Oil and Gas Trading
A Practical Guide
This new guide to oil and gas trading aims to fill a gap not currently supplied by other reference books on sale-of-goods law and charters by focusing on the day-to-day realities of trading in the sector. It examines the way in which the oil and gas market operates in practice, taking note of real-life situations that can arise.
Featured chapters are written by expert professionals who have hands-on experience of working in the oil and gas market and who can therefore describe to readers the issues to watch out for. Topics covered include international oil and gas trading contracts, trade finance, hedging, insurance, delivery, carriage, damages and even the effect of international oil and gas sanctions. Indeed, the guide contains a succinct account of all the main legal and practical areas that are relevant to trading in the sector.
The publication will be of relevance and interest to all those involved in oil and gas trading.
Table of Contents
|Table of Contents||3|
|Formation and conclusion of international oil and gas trading contracts||7|
|Main features of contracts for the sale of crude oil and refined products including LPG||23|
|Delivery and nominations||49|
|Quality and quantity determination||77|
|Practical aspects of quantity and quality determination in relation to shortage and contamination claims||87|
|Bills of lading||113|
|Oil cargo insurance||155|
|Hedging and derivatives||179|
|Joint selling and competition law||211|
|About the authors||251|
The book combines a thoroughly comprehensive study of current issues and it is very useful to have such an overview of oil and gas in one place; supplying also the audience, not just with the fundamental principles of the legal framework of transactions, but with cases, commentary, practical conclusions and recommendations. Review published in International Energy Law Review
Dr Panos K Pouliasis
Cass Business School
Partner, Holman Fenwick Willan, Singapore
Paul acts for clients in the maritime, offshore and commodity sectors (mainly oil and gas). He specialises in all aspects of shipping, transport and insurance, down and midstream oil and gas transactions, ship building and repair disputes, advising shipyards and buyers on contracts for the construction of various offshore structures (rigs/FPSO), as well as their utilisation offshore. He has particular expertise in relation to longand short-term contracts for the supply, transportation, sale and purchase, and storage of petroleum products and LNG. He advises on commercial transactions and shipping projects. Paul has worked in the London, Shanghai, Hong Kong and Singapore (which he founded) offices of Holman Fenwick Willan, and is presently head of the Singapore office with particular responsibility for offshore and energy. He has been appointed by the Singapore Mediation Centre as one of their associate mediators.
Manager, Bulk Liquid Survey Department, Minton, Treharne & Davies Ltd
Mike Birchall is a former tanker deck officer and cargo inspection manager and is now manager of the bulk liquid cargo survey department at Minton, Treharne & Davies Ltd (MTD). He also specialises in the technical investigation of claims and disputes relating to bulk liquids and gases, with particular experience in terminal and tanker operations, marine cargo surveys, and shortage investigations. He has conducted surveys on over 2,000 vessels worldwide and has provided technical advice on numerous mitigation operations involving complex reprocessing and/or blending operations on board tankers and in terminals. He frequently acts as an expert witness in legal disputes concerning such matters. He is the author of courses concerning many aspects of the marine shipment of oils, gases and chemicals, and has provided advice to a number of technical committees concerning the measurement and sampling of bulk liquids in terminals and on board tankers.
Partner, Sullivan & Worcester UK LLP
Simon Cook is a partner in the Trade & Export Finance Group in the London office of Sullivan & Worcester UK LLP. He has experience in a wide variety of banking and finance transactions, including, in particular, structured trade finance, trade finance, project finance, invoice discounting facilities and borrowing-base facilities in Africa, the Middle East, Asia and the CIS. His work in the structured trade area covers a range of financings acting for both lenders and borrowers, notably in the oil, telecommunications, soft commodities and metals sectors, with particular experience in Africa and the Middle East. He has worked and travelled extensively in Africa and the Middle East, having spent over three and a half years in Dubai. He has also participated in a number of structured trade finance and project finance conferences and seminars throughout Europe, the Middle East and Africa.
Senior associate, Ince & Co LLP
Jane is a trade and shipping specialist. She advises companies that trade, finance and transport commodities, shipowners, operators and charterers on a range of contentious and noncontentions matters.
Jane’s expertise includes all aspects of physical commodity trading across a broad range of commodities. She advises her trader clients in relation to international sale and purchase, documentary credits, shipping/transportation arrangements, delivery terms and commodity finance. In particular she has crude and oil products, coal (including ScoTA), gas, LNG, grain and metals experience.
In addition to litigation in the English Courts and cross-border arbitration under all of the major international rules, Jane acts for trader clients in relation to industry specific institutional arbitration rules such as LME, GAFTA and FOSFA. Jane also regularly advises her trader clients on the noncontentious aspects of commodity transactions.
