Press Release – As oil and gas companies all over the world are reaping the whirlwind and living the boom times, so are the companies that broker the deals and seal the mergers – law firms.
As oil and gas technology reaches new highs and plumbs new depths for profits the world’s top ten oil and gas law firms made more than $20 billion in 2012. While that is a huge amount in net profits, between January 2010 and September 2012, lawyers helped to transact an average of more than twice that amount per month, sealing approximately $47.6 billion – worth in energy deals every 30 days.
Over 21 months, that was roughly the GDP of South Korea, the world’s 15th largest economy. Although the money has kept on rolling in, the contracting landscape has not been all plain sailing as the latest industry survey shows.
The Macondo Effect Is STILL a Fact
It is now more than three years since the blowout at the Macondo 252 well in the Gulf of Mexico caused the second worst accidental oil spill in human history. Despite in excess of a thousand days passing between then and now, 17 out of every 20 oil and gas contract counsel surveyed believe that the repercussions of that fateful day in April 2010 can still be felt even now in the contracting world.
With phase two of the BP Trial to begin in September, there can be no doubt that the Macondo is the industry’s seminally – defining event.
Joint ventures have become more of a headache
More than half of those legal professionals surveyed believed that the multiparty joint ventures were more difficult to marshal after the Macondo disaster.
The lengthy legal proceedings and billions of dollars in fees and damages that have so far been meted out in the fallout from Deepwater Horizon would be “company killing events” for organisations throughout the world without the financial clout of a BP or Halliburton, and companies have taken heed.
Environmental concerns climb the agenda for contract counsel
Only 48 per cent of respondents considered environmental law to be an “important” or “extremely important” part of their remit. Almost five million barrels of spilled oil later, this changed dramatically, with 67 per cent of legal professionals now considering the environment in this way, with those considering the environment as “extremely important” almost doubling to 47 per cent. The high profile succession of 13 hydrocarbon spills in 30 days across the Americas and Africa between March – April 2013, only served to heighten the awareness of legal implications when things go wrong in oil and gas.
The environment rears its head again in the shale arena
In the USA, shale oil and gas, coupled with oil coming from the oil sands in Colorado and Utah, are touted to make the USA a net hydrocarbon exporter and self – sufficient in all energy needs by 2035. The journey started by major shale exploiting companies like Anadarko, Chesapeake and Encana will soon be trodden by the likes of Chevron in Eastern Europe and Cuadrilla and IGas in the United Kingdom, where revised estimates project that total exploitable shale reserves may be 20 times larger than previously thought. Of the obstacles faced by US shale corporations since the industry’s eclosion in 2008, the legal practitioners agreed by far that the largest area of concern would be around air and water pollution regulation, areas where there has be fraught legal wrangling and much public scrutiny.
Contract Risk Management Training for Oil & Gas will be hosted on 8 & 9 July 2013 in Aberdeen, UK. For more details, visit the website: www.contractrisktraining.com.
Source: Contract Risk Training, June 18, 2013