risks in circumstances of government delay, changes in law, political force majeure, employment disputes and sabotage. They should also be firm in negotiating rights to receive compensation in cases of unilateral government termination and of any material adverse change occurring to their commercial position. Down the supply chain, it remains important for operational risks to be passed to contractors, service companies and other suppliers through well-crafted sub-contracts. The In-house lawyer should be playing a central role on the risk committee. There remain strong opportunities across the region for those companies who are prepared to take risks and who are savvy enough to manage them carefully.

Charles Wilson, Partner, Trowers & Hamlins

In the aftermath of Macondo, many upstream oil and gas companies have been reviewing the contracts governing their operations to assess their exposure to any incident of similar proportions. As the recommendations in BPs Deepwater Horizon Accident Investigation Report illustrates, the exercise of appropriate oversight and control of operations is a key factor in reducing operational risks. In this regard, a non-operator may find itself in an uncomfortable position. Joint operating agreements will provide that non-operators have a vote in relation to certain material decisions and impose an obligation on the operator to provide information relating to joint operations to the other partners. However, in practice the value of these provisions may be limited. A non-operator may not have a sufficient participating interest to enable it to block a vote on a matter that does not require unanimity whilst the obligation to provide information may be observed in the breach as often as not. In such circumstances, whilst a non-operator will typically (in the absence of gross negligence or wilful misconduct by the operator) bear its proportionate share of any liabilities arising from an incident it will not have rights to oversight and control commensurate with such potential exposure. Accordingly, a significant first step for all companies to take in any risk assessment is to review their rights to oversight and control and the extent to which those rights are being observed. Balanced against effective non-operator oversight is the need for the operator to have an appropriate degree of discretion and flexibility in the conduct of operations, especially in emergency situations. It is important that such flexibility is not negated by restrictions in any financing document (i.e. the financing documents should not contain a covenant which restricts expenditure being incurred in excess of an approved budget or if there is such a covenant it has suitable carve out for expenditure incurred in relation to dealing with emergencies).

Alan Rae Smith, Partner, Freshfields Bruckhaus Deringer

Macondo has meant companies must take a root-and-branch approach to reducing operational risk and take renewed accountability for operations, whether they are operators or non-operators. For operators, ensuring that best practice is used on operations by contractors is important, and so ensuring not only that contractual obligations are in place to address this but also that processes for monitoring this during operations need to be in place. For non-operators, vetting operators, ensuring that they use best practice and reviewing what they are doing is paramount - non-operators cannot afford to simply leave it to operators any more than operators can leave it to contractors. Contracting strategy needs to address this too - best practice needs to flow down and mechanisms

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Special Legal Focus

need to be put in place to make sure it does, not only so that the contracting strategy minimises risk for the joint venture but also to that other risks, such as Bribery Act exposure, are adequately addressed. Of course, risks can only be minimised so far. Things will happen and so crisis management and liability issues need to be understood and addressed. Not every company can respond to a crisis and deploy resources in the manner of a super-major, but each company needs to know how they will respond and deploy their resources in the event of an emergency. Playing a part in and leverage off of the industry wide response initiatives, such as OSPRAG's capping device, can help. Companies need to be aware of the financial liabilities that an event might place on them, either directly as operator or through cash-calls and ensure they can meet this, if necessary through recourse to insurance. Overall, companies need to ensure that they are joined up across their functions in respect of risk management no small task even for the smaller players.

Simon Tysoe, Partner, Herbert Smith

There are a number of things Oil & Gas companies operating in Argentina need to focus on in order to reduce operational risk: Insurance: Buy adequate coverage, including the recently available environmental coverage, is advisable. We are seeing a rise in controversies in this area, and this newly created type of insurance could prove useful. Environmental: Have in place a policy to constantly and strictly ensure compliance with local and national rules. Remediation can be onerous and cumbersome, and take a long time to complete. Health and safety: Carry out a strict control of the performance (of the very company and those of contractors and subcontractors) of all regulations related to health and safety requirements at work. Landowners: Obtain, before starting activities in any given area, all possible information to determine the existence of private landowners and local communities that may be affected by the operations. Reasonable and sustainable agreements should be entered into with these landlords. Royalties: Have duly trained staff prepare calculation and payment of royalties and canon (land use rights), and have experienced outside counsel control and audit these calculations and payment. This helps avoid unexpected and sometimes exorbitant claims from the tax collectors. Regulations on royalties are complex in Argentina, and can sometimes seem contradictory or subject to various interpretations. Contractors and subcontractors: Have a constant control policy (including review of relevant documents and proof of payments) of labour-related information from contractors and subcontractors. It is common practice in Argentina to have a substantial part of the employees required for the operations hired through contractors and subcontractors. Argentine labour regulations establish joint and several responsibilities for companies using these contractors for most aspects, including the payment of salaries, payroll taxes, social security charges and contributions. Regulatory: Have a strong policy to comply with all relevant registration requirements, and maintain them over time. This will help avoid fines and sanctions that can obstruct or suspend activities. Local and federal registries sometimes overlap, even when this may be unconstitutional.

