Watson Farley & Williams (WFW) Oil & Gas newsletter
This is the first bi-annual WFW newsletter in which WFW Energy Sector team reflects on what we are seeing in the Oil & Gas market combined with reviewing recent reported judgments, regulatory developments and articles appearing in Oil & Gas focussed media. The North Sea was the backdrop for active and diversified market investment in the 1980s, leading to the establishment of Brent Crude Oil as the world’s key price benchmark. Now, with declining production, aging infrastructure and regulation directed at decommissioning, transition and decarbonisation, it is becoming a bellwether for investors and parties with interests in mature oilfields including so-called “late life specialists”.
The Brent crude oil benchmark is itself in transition as the industry considers the inclusion of non-North Sea Oil and other changes in the face of liquidity issues and to ensure the benchmark’s continuing relevance.
A favourable regulatory and fiscal environment was one of the advantages of North Sea Oil markets in the 1980s. It seems that the UK government is laying the groundwork for future regulation, at least in the mid/downstream market to assist the industry and ensure supply as the pace of transition quickens. As such, in this edition we consider the draft Downstream Oil Resilience Bill presented to Parliament by the Secretary of State for Business, Energy and Industrial Strategy in June 2021.
In this edition we also review a series of decisions which have been handed down recently in the English courts which focus on reimbursement of advance payments in oil/products sale and purchase agreements and prepayment agreements. We also consider two decisions involving legal principles which are frequently considered in trading disputes.
We next comment on the July 2021 Supreme Court decision of Triple Point Technology, Inc v PTT Public Company Ltd¹ (in which our Energy Sector disputes team acted for the successful party). That judgment focussed on important questions concerning the law of liquidated damages in relation to an agreement for the development and installation of a commodities trading risk management platform.
With respect to LNG, we look at some of the more significant issues faced generally by LNG vessel owners when constructing and financing LNGCs against long-term charters. Furthermore, we report on natural gas and where this currently fits in EU Taxonomy.
Finally, our Energy Sector team has recently been enhanced by two partners joining WFW and we extend a warm welcome to Julian Nichol and Sumeet Malhotra.
CONTENTS
Mature oilfields and aging infrastructure
Platts’ July 2021 consultation on the inclusion of WTI in the Brent complex
Downstream Oil Resilience Bill
Prepayment, advance payment and the uncertainty of supply
2021 focus on trading
Triple Point Technology, Inc v PTT Public Company Ltd
LNGCs for new LNG export projects
Gas taxonomy
Expanding our global expertise
Read More WFW OIL & GAS NEWSLETTER – ISSUE 1
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