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Energy Disputes

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International energy companies operate in a complex and challenging environment. Investments in the energy sector are often high-value, high-risk transactions involving projects that rely on cutting edge technology. In addition to the technical challenges in this heavily regulated industry, the progressive development of reserves and infrastructure around the globe, and the need for ongoing geographic diversification, have exposed energy companies to increased legal and political risk. In such an environment, despite best business practices, disputes may be unavoidable.

When disputes occur, energy companies expect their lawyers to be true specialists that understand the industry. The Energy Disputes Team focuses entirely on advising and representing clients in the energy sector. Their experience covers all forms of dispute resolution, including international arbitration (both commercial and investor-state), litigation (either of the underlying dispute or in support of arbitral proceedings), expert determination, adjudication and mediation.

CMS is consistently ranked in the Global Arbitration Review ‘GAR30’ of the world’s busiest international arbitration practices and ranked by Legal Week in 2015 in the top 10 litigation firms by revenue. The Energy Disputes Team has a recognised expertise and track record in high value and complex international arbitration and litigation in the energy sector.

As trusted advisers to numerous international energy companies, our energy disputes offering is truly global. We advise clients across the world, from the UK to South America to the Far East. We have significant recent experience in regions such as continental Europe, sub-Saharan Africa (for example, Angola, Cameroon, Congo, Madagascar, Nigeria), North Africa (including Algeria, Egypt, Morroco, Tunisia), the Russian Federation, the Middle East (including extensive experience in Iraq) and Brazil.

Project Advisory and Risk Management

The team also offers a ‘Project Advisory and Risk Management’ service - offering advice on how to avoid disputes at every stage of the lifecycle for major energy projects. As the legal, contractual and regulatory environment in which major projects are delivered becomes ever more complex, proactive management of risk has become a critical part of delivery strategies. 

Our team provides flexible support to help you maximise opportunities and manage time, cost and quality risks that have the potential to impact the successful outcome of a project. This early intervention by our team minimises your risk of a costly dispute, protecting your reputation and your relationship with clients. 

Our services include analysis of documentation and procedures, producing proforma documents and communication strategies, delivery of teach-in workshops to project delivery and commercial teams, regular project surgeries and risk review workshops, telephone helpline providing real-time project advice and post completion reviews.

"The team has an in-depth knowledge of the oil and gas industry and the types of issues company like ours face today."

Chambers, 2021

"They do not waste time on unnecessary activity, but focus on the client request and execute it."

Legal 500, 2021
High­lights of our ex­per­i­ence in En­ergy Dis­putes in the UK
A ma­jor oil and gas com­pany on a USD 250m ICC ar­bit­ra­tion con­cern­ing a North Afric­an pro­duc­tion shar­ing con­tract. The ar­bit­ra­tion is French-lan­guage with a Geneva seat.Twelve LNG and nat­ur­al gas price...
Law-Now: En­ergy Dis­putes
Vis­it Law-Now for leg­al know-how and com­ment­ary
Ad­vising the Board