Having counsel prepare a quarterly report on regulatory developments for the oil & gas industry is something companies appreciate as a means of keeping abreast of what the current requirements are and avoiding pitfalls.

Pablo De Rosso, Partner, Martelli Abogados, Argentina

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Finding the right solution for your business

Addleshaw Goddard is a leading legal adviser to the UKs FTSE 100 that provides strategic advice to oil and gas companies on debt and project financings, dispute resolution, mergers and acquisitions, stock market fundraisings and IPOs. Through a commitment to delivering the best advice every time, our clients benefit from the extraordinary effort that we invest in our relationships. To find out more about how we can deliver differently for your business, contact: Andrew Petry on +44 20 7160 3520 or Simon Griffiths on +44 20 7880 5666
www.addleshawgoddard.com

Online Columnists This Month Include...

LISTEN TO THE OIL COUNCILS JUNE PODCAST IN CONJUNCTION WITH PLATTS. THIS MONTH
John Kingston, Director of News at Platts speaks with Mark Harrington, Chairman and CEO of Best Energy Listen to this podcast now here

Considering the current and ever growing regulatory jungle of environmental, municipal, and international laws, its amazing that any projects get accomplished. The ability to provide sustainable, reasonably priced energy is becoming more and more challenging. Smaller producers are strapped with meeting the same regulatory and compliance issues as the major players, and the costs can be staggering. But there is some light at the end of the tunnel Read the rest of Kevins columns here...

The recent OPEC meeting revealed an organization not seen in almost 20 years, reminiscent of a pre-financial crisis OPEC or an OPEC of the 1990s, one that could not close its ranks. We just witnessed a chink in the armour so to speak. Read the rest of Giannas column here...

With an estimated 6,622Tcf worldwide, a quick glance at the table of such resources in Europe shows that shale gas is most abundant in France and Poland, with the two countries carrying comparable technically recoverable resources of 180Tcf and 187Tcf respectively. But all similarities end there, with each country responding to this in completely different ways. Read the rest of Elaines column here...

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::: June 2011 Edition

Quality reserves of legal experience

Clifford Chance brings international insight, local expertise and a long-term commitment to key oil and gas markets the world over. Whether you are contemplating an upstream investment in Asia, a downstream project in the Middle East or simply need help navigating your way through the complexity or diversity of handling a deal or dispute in Africa or Europe - we have the team and experience to assist you. Our expertise in M&A, finance, dispute resolution and environmental regulation is widely acknowledged in the oil and gas industry and this is reflected in our current Tier-1 ranking as an oil and gas firm by global legal directories.

Clifford Chance LLP

Visit www.cliffordchance.com/oilandgas to discover more about Clifford Chances oil and gas expertise.

We have a global commitment to diversity, dignity and inclusiveness.

Meet The Members

Member
Nicola Dennes Principal Consultant, Cripps Sears

Member
Dougie Youngson, Director, Oil & Gas, Arbuthnot Securities

How did you come to be in the oil industry? Id like to say it was strategic decision but, having studied Computers & Business studies, I was deemed an ideal candidate to recruit professionals into BG/Transco. This led me into financial recruitment in the City, followed by three years working in Sydney, before coming back to London. I joined Cripps Sears & Partners in 2006 and co-lead the Oil & Gas Professional Services Practice. I focus on corporate support for Oil & Gas companies, and related professions i.e. energy focused lawyers, accountants, and advisors to the sector. What is your proudest work-related achievement to date? Success and, ultimately, achievement in my business is about working with clients who value our approach as a trusted advisor, identifying the right person and presenting them with the right opportunity which allows both them and company to grow. I have recently moved people from Aberdeen to Geneva, London to Dubai, London to Aberdeen. I love the fact I can really make a difference to how people maximise their careers and actually live their lives. Where do you see the greatest challenge in todays oil and gas markets? The much publicized technical skills shortage remains prevalent, particularly within subsurface technical disciplines at the 10-20 year experience level. Combined with a large number of individuals approaching retirement (and a shortage of skilled individuals to replace them), this is leading to more junior people being relied upon to fill the gaps where often the technical, and particularly leadership skills (people skills) are not as developed, and need further training. One solution to stop this loss of experience is to bring skilled individuals back as advisors as QA/QCs.

How did you come to be in the oil industry? It was a slight accident. Originally, I was in ADL's Chemical team, but they needed someone to go work in Kuwait, so off I went. Never looked back.

What is your proudest work-related achievement to date? Taking an unknown, illiquid AIM stock from 10p to 400p and turning it into a market darling (for a while). Raised them a lot of money on the way so that they could do some very successful drilling.

