LO&G members have extensive experience in commercial negotiations of different types of Petroleum Agreements. Additional legal support is generally required.

1. License and Contracting Agreements

  • Signed between host country or state company and an Upstream Company to exploit hydrocarbon resources
  • Cover among other the following aspects
    • Obligations during exploration, appraisal, development and production phase (eg minimum work obligations, abandonment obligations)
    • Ownership, transfer and assignment of assets and rights
    • Government Take (eg Taxes, Royalties, Cost Share, Profit Share, Boni, etc.)
    • Term and termination
    • HSE regulations and obligations
    • Liabilities, representations and warranties
    • Ownership of data and confidentiality
    • Legal framework (e.g. applicable law, Force Majeur, Dispute solution, etc.)
  • Concession / License Agreement
    • License to explore and exploit hydrocarbon resources
    • Hydrocarbons produced belong to the upstream company
    • Government Take via Royalties and taxes
  • Production Sharing Agreement
    • Upstream Company receives share of the hydrocarbon produced
    • Entitlement includes limited cost share to recover cost and additional profit share on the remaining production
    • Government Take could be additionally increased by taxes
  • Service Agreements
    • Upstream Company assumes the risk of the operations but has no entitlement to the hydrocarbon produced
    • It receives a service fee (remuneration) based on the value of the hydrocarbon produced

2. Intercompany Agreements

Confidentiality Agreement

  • Purpose: Exchange of data and confidentiality regulations
  • Definition of Confidential data
  • Duration of confidentiality obligation
  • Liability (and eventual penalty) in case of violation
  • Eventual non-competition clause
  • others

Joint Study Bidding Agreement

  • Purpose: Setup of a Joint Study and Bidding Group to jointly study and eventually supply a joint bid for an opportunity offered i.e. in a public license round or a public tender
  • Shares in the group and determination of Operator
  • Cost and work program of the study
  • Default regulations
  • Determination of potential bid
  • Preliminary rules for Joint Operating Agreement
  • Non-competition clause
  • Legal Framework (Term, termination, confidentiality, applicable law, liabilities, etc.)
  • others

Farm In / Out Agreement

  • Purpose: Acquisition / Sale of an asset (Asset Deal)
  • Often applied in exploration ventures, but also applicable for assets in other stages
  • Determination and share of asset to be assigned
  • Compensation for transferred asset (cash compensation, carry obligation, overriding royalty, net profit interest, etc.
  • Legal Framework (Term, termination, confidentiality, applicable law, liabilities, etc.)
  • others

Joint Operating Agreement (JOA)

  • Purpose: Setup of contractual framework for the joint operation of (an) asset(s)
  • Designation of the responsible party to carry out the operations (The Operator)
  • Tasks and responsibilities of the operator
  • Definition procedures of annual budgets and regulations for potential overruns
  • Rules for decision making processes
  • Rules for ‘Sole-Risk Operations’ (complex, but helpful, if certain operations are not agreed unanimously)
  • Liabilities
  • Accounting principles, rules for cash calls and auditing of the operator
  • Default regulations
  • Legal Framework (Term, termination, confidentiality, applicable law, liabilities, etc.)
  • others

Share Purchase Agreement (SPA)

  • Purpose: Acquisition / Sale of (shares of) a company
  • Determination and shares of company to be transferred
  • Compensation of purchase price
  • conditions precedent (i.e. conditions which need to be fulfilled to make the transfer binding
  • Closing procedures (i.e. legal and commercial steps to be taken to materialize the transfer of shares
  • Representations and warranties
  • Legal Framework (Term, termination, confidentiality, applicable law, liabilities, etc.)
  • others