industry wide masterdeed
DESCRIPTION
TRANSCRIPT
16th June, 20031
PPWG Industry Wide Master Deed
J.C. Skipper Asst. General Counsel, BP plc Upstream, UK
16th June, 20032
PILOT/PPWG – To Reduce Barriers to Licence Trading
PPWG Operators Final Report – Jan ’02
Commercial Code of Practice
Pre-emption under JOAs
Streamlined UKCS Transfer/Novation Process
Standard SPA & 20th Round JOA
16th June, 20033
Industry-wide Master Deed (‘IMD’) Creates new pre-emption regime for all existing UKCS
Operating Agreements Enables accelerated transfer and novation process by
power of attorney to UKOOA subsidiary (UKCS Administrator Ltd).
Execution service provided by LOGIC on behalf of UKCS Administrator Ltd.
Industry (> 20 UKOOA & NOF reps) & DTI engaged - completion May ’03 with sign up by 99% of Industry.
16th June, 20034
IMD – Pre-emption (‘PrE’)
New PrE arrangements add to and supplement provisions of existing JOAs
Do not apply to JOAs with PrE arrangements expressed : to apply to share sales or changes in control of Licensees; or to provide for calculation of compensating value in
something other than money (incl. License exchanges) Seller right to trigger optional 7 day PrE waiver request 30 day PrE right triggered by notice containing :
(i) 3rd party ID; (ii) effective date of proposed disposal; (iii) applicable cash
or cash equivalent; and (iv) any/all material conditions
16th June, 20035
Preliminary “Optional” Notice
Disposing Party decides to dispose of interest under
existing JOA
Free to dispose to the third party
Yes
Non-Disposing Parties have seven business days to elect to either reserve or waive pre-
emption rights under existing JOA
Pre-emption rights under existing JOA reserved by at least one of Non-Disposing Parties
Pre-emption rights under existing JOA reserved
All of the Non-Disposing Parties expressly waive
pre-emption rights under existing JOA
Pre-emption rights under existing JOA disapplied –
no need to go to Mandatory stage
Serve Notice on Non-Disposing Parties of such
intention?
Pre-emption rights under existing JOA deemed to be
reserved
No response from Non-Disposing Party within
seven business days
Go to Mandatory Stage (Stage 2)
No
Go straight to Mandatory Stage (Stage 2)
16th June, 20036
The “Mandatory” Stage
Non-Disposing Parties have 30 day period to exercise or waive rights of pre-emption under existing JOA
Mandatory Notice by Disposing Party to Non-Disposing Parties detailing main terms of proposed disposal
Agreement reached between Disposing Party and the third party as to the main terms of the proposed disposal
None of the Non-Disposing Parties exercises its rights of pre-emption under existing JOA within 30 days
Rights of pre-emption under existing JOA exercised by more than one Non-Disposing Party within the 30 days period
Rights of pre-emption under existing JOA exercised by only one Non-Disposing Party within the 30 days period
No pre-emption rights under existing JOA will apply to the proposed disposal
The Disposing Party shall transfer the relevant interest to the Non-Disposing Parties which exercised their pre-emption rights under existing JOA in the proportions in which their respective interests bear to the aggregate of their respective interests or as otherwise agreed
The Disposing Party shall transfer the whole of the relevant interest to the relevant Non-Disposing Party
Free to dispose to the third party
16th June, 20037
IMA – New Transfer Arrangements (‘NTAs’) NTAs add to and supplement provisions of existing
Petroleum Agreements (‘PAs’) Enable future transfer arrangements to be completed by
Seller, Buyer and Registration Agent(s) through formal Execution Deed (s)
Execution Deed(s) : ID relevant agreements and affirm due adherence to consent
& notice provisions Constitute release of Seller, assumption of Buyer & effect
transfers under PAs on behalf of other parties Provide for Seller liability on default
16th June, 20038
New Transfer Arrangements
Each RP consents or does not object
Disposing Participant (“DP”) serves Notice of Transfer on Remaining Participants (“RP”) together with draft Execution Documents (“ED”)
* Notice of transfer * Draft ED * Consent to transfer * Further information as required under Existing Transfer Arrangements * The above collectively will be the Relevant Information, (“RI”)
Action Documents
RP are not to unreasonably object to the intended transfer Does any RP reasonably object?