Where do you see the greatest opportunity in todays oil and gas markets? Revisiting mature and abandoned fields. Enhanced oil recovery in a high oil price environment will become a growing market as exploration and geopolitics get harder. The North Sea for example still has a lot to offer, not just in terms of EOR but also looking at the heavy oil reserves which have yet to be tapped in a significant way. Where do you see the greatest challenge? Companies getting their strategies right. I still find it amazing how few companies have one or can stick to one. It is the key for getting things done.

Are you an Oil Council Member? If not apply now:

http://www.oilcouncil.com/index.php?page=becomeamember

Meet The Members

What was the wisest advice you ever received from a mentor? A thought that I am particularly fond of is: I wonder what will happen in my life today. I have also been told: You can do anything, but you cant do everything; I still believe that I can do both though What advice would you pass on to a graduate wishing to work in your line of business? You have to be passionate about what you do every single day. You meet some amazing people; it is hard work, relatively long hours, you have to be very flexible (especially in relation to travel) and you can never turn your Blackberry off. Whats the one interesting fact about you that no one would suspect? I have had a personal guided tour of The Pentagon. How do you prefer to spend your spare time? There is no spare time; time not spent working is training or socialising time. This often involves encouraging my friends to sign up for, and then train for, interesting sporting events. (I confess alcohol has been used in some cases). My passion is triathlon, ideally outside the UK. I am currently on countdown training to my first of two Ironman triathlons this year, one in Germany and the other in Arizona. (2.4 mile/3.86km swim, 112mile/180km cycle, and a marathon 26.2miles/42km run) Favorite holiday destination? A holiday for me, in the main, is about travelling and really getting to know a country. Ideally, this would be either in the USA, as they do a mean taco and breakfast burrito, or SE Asia, as all the food there is fabulous. I do occasionally sit on a beach, for about an hour. All-time favourite book? London by Edward Rutherford a fast moving historical novel spanning sixteen centuries of London, my favourite city. All-time favourite film? Apocalypse Now Redux.

What was the wisest advice you ever received from a mentor? Size matters not. Look at me. Judge me by size, do you?

What advice would you pass on to a graduate wishing to work in your line of business? Build up your network of contacts from day one. You can never know enough people and you never know when you might need them.

Whats the one interesting fact about you that no one would suspect? One of my knees is artificial, guess which one. How do you prefer to spend your spare time? With friends.

Favourite holiday destination? Not really a holiday destination, but I feel more at home in Amsterdam than anywhere else. I do love SE Asia though and love travelling there.

All-time favourite book? I don't really have one as I read so much. Going through a Swedish crime novel phase at the minute so probably one of the Wallander series. All-time favourite film? Not Star Wars despite my answer above. Probably Groundhog Day, I could watch it over and over again. What 3 things would you take to a desert island? A parang, flint fire lighter and Ray Mears (and if not him, one of his books).

What 3 things would you take to a desert island? My two year old Vizsla dog, who I concede has even more energy than me; my on-going subscription to National Geographic; finally, I am torn between my Garmin 310XT and a fully stocked bar with valet. Sadly though, with current training pressures, I think the Garmin will have to win - just this once.

Are you an Oil Council Member? If not apply now:

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Oil & Gas Company Executives Register Today for only $1 495! Special Industry Delegation Discounts Also Available!
Featuring some of the industrys most influential minds, including:
Frank Holmes CEO and CIO US Global Investors

Oil Council
ENERGY CAPITAL ASSEMBLY AMERICAS

Welcoming A New World Order: Defining the Roadmap for Future O&G Finance and Investment

Peter Tertzakian Chief Energy Economist, Managing Director, ARC Financial and bestselling author

Ed Cohen Chairman and CEO, Atlas Energy

Jose Francisco Arata President, Pacific Rubiales

October 5 6, 2011 Hyatt Midtown, New York City, USA

The defining event for the Americas oil and gas, finance and investment communities
CEOs and CFOs talk on the leadership challenges they now face in ensuring new growth within over-regulated, increasingly competitive and volatile markets Renowned market commentators discuss the dynamics of todays macroeconomic landscape Energy banking legends explore the Dodd Frank Act, the future of commercial lending, the availability of finance and new sources of energy capital A plethora of financial advisors, institutional investors and PE investors explore NA and global M&A/A&D activity, deal flow and transaction metrics, capital raising trends, capex deployment and new investment strategies Plus special focuses on the US Shale Gale; the pressures facing regional and domestic NGL markets; the future of Canadas oilsands; new regulation and moratoria; the continuing rise of LatAm as an energy power; and the growing influence of Asian NOC investment strategies

Adrian Goodisman Managing Director and Co-Head U.S, Scotia Waterous

John Bookout Managing Director, KKR

John Moon Managing Director, Morgan Stanley Private Equity

Tony Weber Managing Director and Chief Investment Coordinator, Natural Gas Partners

Lead Partners:

Edward Morse Global Head, Commodity Research Citi Global Markets

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