Senior associate, Ince & Co LLP, Singapore
Cheryl Guan is a Senior Associate with the Singapore office of Ince & Co LLP and specialises in corporate insurance. She advises regional and international insurer and broker clients on a range of insurance mandates across multiple lines, including marine, aviation, financial lines and casualty matters. Cheryl has extensive dispute resolution experience in contentious work, ranging from litigation to mediation and arbitration, in respect of both defence and coverage work. She also advises on noncontentious matters, including policy wordings, underwriting agreements, regulatory matters, claims management agreements and other insurance-related commercial agreements.
Barrister and Arbitrator, 39 Essex Chambers
Denys Hickey is a barrister with 39 Essex Chambers in London, Singapore and Kuala Lumpur. He was for many years a partner with Ince & Co in London and Singapore, and has extensive experience in Asia. His work has covered all aspects of oil and gas trading, including shipping, trading, finance and competition law. He has litigated and arbitrated on behalf of oil majors, national oil companies and some of the biggest independent traders for well over 30 years, and has advised on general terms and conditions for all types of trading contract.
CEO, CJH Energy Limited
Catherine Jago has over 30 years’ experience in the commercial side of the oil industry and has worked for and with many major and private companies, including BP, ICIS-LOR, Poten, Ecopetrol, Sasol, Sonangol and KPC. She has been an oil trader, price reporter, pricing analyst, management consultant, oil broker, price forecaster and oil journalist. She has given expert advice in over 100 cases involving crude oil and oil products, many of which have required an analysis of hedging strategies undertaken and the creation of hedging models. As well as offering consultancy and expert witness services in the field of oil trading, pricing, hedging and shipping matters, she acts as an arbitrator in these and in closely related fields, such as commodity trading and hedging.
Associate, Sullivan & Worcester UK LLP
Anna Koshy is an associate in Sullivan & Worcester UK LLP’s London office. Her practice area is banking and finance, with an emphasis on trade and export finance. She has advised a number of leading international financial institutions on a range of cross-border deals, including a variety of commodities from oil and gas to metals to agricultural products, high value pre-export finance transactions, supply chain finance, commodity repurchase transactions and risk participations. She has also advised on matters involving various trade finance instruments, as well as regulatory issues currently affecting trade finance practitioners. She was a contributor to A Practitioner’s Guide to Trade and Commodity Finance (2012).
Partner, Peters & Peters Solicitors LLP
Hannah Laming is a partner in the Business Crime department of Peters & Peters Solicitors LLP, having previously been called to the Bar of England & Wales in 2001 and having acted both as an SFO prosecutor and as a member of the FSA’s Wholesale Enforcement Division. She advises on criminal and regulatory matters, including economic sanctions and export controls, serious fraud, corruption, private prosecutions, internal investigations and contentious FCA issues. She has assisted individuals subject to UK, EU and/or OFAC sanctions; and regularly advises corporations about the impact of sanctions and export controls on their business in the UK and overseas; the development of appropriate policies, procedures and controls to mitigate sanctions risks; due diligence and the investigation and remediation of breaches of sanctions. She regularly speaks and writes on topics relating to international trade compliance, sanctions and export controls and was recently named as one of the world’s top 100 female investigative lawyers.
Managing director, Minton, Treharne & Davies Ltd
John Minton is a graduate chemical engineer and is the managing director of the Minton, Treharne & Davies Group of companies (MTD), located in the UK, USA, Singapore, Australia and the Netherlands. He has forty years’ experience of the technical handling of well over 4,000 refining quantity and quality claims arising from the international trade in and shipment of petroleum and petro-chemicals. His duties have included determining causation and responsibility as well as advising on mitigation (where he has developed innovative solutions). He also acts as an expert witness in related legal disputes. He has frequently advised the London insurance market on the wording of bulk oil insurance policies and has served as a member of a British Standards Institute Petroleum Technical Committee concerned with bulk petroleum measurement. In that capacity he was the UK-appointed expert to two International Standards Organisation committees dealing with such issues.
Manager, Bulk Liquid Quality Department,
Minton, Treharne & Davies Ltd
Richard Minton is the manager of the bulk liquid cargo quality claims department at Minton, Treharne & Davies Ltd (MTD). He holds a Master’s degree in Chemistry from the University of Oxford and specialises in the technical investigation of claims and disputes relating to bulk liquids, with particular experience in petroleum, petrochemical, vegetable oil and biofuel cargoes, bunker disputes, onshore power generation fuel issues and the application of forensic analytical methodologies to suspected contamination incidents. He is experienced in providing advice and recommendations concerning mitigation. He is a frequent presenter at industry seminars and is a member of a number of technical committees relating to the storage, carriage and handling of petroleum, petrochemical and biofuel cargoes.
Partner, Peters & Peters Solicitors LLP
Jasvinder Nakhwal is a partner with Peters & Peters Solicitors LLP in London. She has in-depth experience advising corporate and individual clients on white-collar crime and related extradition, INTERPOL and mutual legal assistance treaty matters. She is recognised as a leading expert on the law of criminal cartels and is ranked in the top tier for cartel investigations in the Chambers UK 2016 legal directory. Her experience in this field includes acting for two British Airways executives who were acquitted of allegations of price-fixing with Virgin Atlantic Airways and representing the managing director of Dunlop Oil and Marine, the first person to be charged with the criminal cartel offence in the UK. She is a contributing author to The Law of Criminal Cartels (2009, OUP).
