Oil & gas: area of practice
Oil and gas solicitors are involved in all aspects of the oil and gas sector, ranging from M&A transactions involving oil and gas assets, the financing and development of oil and/or gas projects, to high-profile disputes between key players in the oil and gas space. Nikhil Markandy is a project finance lawyer and this article is focused on project development and finance work in the oil and gas sector.
The sorts of clients you'll advise as an oil and gas lawyer
Clients include International Oil Companies (IOCs), National Oil Companies (NOCs), financial institutions and banks, construction companies, authorities and host governments. There is a lot of client interaction from an early stage, and as you will be working with clients for many months, friendships tend to develop – it’s a real team-player environment.
Transactions vary greatly in time to complete and in complexity. They typically start with the awarding of a project to a particular company or consortium (and usually after some form of bidding or competitive process). Then follows a project structuring phase, which involves agreeing key terms of the project with the awarding authority or host government and developing a number of strategies: a strategy for the actual construction of the project; an operating strategy for when it’s built; and a financial plan. The parties then move on to document execution, which lasts for around three months and tends to be the most intensive period of the process, as it involves documenting the agreed deal. Typically, the projects we work on tend to last between six and eighteen months.
Working hours are normally from 9.00 am to around 7.30 pm, though it can be cyclical depending on whether a transaction is closing. This means there might be months in the year when it’s very quiet and a trainee can leave early; it also means there will be other months when the nights are late. Aside from this, the hours remain fairly predictable – though it’s busy, corporate projects is not usually an area where urgent deals come in on a Friday night and require a two-day turnaround.
Travelling is common, as where you work will depend on the location of the project and the clients – my team is currently working in Africa and the Middle East. This international element will sometimes mean irregular working hours. Junior lawyers are offered a lot of opportunities to travel, and typically trainees working on projects at an international firm have a well stamped passport.
The best part of being an oil and gas solicitor is getting to work on high-profile projects which are often in the news. The downsides are that complex and often expensive projects can be susceptible to long delays, be it due to the economic or political environment. For example, during the credit crunch it was difficult for many projects to attract finance, and many projects in the Middle East were delayed or even cancelled during the Arab Spring.
We are continually seeing new project structuring and financing techniques, which are being developed to cater for project-specific issues and concerns. This is an area that never stops developing.
How recession proof are oil and gas legal departments?
It has been harder for certain projects to attract finance on acceptable, cost-effective terms. This has resulted in a fewer number of projects achieving a close when the economic climate is affected.
The work you can expect to be given by law firms as a trainee solicitor
Trainee tasks are varied, but include drafting and research, as well as conditions precedent tasks; these are the various documents and formalities that need to be satisfied before a transaction can close. Conditions precedent tasks offer early responsibility to trainees, who are often allowed to run that part of the project with limited supervision. As such, there is plenty of scope for client contact. Sector-specific commercial knowledge is important for trainees in this practice area. During the process of a transaction the commercial aspects are often as important, if not more so, than the black letter law.
Types of law practised
- Banking and finance.
Successful oil and gas solicitors have...
- Commercial awareness.
- The ability to analyse projects from different perspectives.
- An appreciation of each party’s concerns and objectives.
- The ability to work methodically and manage a diverse workload.
- A keen eye for detail.
NIKHIL MARKANDAY is a partner in the corporate projects group at ASHURST LLP. He graduated with a degree in law from UCL in 2000.