# Introduction

Petroleum is a finite resource, which significantly influences the business decisions of governments and companies. Consequently, most petroleum contracts are designed to consider the entire project lifecycle—from initiation to completion.

Upstream petroleum contracts can vary widely in their specifics, but all must address two fundamental issues: how profits are shared between the government and the participating companies.

This GLOMACS Upstream Petroleum Contracts training course offers comprehensive insights into the various types of upstream petroleum contracts, highlighting their differences and the key contractual terms necessary for a thorough understanding. Participants will explore Production Sharing Contracts, Exploration and Production Agreements (E&P), and License Agreements, gaining essential knowledge to apply in their own organizations.

Designed to be highly practical, this course includes interactive sessions that address real-world issues and pitfalls to avoid. A well-negotiated and drafted upstream petroleum contract should endure over time, providing stability while allowing for adaptability as circumstances evolve.

### Course Highlights

– Overview of fundamental types of upstream petroleum contracts
– Advantages and disadvantages of different contract types and their suitability for specific projects
– Detailed examination of Concessions, Production Sharing, and Risk Service Contracts
– The role of Joint Operating Agreements (JOAs) in resolving disputes
– Key terms related to unitization and Farm-in/Farm-out agreements

## Objectives

By the end of this training course, participants will:

– Acquire a comprehensive understanding of different types of upstream petroleum contracts
– Recognize the main contractual terms and differences between various contracts, including PSAs and Service Contracts
– Gain insight into negotiation strategies for these contracts
– Learn how to incorporate best practices into upstream petroleum contracts

## Training Methodology

Participants will deepen their understanding through presentations by experienced international practitioners, case studies, and discussions that reflect realistic scenarios. Interactive dialogues will encourage problem-solving, while negotiation simulations will provide practical experience in negotiating a Production Sharing Agreement (PSA).

## Who Should Attend?

This course is beneficial for personnel at all levels involved in oil and gas dispute resolution. It is particularly suitable for:

– Senior Contract Negotiators and Managers
– Legal Managers and Counsel
– Commercial and Business Managers
– Contracts Administrators
– Financial and Insurance Professionals
– Project and General Management Personnel

## Course Outline

### Day 1: Introduction and Overview of Upstream Petroleum Contracts

– Overview of the Oil and Gas Industry
– Key Oil and Gas Terminology
– Legal Framework for Upstream Contracts
– Contract Formation Basics
– Relationship Dynamics in the Oil and Gas Industry
– Phases of Oil and Gas Projects
– Fundamentals of Oil and Gas Contracts
– Territorial Waters and UNCLOS

### Day 2: Contracting in the Upstream Sector: Ownership and Licensing

– Ownership and Exploitation of Reserves
– Types of Petroleum Contracts: Licenses, Concessions, Joint Ventures, and PSAs
– Characteristics of Upstream Contracts
– Commercial Realities in Oil and Gas
– Agreements with Resource Holders
– Host Country’s Legal and Regulatory Framework
– Key Issues in International Oil and Gas Contracts
– Overview of Upstream Operations and E&P Agreements

### Day 3: Production Sharing Contracts (PSC) & Joint Operating Agreements (JOA)

– Commercial Terms in Licensing and Concession Agreements
– Key Financial Aspects of PSCs: Royalties, Cost Oil, Profit Oil, and Taxes
– PSC Cash Flow Distribution and Examples
– Understanding Joint Operating Agreements: Nature and Function
– Key Areas of the JOA

### Day 4: Service Contracts, Farm-In and Farm-Out Agreements, and Unitization

– Participation Agreements: Farm-in and Farm-out
– Understanding Unitization and Unit Operating Agreements (UUOAs)
– Government Approval and Transboundary Unitization

### Day 5: Negotiating Production Sharing Contracts

– Key Negotiation Issues: Government Take, Production Share, and Force Majeure
– Dispute Resolution and Stabilization Provisions
– Negotiation Simulation Exercise: PSA Negotiation with Government Entities
– Feedback Session on Negotiation Techniques
– Importance of Principled Negotiation in Oil and Gas Business

This training course equips participants with the necessary tools and knowledge to effectively manage and negotiate upstream petroleum contracts, ensuring they can navigate the complexities of the oil and gas industry.