CMS strengthens In­fra­struc­ture, Con­struc­tion and En­ergy Dis­putes team with...
In­ter­na­tion­al law firm CMS has ap­poin­ted Philip Nor­man as a Part­ner in the firm’s In­fra­struc­ture, Con­struc­tion and En­ergy (ICE) Dis­putes Team in Lon­don, with a fo­cus on the Middle East and Africa.Philip...
Six things land­lords need to know about min­im­um en­ergy ef­fi­ciency stand­ards...
In 2018, the gov­ern­ment in­tro­duced MEES to im­prove the en­ergy ef­fi­ciency of private ren­ted prop­erty. In this six-part series, we dis­cuss the im­pact the MEES Reg­u­la­tions will have on land­lords and ten­ants be­fore and after 1 April 2023, and the ac­tions land­lords should take as a res­ult.
Risk Es­sen­tials: Sea­son of Protest
Protests are every­where. There are protests on the streets and out­side busi­ness premises. There are protests on­line. Your work­force is protest­ing. Even lit­ig­a­tion is be­ing used as a means of protest...
Oil and Gas Dis­putes Sur­vey: 2021-22
We are de­lighted to present this year’s CMS Oil and Gas Dis­putes Sur­vey. Once again, we have reached out to a wide cross sec­tion of seni­or leg­al man­agers and seni­or in-house coun­sel rep­res­ent­ing key play­ers to get their views on the main drivers of dis­putes and dis­pute man­age­ment with­in the glob­al oil and gas in­dustry. As part of our in-depth sur­vey, we have also fo­cused on what leg­al ex­perts are do­ing to man­age the risk of con­flicts arising with­in their op­er­a­tions and to mit­ig­ate the pro­spect of dis­putes. The sur­vey rep­res­ents the views of over 50 in­dustry pro­fes­sion­als cov­er­ing all corners of the globe: Europe, the Middle East, Asia-Pa­cific, Africa, Lat­in Amer­ica, and North Amer­ica. We are grate­ful for their valu­able in­sights in­to how and where dis­putes arise and how they are man­aged in dif­fer­ent mar­kets across the in­dustry. Giv­en the mul­tiple in­ter­na­tion­al re­gions covered by our re­port, with their dif­fer­ent re­gimes and dif­fer­ing pri­or­it­ies and is­sues, it’s not sur­pris­ing to see a broad range of views be­ing con­veyed by the sur­vey par­ti­cipants. There are how­ever some com­mon areas of con­cern that re­spond­ents in all re­gions have high­lighted in terms of the im­pact they have on trig­ger­ing in­dustry dis­putes. These in­clude the po­ten­tial for sup­ply chain is­sues to lead to a dis­pute, a con­cern which will only have been heightened by Rus­sia’s in­va­sion of Ukraine.
Evol­u­tion not re­volu­tion: Cor­por­ate Re­spons­ib­il­ity and Cli­mate Change
Cli­mate change, sus­tain­ab­il­ity, and ESG are no longer niche areas of in­terest – they have be­come fun­da­ment­al to the way busi­nesses op­er­ate and im­pact the way we live our lives. Com­pan­ies face an im­port­ant...
In­ter­view with Jo­hanna Coelho, Leg­al Man­ager, Pet­roRio
What are the key risks that the in­dustry is fa­cing and where are you see­ing the most po­ten­tial for dis­putes? Today, I be­lieve that the main chal­lenge con­sists of align­ing the ne­ces­sary re­duc­tion of risks, costs and im­pacts of ex­ist­ing op­er­a­tions with the de­sir­able in­crease of pro­ductiv­ity and gen­er­a­tion of cash for new in­vest­ments. For the longer term, I think the main chal­lenge that all op­er­at­ors will face is how do you trans­form your hy­dro­car­bon busi­ness in­to something green­er. You can do this by just hav­ing an­oth­er port­fo­lio with oth­er en­er­gies or just by im­ple­ment­ing cer­tain changes in your own oil and gas as­sets. How do you see the force ma­jeure term be­ing ap­plied in the cur­rent cli­mate? What you don’t know is how a pan­dem­ic is viewed by the courts and by the ar­bit­ral tribunals. There’s a lot of