3 October 2017
Andrew Shaw Partner, Oil & Gas Team in international law firm CMS Cameron McKenna Nabarro Olswang LLP
Interviewed by Slimane Bouabbane
A few words about your career in the industry
I am a partner in the Oil & Gas team at CMS Cameron McKenna Nabarro Olswang LLP and have more than 15 years’ experience in oil & gas law. During my career I have advised various junior, major and supermajor oil & gas companies, shipping companies, utilities and funds in relation to the upstream, midstream and downstream aspects of the oil & gas industry. I am focused on commercial contracts and have particular expertise in oil & gas supply chain, procurement and projects contracting, advising on exploration, development, operations, logistics, decommissioning and shipping contracts, and have advised many international companies on strategy in this area, including in relation to template agreements and global arrangements. I have undertaken secondments to the legal departments of Baker Hughes, BG, BP, Cairn Energy, ExxonMobil, GDF Suez, Petro-Canada, Talisman Energy, TAQA and Subsea 7.
When it comes to negotiating transactions, what do you think are the biggest challenges?
Nearly all the transactions I negotiate are within oil & gas supply chain, procurement and projects contracting. Some of the values in this area are very high (whereas others are not so…). The biggest challenge is disassociating value from risk. Some of the lowest value contracts can have the highest risk potential. As the oil & gas industry operates in some of the most unstable countries in the world and in working conditions that are the most hazardous of any industry, it is challenging to make sure that you adapt your legal approach to reflect what is happening in practice.
What is your key advice for a good deal?
Build rapport. The oil & gas industry is built on relationships. Some of the most difficult deals to negotiate have only been completed where the parties truly trust each other. There is nothing better than face-to-face negotiations when the going gets tough.
Are there specific issues with equipment transactions that you think companies should be careful with?
Over the years I have done many contracts for companies in the oil & gas industry selling and buying surplus equipment. Typically the warranties in relation to the condition of the equipment are very limited (if any), appropriate inspection is therefore very important, including inspection of associated documentation. There are many instances of damage or defect which does not show up under a simple visual inspection.
Can you share one story with us about an interesting transaction you have been involved with?
I was involved in the negotiation of a supply and long term maintenance agreement for twelve engine packages for an LNG terminal. As this was a major transactions, we had a week long kick off meeting, where as well as discussing the parameters of the deal, great steps were made to build rapport between the two negotiating teams. Following this meeting we moved to a series of telephone and video conferences, during which nearly all the goodwill of the initial meeting was lost, and it began to look like the transaction would never get concluded. The meetings were then brought back to face-to-face and over a very short period of time issues which looked like being insurmountable were quickly ticked off, and the deal was concluded successfully and, most importantly, both parties felt it worked for them.