Barrister, 39 Essex Street
Ben Olbourne is an English barrister specialising in international commercial disputes across a range of sectors, including international trade and commodities, energy, natural resources, construction and shipping. He has extensive experience of upstream and downstream oil and gas disputes. He has appeared as counsel before courts at all levels in England and in arbitrations subject to different governing laws and under all of the leading arbitral rules. Since 2012, he has practised principally from Maxwell Chambers in Singapore. As an arbitrator, he is a Fellow of the Chartered Institute of Arbitrators and is presently or has recently been appointed in arbitrations under the ICC, LCIA, SIAC, LMAA and other rules.
He is recommended in the leading UK and regional directories for commodities (Legal 500 UK, 2013–2015), international arbitration (Chambers & Partners Global and Asia-Pacific Guides 2014–2016, Legal 500 Asia-Pacific 2016), energy (Legal 500 Asia-Pacific 2016), and shipping (Legal 500 Asia-Pacific 2016).
Partner, Rodyk & Davidson LLP
Iain Sharp is an English-qualified solicitor who trained in London (including a six-month seat inhouse at Shell International). He is a partner in Rodyk & Davidson’s Litigation & International Arbitration Group. He has previously worked in London, Hong Kong and Singapore since 2010. His sector experience includes international trade and commodities, energy and natural resources (including oil and gas); shipping, aerospace and defence; and banking and finance.
He regularly advises clients on contracts, sale and purchase/off-take agreements, general trading terms and conditions, joint venture agreements, agency/distribution, charterparties, economic sanctions, operational and legal risk management, trade finance and letters of credit. He also conducts international arbitrations under institutional rules, including the ICC, LCIA, HKIAC, SIAC and Swiss Rules, as well as under trade association rules, including the LME, GAFTA, FOSFA and PORAM.
Partner, Ince & Co LLP
Stuart Shepherd joined Ince & Co in London as a trainee in 1982. He became a partner in the firm in 1990 and is now Global Head of Trade. He has specialised in shipping and commodity trading throughout his career, acting for traders in various industries, from oil and gas to commodities traded on GAFTA and FOSFA terms. He is recommended by a number of legal directories, including Chambers and Partners and the Legal 500.
Partner, Ince & Co LLP, Singapore
John Simpson is a partner in the Singapore office of Ince & Co LLP, specialising in shipping, energy and international trade. He advises clients on charterparties, bills of lading, hedging transactions, FFAs and shipping derivatives. He also advises on the negotiation and drafting of construction and asset employment contracts relating to oil and gas services and associated disputes, and on contracts and disputes in relation to the trade of oil, bulk cargoes (including coal and iron ore) and LME metals. He acts for a diverse portfolio of clients including multinational metals and petroleum companies, major contractors to energy companies, P&I Clubs, shipowners and builders, charterers, international insurers and reinsurers and global banks operating in the Asia Pacific, East and West Africa and India. He has extensive experience of arbitration in Singapore (SIAC, SCMA, UNCITRAL and ad hoc), London (LMAA, LCIA, ICC and ad hoc), Kuala Lumpur (KLRCA) and Indonesia (BANI), as well as litigation in the English High Court.
Partner, Peters & Peters Solicitors LLP
Jonathan Tickner is a leading litigator, specialising in large and complex commercial cases including competition disputes, civil fraud, asset tracing and investigations. He has extensive experience dealing with international cases involving multijurisdictional emergency procedures. He has noted expertise in competition disputes, including stand-alone and follow-on private enforcement actions (eg, Legal 500 UK 2015).
Barrister, Monkton Chambers
Philip Woolfe was called to the Bar in 2004 and has practised at Monckton Chambers since 2006.
He is ranked by Chambers UK as a leading junior in the fields of competition law and telecommunications. He has acted in numerous competition regulatory investigations and damages actions, including most recently in relation to electricity and gas distribution, financial markets and pharmaceuticals. He is a contributing author to Bellamy & Child, European Union Law of Competition (7th Edition, 2013, OUP). He was a Fellow of All Souls College, University of Oxford from 2003 to 2010. He is a committee member of COMBAR and a member of the Competition Law Association, the Bar European Group and the Procurement Lawyers’ Association.
Criminal Barrister, 23 Essex Street Chambers
Dr Rebecca Wright is a criminal barrister who completed a secondment with Peters & Peters Solicitors LLP in London from January to July 2015. She previously worked as an associate for Latham & Watkins LLP in Qatar, focusing principally on oil and gas matters. In addition, she spent a number of years working as an international human rights lawyer in the Middle East and Afghanistan. She has a JD from Harvard and Berkeley law schools and a DPhil from the University of Oxford.