jur­is­pru­dence re­gard­ing force ma­jeure clauses, but I think the new com­pon­ent here is the pan­dem­ic. I think that ar­bit­rat­ors and courts will have sym­pathy for the ones who are suf­fer­ing with a pan­dem­ic. Let’s see how they re­act. How li­ti­gi­ous or co­oper­at­ive is the in­dustry right now? I think the in­dustry it­self is quite li­ti­gi­ous, but I think that lit­ig­a­tion is ex­pens­ive. I think that parties are less will­ing, be­cause of the fin­an­cial crisis, to enter in­to pro­ceed­ings to solve prob­lems. I think they will pause and look at the be­ne­fit of hav­ing an ar­bit­ra­tion versus the cost of it, and what they’ll gain from it. You have to look at the long-term pro­spects.
Where do the dis­putes come from?
A col­lec­tion of inter-re­lated activ­it­ies and busi­ness re­la­tion­ships pose a con­sid­er­able chal­lenge to oil and gas in­dustry play­ers. Pro­jects and sup­ply chains are com­plex, while joint ven­tures can be tested by fin­an­cial con­straints and tight­er profit mar­gins.At the same time, oil and gas busi­nesses are at the fore­front of at­ten­tion from many host states and reg­u­lat­ors as a res­ult of (i) the cur­rent in­creas­ing fo­cus on ESG is­sues and en­vir­on­ment­al tar­gets and (ii) the need for the rel­ev­ant gov­ern­ment to use oil op­er­a­tions as a source of state rev­en­ue. In some re­gions, those chal­lenges are ac­com­pan­ied by loc­al con­tent laws and na­tion­al­ist­ic policies which add to the com­plex­ity. In a gen­er­ally harsh glob­al busi­ness en­vir­on­ment made worse by the COV­ID-19 pan­dem­ic, it is lo­gic­al, that in­dustry play­ers would be wary of dis­putes and their pos­sible con­sequences.
Geo­graphy: Com­plex en­vir­on­ments de­liv­er fin­an­cial re­wards but high­er risks
Risk pro­file, tech­nic­al and reg­u­lat­ory com­plex­ity and fin­an­cial con­straint nat­ur­ally all height­en the po­ten­tial for dis­putes. The CMS Oil and Gas Dis­putes Sur­vey sug­gests that two types of geo­graph­ic loc­a­tions bring with them an in­creased risk of dis­putes.First, ma­ture basins where: (i) ex­plor­a­tion and pro­duc­tion (E&P) is more tech­nic­ally chal­len­ging; (ii) pro­jects are fin­an­cially mar­gin­al com­pared to less ma­ture ‘mega fields’ with a long re­main­ing life; and (iii) there is a pro­lif­er­a­tion of me­di­um sized oil com­pan­ies with few­er re­la­tion­ships to main­tain else­where. These ma­ture basins are re­por­ted as hav­ing a great­er ca­pa­city to raise con­ten­tious clashes. United King­dom has the highest chance of en­ergy dis­putes arising There are likely many con­trib­ut­ing factors. The United King­dom Con­tin­ent­al Shelf (UKCS) is one of the three geo­graph­ic loc­a­tions that rep­res­ents the highest chance of a dis­pute arising, ac­cord­ing to The CMS Oil and Gas Dis­putes Sur­vey par­ti­cipants. A high pro­por­tion of re­spond­ents have op­er­a­tions in the UKCS re­gion and our data in­dic­ates that a sig­ni­fic­ant num­ber of these see it as high risk.As the mar­ket has ma­tured and with hy­dro­car­bon re­serves di­min­ish­ing in more ma­ture fields, op­er­at­ors have been forced in­to deep­er wa­ters where E&P is more tech­nic­ally com­plex and ex­pens­ive. If work­scopes re­quire to be ad­ap­ted be­cause pro­jects do not un­fold as an­ti­cip­ated on the ground, cost over­runs can quickly be­come a real con­cern and the chance of a dis­pute height­ens, both with con­tract­ors try­ing to work to tight budgets and co-ven­tur­ers re­quired to fund what may be cut­ting edge or mar­gin­al pro­jects.The pro­file of as­set own­er­ship in the UKCS has also changed over time. The UKCS re­gion is now in­hab­ited, in part, by smal­ler and me­di­um sized in­de­pend­ent play­ers look­ing to de­vel­op and max­im­ise re­cov­ery from smal­ler or ma­ture in­terests. These oil com­pan­ies are of­ten are fin­anced and struc­tured in a way that is very dif­fer­ent from the su­per-ma­jors that tra­di­tion­ally dom­in­ated the UKCS.
