Practice areas
Energy: Oil & gas exploration & production
The primary focus of our activities in this sector is the procurement of equipment for offshore E&P activities.
We advise operators, contractors, suppliers, financiers and insurers on a range of contracts and disputes relating to the procurement of offshore equipment, in particular seismic vessels, drilling rigs and drillships, ROVs, accommodation units, production facilities and ships, diving and other offshore support vessels, and as well as in relation to the chartering/employment, management, secondhand sale and purchase, financing and ownership of these units; we have recently developed particular expertise in relation to rig sharing agreements between oilfield operators. As the search for offshore oil extends continually into deeper waters and more challenging exploration locations, the "hardware" needed to support offshore E&P activities becomes ever more sophisticated and the financial and other risks, including in particular environmental risks, grow exponentially - this in turn generates a need for significant risk analysis and the preparation and negotiation of procurement and employment contracts for offshore units which clearly define the allocation of risks and responsibilities between the oilfield operator and its various field contractors and suppliers.
We are in particular very familiar with the practical issues associated with the installation and operation of equipment in an offshore oilfield. The complexity of these operations is such that a wide range of contractors will be involved, and will visit the field to assist, in the installation, operation and maintenance of the various facilities. It is critical in these context that a sensible and effective liability regime (including a coherent "knock for knock" structure and underpinned by a matching insurance regime) is in place to cover property damage, personal injury and pollution - we are very experienced in dealing with these complex and important issues.
An area of significant complexity with which we are very accustomed is the employment of floating production, storage and offtake (FPSO) vessels, floating storage (FSO) units, tension leg platforms (TLPs) and spars for offshore oilfield processing and storage.
The enormous advances in recent years in FPSO technologies have had a particularly dramatic impact on oilfield economics by providing operators with a safe and efficient method of exploiting previously inaccessible deepwater fields and a cost-effective means of developing marginal fields. This is a very specialised area in which partners of the Firm have been involved since the mid-1980s and we are almost certainly the most experienced UK law firm working in this area. We are particularly expert in advising on compensation mechanisms for the operation of FPSOs, including the complex issues arising in relation to vessel downtime and production shortfalls.
In relation to FPSO projects, our transactional team is frequently asked to prepare and negotiate all of the necessary documentation for the engineering, procurement, construction and installation of the vessel and its associated processing equipment. Where the operator has determined to employ a modular contracting strategy, this might involve a purchase contract for the procurement of the hull; a shipyard contract for the hull upgrading and conversion; a contract for the construction and installation of the topsides/process equipment; a contract for the subsea equipment and works required for the installation of the FPSO; and related contracts for the design, engineering, verification/classification and supervision of the various works.