Yes * RP with objection to notify the DP with reasons as soon as reasonably practicable after receipt of RI * New Transfer Arrangements (“NTA”) not to apply to the intended transfer
* Consenting RPs complete and return the Consent to Transfer and the appropriate ED to the DP * DP to prepare Execution Documents in the agreed form *DP to submit ED to Administrator * DP to request Administrator to execute the ED * DP to send each RP a certified copy of the ED
* Execution Documents including schedule to the Execution Deed * ED to be in the form agreed with the RP * Certified copies of all consents to transfer and notices of transfer
Action Documents
Do EDs comply in all respects with the requirements of the New Transfer Arrangements? AND Are they in the agreed form?
No * Ensure compliance with New transfer Arrangements
1 Administrator as Attorney for the RP 2 Disposing Participant 3 Acquiring Person (“AP”)
1 Execution Documents executed by Administrator 2 Administrator returns ED after execution to DP 3 DP and AP execute ED
Parties Action
Maximum period of ten business days after the DP and AP enter into the ED
* DP notifies the Administrator and each RP of the entry into the ED by the DP and the AP
* DP to provide a certified copy of the duly executed and dated ED to the Administrator and the RPs
Action Documents
1 Formal assignment of Licences 2 Novation of Affected Petroleum Agreements other than Licences
Effect
16th June, 20039
Standard SPA & 20th Round JOA Pro-Forma Sale and Purchase Agreement and 20th Round
JOA now available for voluntary use on UKOOA & PILOT websites
Industry wide participation in formulating templates which borrow from arrangements current in the UKCS
Documents will be maintained/reviewed by a practitioners group reporting to the UKOOA Legal Sub Committee
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Standard SPA & 20th Round JOA (cont) Both documents provide useful starting points for a range
of issues and contain a number of [square bracketed] alternatives
20th Round JOA contains 180+ pages and various clauses special clauses
SPA provides a number of hints for practitioners keen to reach alacrity in closure
16th June, 200311
Conclusion
When combined with other PPWG initiatives, the changes contained in the IMD, should: materially reduce transaction times; and reduce many of the frustrations experienced by existing and
new UKCS entrants Application of the pro forma SPA & 20th Round JOA - a
useful starting point which highlights issues for negotiation
Practitioners have already begun to grasp the tools now provided
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The UK Oil/Gas Industry Collaborative Solution Provider
16th June, 200313
What is LOGIC?
Independent industry organisation with initial funding from 5 Trade Associations & UK Government
Board of 12 Directors most represent Trade Associations, Government etc
Full time staff - 1 to 17 in 3 years Many pan-industry groups (15 - 25 each) SCM ‘Centre of Excellence’
“LOGIC aims to help the industry embrace industry-wide co-operation, new ways of working and contracting, supply chain improvements, and greater utilisation of innovative technology”
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LOGIC’s Mission“Helping the (UK) Oil & Gas Industry to work together to get things done”
• Co-operation Projects
• Business improvement Consultancy
• e-Business Advice & MSP
• ‘Independent’ Industry Facilitation
• Events
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Co-operation Projects
Marine Logistics UTR agreed 2001 (> £350k savings in 2001)
Aviation Logistics AVMHH agreed 2002 (After 20 years!) Common safety standards (almost!) Heliseat.com - !
IMHH Launch 2002 managed by LOGIC Website
Standard Contracts Available on website 2002
Vantage POB Assists delivery of Step Change ‘Vision’ Development (£1.2m) managed by LOGIC System to be managed by LOGIC
UKCS Master Deed Launched 2003 Website
Would NOT have happened without
LOGIC Facilitation & support……….
Brownfield Benchmark Study – Phases 1 &
2 Showcases & Workshops
Satellite Accelerator 7 projects & solutions proposed
for all 5 have teams selected Latest Don
Innovative finance New equity partner Development team
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LOGIC Works with All Companies
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Contacts
Aberdeen AB23 8GXTelephone +44 1224 853420Email: [email protected]
www.logic-oil.comwww.masterdeed.com