Oil and Gas Dis­putes Sur­vey: Man­aging dis­putes risk – the in-house per­spect­ive
The CMS Oil and Gas Dis­putes Sur­vey ex­amined the key drivers of dis­putes and dis­pute man­age­ment in the oil and gas in­dustry, and how sec­tor par­ti­cipants are mov­ing to­wards new ap­proaches to min­im­ise con­flicts and dis­putes. Based on more than 50 re­sponses from seni­or leg­al man­agers and seni­or in-house coun­sel in the oil and gas in­dustry across Europe, the Middle East, Asia Pa­cific, Africa and Lat­in Amer­ica, it provides in­ter­est­ing in­sights in­to how dis­putes arise and are man­aged around the globe.Even be­fore the on­set of the COV­ID-19 pan­dem­ic, the oil and gas in­dustry was fa­cing con­sid­er­able chal­lenges, not least a pro­longed peri­od of re­l­at­ively low oil prices and a glob­al fo­cus on lower­ing car­bon emis­sions and “green” en­ergy.Com­pared with the heights of 2008, pri­or to the glob­al fin­an­cial crisis, when in­ter­na­tion­al oil prices peaked at over US$140 a bar­rel, the US$55 bar­rel price for Brent Crude in late Janu­ary 2021 still looked re­l­at­ively low, des­pite the re­cent par­tial re­cov­ery. Those weak prices con­tin­ue to place con­sid­er­able pres­sures on in­dustry play­ers that are now of­ten op­er­at­ing on his­tor­ic­ally low mar­gins of prof­it­ab­il­ity.It was not al­ways this way. As ver­tic­ally in­teg­rated gi­ants, oil and gas ma­jors were tra­di­tion­ally con­sidered well able to ab­sorb down­sides with­in a broad port­fo­lio of rev­en­ues and part­ner­ships, but today many in­dustry play­ers no longer have that lux­ury. A num­ber of geo­graph­ic mar­kets that were pre­vi­ously dom­in­ated by a few large up­stream oil com­pan­ies have transitioned through di­vest­ments to own­er­ship by a lar­ger group of smal­ler in­de­pend­ent play­ers with more fo­cused port­fo­li­os and a range of fin­an­cial mod­els. With more op­er­at­ors and par­ti­cipants in many oil and gas geo­graph­ic mar­kets, it seems likely that the op­por­tun­it­ies for dis­putes are in­creas­ing. CMS Oil and Gas Dis­putes Sur­vey in­dic­ates that more could be done to pre­vent and mit­ig­ate against ex­pens­ive time-con­sum­ing dis­putes.
Rid­ing out the storm
Al­though an­oth­er su­per-cycle can nev­er be dis­coun­ted in the oil in­dustry, mar­ket ana­lysts cur­rently con­sider it un­likely that the oil and gas in­dustry will ever ex­per­i­ence the con­di­tions that im­me­di­ately pre­ceded the 2008 fin­an­cial crisis.In that peri­od, busi­nesses were able to gen­er­ate sig­ni­fic­ant profits thanks to skyrock­et­ing oil prices and sig­ni­fic­ant glob­al de­mand. As the green eco­nomy gains fur­ther trac­tion, buoyed by polit­ic­al and so­ci­et­al sup­port, in­ev­it­ably oil and gas play­ers will face chal­lenges. It will not al­ways be easy to pre­serve cor­di­al re­la­tion­ships with joint ven­ture part­ners, con­tract­ors, sup­ply chains and host states.Where ten­sions build, it will be es­sen­tial to have the right meth­ods in place to mol­li­fy fric­tion and un­ease.
In­ter­view with Sandra Red­ding, Gen­er­al Coun­sel, Sead­rill
