# Introduction

A Production Sharing Contract (PSC) is essential in major oil and gas-producing countries, each with unique approaches and complexities. These intricate agreements feature various clauses requiring specific legal interpretations and fiscal calculations. Understanding these terms is vital for accurate formula calculations and successful implementation of the agreement.

During this training, participants will gain a solid understanding of the fundamentals of PSCs, alongside negotiation techniques for Joint Operating Agreements (JOAs) that are effective in international and multicultural contexts. Attendees will also learn to negotiate collaboratively with legal counsel, ensuring that negotiated terms are incorporated into enforceable agreements.

This course is specifically designed for professionals engaged in the oil and gas industry, both nationally and internationally. It offers a unique opportunity to deepen your understanding of the legal issues surrounding PSCs and JOAs, enhancing your skills in drafting related contracts.

This **GLOMACS training seminar** will cover:

– The evolution of PSCs, service agreements, and concession systems
– Joint Operating Agreements (JOAs)
– Comparative analysis of model PSCs across different countries
– Negotiation techniques and the role of legal counsel
– Explanation and analysis of key provisions essential for effective PSCs

## Objectives

By the end of this training seminar, participants will:

– Understand the evolution of PSCs, JOAs, and service agreements
– Learn negotiation techniques and the role of legal counsel
– Compare model PSCs from various countries
– Identify and analyze the key provisions necessary for effective PSCs
– Understand PSC arrangements within the host government’s contractual framework
– Avoid common dispute causes and gain insight into international dispute resolution, including negotiating arbitration clauses
– Recognize typical challenges and pitfalls in PSC negotiations

## Training Methodology

This interactive training course will provide participants with the opportunity to enhance their skills in planning, negotiating, and managing PSCs and JOAs. The course includes role-playing, case studies, discussion groups, and scenario-building exercises. A key component will be a simulation of PSC and JOA negotiations, allowing participants to apply the knowledge gained and negotiate more effectively. This hands-on approach will provide practical insights into risk management and reward enhancement.

## Organizational Impact

Organizations will benefit from this training by:

– Improving the expertise and skill sets of personnel managing PSCs, focusing on essential clauses
– Comparing existing PSC arrangements with those from other key oil-producing countries to develop better contract strategies
– Understanding risk factors in PSCs and learning how to mitigate them before they impact profitability
– Enhancing claims management and dispute resolution capabilities, while promoting non-adversarial approaches

## Personal Impact

Attendees will gain valuable insights from this training seminar, including:

– An accelerated understanding of the legal issues involved in PSCs and JOAs
– Knowledge of key players in the international oil and gas industry
– Analysis of negotiation techniques and the role of legal counsel
– In-depth explanations and analyses of key provisions in international oil and gas contracts, such as:
– Operating/Joint Venture Agreements
– Concession/Royalty Agreements
– Hydrocarbon Sales Agreements
– Insurance and Service Company Agreements
– Principal standard form contracts used in the industry
– An overview of the international dispute resolution framework, including challenges unique to the oil and gas sector
– Key legal risk management issues and principles of English contract law
– Strategies for managing and mitigating risks associated with PSCs and JOAs

## Who Should Attend?

This **GLOMACS training course** is ideal for operator and contractor professionals involved in PSC and JOA negotiation and administration, including:

– Contracts Managers and Administrators in the oil and gas sector looking to enhance their drafting and negotiation skills, particularly regarding risk assessment clauses
– Legal practitioners aiming to deepen their knowledge of oil and gas contract law and avoid common pitfalls
– Geologists and engineers seeking a practical understanding of the legal aspects surrounding contracts
– Academics and students interested in specializing in oil and gas law
– Insurance and risk managers aiming to reduce legal and contractual risks for their organizations
– Government departments, policymakers, and regulators

## Course Outline

### Day 1: Introduction to Upstream Agreements & Production Sharing Contracts (PSCs)
– Legal framework and contract law principles
– Fundamentals of oil and gas contracts
– Agreements with resource holders
– Overview of Production Sharing Contracts (PSCs)

### Day 2: Agreements Between Co-Venturers
– Agreements with resource holders
– Leases and service agreements
– Concessions and licensing
– Examples from three international jurisdictions
– International model form confidentiality agreements (CAs)
– Joint Operating Agreements (JOAs)
– Drafting issues in standard model form international operating agreements
– Unit operating agreements and unitization

### Day 3: Production Sharing Contract (PSC) Structure
– Key characteristics of PSCs
– The role of the state in PSCs
– Investor exploration activities and risk
– Ownership of production and contractor nature under PSCs
– Product sharing: substance and procedure
– PSC sample content and format
– Drafting issues workshop

### Day 4: Minimizing Loss Through Careful Limitation of Liability Clauses
– Drafting enforceable liquidated damage clauses
– Handling consequential damage waivers
– Mitigation of damages clauses
– Contractual limitations periods
– Transferring risk via contractual indemnity
– Managing risk through insurance provisions
– Effective claims management strategies

### Day 5: Preventing Costly Litigation through Effective Use of Alternative Dispute Resolution
– Common contract pitfalls to avoid
– Types of dispute resolution mechanisms
– Evaluating litigation vs. arbitration options
– Mediation considerations
– Selecting effective mediators and arbitrators
– Drafting effective dispute resolution clauses