Where are you see­ing the most po­ten­tial for dis­putes?  Whenev­er we see mac­roe­co­nom­ic fin­an­cial chal­lenges in the in­dustry, we see chan­ging pri­or­it­ies for all play­ers, and that leads to a de­sire to find flex­ib­il­ity in ex­ist­ing com­mit­ments, to move in dif­fer­ent dir­ec­tions. Nat­ur­ally that can see an in­crease in dis­putes com­ing through the sup­ply chain, and for long term sup­ply re­la­tion­ships. We see chal­lenges com­ing through an in­creas­ing fo­cus on loc­al con­tent, en­vir­on­ment­al and is­sues arising from in­ter­na­tion­al la­bour mo­bil­ity due to changes in la­bour laws glob­ally. Where do you see the biggest po­ten­tial for dis­putes geo­graph­ic­ally?  We are see­ing op­er­a­tion­al in­ter­rup­tion evenly dis­trib­uted across the globe as we move through the pan­dem­ic. That has been a great lev­el­ler this past year in terms of com­mer­cial dis­putes. Cer­tain so­cial and polit­ic­al pres­sures have over the past sev­er­al years put pres­sure on loc­al con­tent policies in al­most every con­tin­ent. And we’re see­ing ten­sions com­ing through the matur­ing of em­ploy­ment law in cer­tain la­bour mar­kets. As Gen­er­al Coun­sel, where have you felt the most pres­sure dur­ing the COV­ID crisis?  Ini­tially it was the re­lent­less pace of it all, need­ing to solve very new chal­lenges sim­ul­tan­eously, in terms of work­ing loc­a­tions, mov­ing people around in­ter­na­tion­ally, con­tract im­plic­a­tions. As the pan­dem­ic draws out, we are see­ing more fun­da­ment­al im­pacts; per­man­ently changed work­ing meth­ods, loc­a­tions and struc­tures. Which brings op­por­tun­it­ies to re­spond more cre­at­ively in the longer term to the lower de­mand that we are see­ing across the in­dustry through 2021, and po­ten­tially bey­ond. Which activ­it­ies are most likely to lead to dis­putes right now?  Op­er­a­tion­al delay due to COV­ID and force ma­jeure is a really hot is­sue. Move­ment of goods and people across bor­ders and to off­shore loc­a­tions con­tin­ues to be very chal­len­ging.  How are in-house teams typ­ic­ally start­ing to use tech­no­logy?  The use of AI and auto­ma­tion in our sup­ply chain and com­mer­cial agree­ments has huge po­ten­tial to help us man­age risk through stand­ard­isa­tion and great­er align­ment between suites of pro­ject agree­ments across our en­ter­prise. It is the key to cost and time ef­fi­ciency in con­tract­ing. It’s much easi­er for us to run stats on our agree­ments to in­crease con­sist­ency of con­tent, and be able to mon­it­or key met­rics. As an off­shore drilling com­pany, we are hugely ad­ept at de­vel­op­ing and us­ing in­nov­at­ive tech­no­logy. That shouldn’t stop when it comes to our on­shore busi­ness. What in­volve­ment do you typ­ic­ally seek from ex­tern­al coun­sel and in what cir­cum­stances would you look to bring them in?  No mat­ter the cal­ibre of a strong in-house team like Sead­rill’s, in­ter­na­tion­al busi­nesses like ours will al­ways look for qual­ity spe­cial­ist jur­is­dic­tion­al know­ledge. Hav­ing the in­ter­na­tion­al um­brella of ex­tern­al firms, help­ing us ac­cess and man­age loc­al con­tent in emer­ging jur­is­dic­tions and chal­len­ging jur­is­dic­tions, is hugely valu­able. In areas like com­plex dis­pute man­age­ment, law firms are be­com­ing real spe­cial­ists in their abil­ity to handle and pro­cess the volumes of data in­volved and of­fer a more joined-up ser­vice to get all the way through to res­ol­u­tion.
Risk mit­ig­a­tion: lim­it­ing the fal­lout
Even if the oil and gas in­dustry faces more risk and is prone to more ten­sions, clashes and dis­agree­ments, it does have the means of tack­ling these con­cerns.Over 91% of The CMS Oil and Gas Dis­putes Sur­vey re­spond­ents in­dic­ated that there is room for im­prove­ment in man­aging dis­pute-re­lated risks. Just as the in­dustry is evolving and shift­ing ac­cord­ing to eco­nom­ic, geo­pol­it­ic­al and so­cial changes, so too are the means of ad­dress­ing risks and min­im­ising the chances of dis­agree­ments.