Oil price volatility report

Global oil price volatility report Risks and opportunities in 2016 Practical steps for managing key legal issues

Contents Introduction

1 2 4 7 8

Survey overview and key findings

Global markets & trade

- Legal tips: doing business in Iran

Business strategy review

- Legal tips: M&A - buying oil & gas assets from insolvent companies Supply chain evolution - Legal tips: protecting yourself when your counterparty is in distress

13 14 17 18

Operations & project realities - Legal tips: dispute resolution

About the global survey

About Clyde & Co

Introduction

A series of geopolitical and market factors have driven volatility in the oil price and exerted enormous downward pressure on profitability across the sector. This has resulted in widespread job losses and significant cuts in current and future projects. Navigating this new operational landscape presents a variety of challenges – but also potential opportunities – for which businesses in the sector need to be well-prepared. The purpose of this report is to publish the results of our recent global survey of the oil & gas industry and to share with you our recommendations on what can be done from a legal perspective to meet the challenges presented by the prolonged low oil price. Our aimwas to: – – Determine what the global trends, challenges and concerns are in light of the low oil price and continuing financial pressures this is exerting at all levels – – Identify our ‘legal tips’ which will enable businesses to address decision making in a proactive rather than reactive manner – – Identify the positive business opportunities which have arisen as a result of the current market conditions Our survey was sent to a broad cross-section of senior in-house counsel, commercial and contracts managers and senior executives amongst others. Respondents ranged fromNOCs, IOCs and contractors to financiers and traders based in key oil & gas jurisdictions worldwide. Within this report, we take a practical look at how to deal with the key legal issues businesses are facing. In particular, we focus on opportunities for increased M&A activity; the potential for more disputes and litigation to occur; and the very real possibility of business distress becoming business failure. Whilst many of the report conclusions are not surprising, what we do wish to stress is that there is much that can be done now to take advantage of business opportunities, and to avoid many of the legal pitfalls which might arise as a result of the current market. Should you require any further information on the findings contained in this report, please do not hesitate to contact us. Oil & Gas Team Clyde & Co

David Leckie Partner, London T: +44 (0)20 7876 4758 E: david.leckie@clydeco.com

Philip Mace Partner, London T: +44 (0)20 7876 4208 E: philip.mace@clydeco.com

Survey overview and key findings

Confidence VS caution – – 81% describe their outlook as

concerned but 19% are optimistic about the future; of this, 50% of optimistic respondents were fromNOCs

Current and future projects on the line – – Reduced profitability/viability of E&P activities, together with lack of appetite for investment in new projects are the twin leading trends expected to affect oil & gas businesses in the coming year, by some margin (with 64% and 59% of respondents flagging these up as critical) – – However, the myriad of factors that respondents also said are coming into play highlights the scale of the challenges faced by the

Influence of OPEC remains a significant force in the market – – OPEC policy and the slowing of the Chinese economy are the most significant geopolitical factors affecting businesses (according to 74% and 50% of respondents), followed by the impact of sanctions in locations such as Iran (41%)

Key findings

industry – from the cost of transportation and storage to increasing regulation and compliance requirements

Responding to the new realities – – 78% say they are reacting cautiously or

reactively to market conditions whilst 22% are taking an aggressive or opportunistic approach – – Restructuring entire businesses or asset portfolios is the top priority – 32% identified this as their number one strategy going forward – – Almost half (41%) of IOCs outlined restructuring as a key priority in light of current market conditions, in comparison to 25% of those fromNOCs who listed the development of their downstream capabilities as their main focus

Price VS production – – 92% have seen the majority, or all, of their business affected by the collapse in oil prices. Despite this, half (49%) expect global oil production to remain steady, with just over a quarter (28%) expecting it to increase

Divestment & acquisition of assets

What form will M&A activity take? What assets will attract most attention?

A third of companies (31%) wish to shed underperforming assets over the next 12 months 32%

45% will be looking for strategic business growth or acquisition activities

88% expect upstream operations to see the most M&A activity

36% Multiple specific assets or parts of companies

17% Individual project or interest in a project

Company-wide activities or entire asset portfolios

Insolvencies & disputes on the horizon? – – Concerns over cancelled or broken agreements loom large, with 86% of respondents expecting this to be the main cause of claims and disputes over the next year – – JV partners, contractors or suppliers becoming insolvent or unable to fulfil their contractual obligations is also a key concern (81%), as are payment issues (67%)

86% Cancellingor breakingof agreements

81% Companies or suppliers becoming insolvent and unable to perform obligations

67% Payment issues

Global markets & trade

Industry drivers Established industry norms have changedwith supply outstripping demand. The balance of power between net oil exporting and importing nations, and between oil producers themselves across different regions, is shifting. The effects are being felt globally. The central role of OPEC in determining supply volumes, with its consequent effect on prices, is under intense scrutiny, as industry players continue to look to OPEC to resolvemarket tensions. While its global dominance may bewaning, OPEC policy is the singlemost important geo-political factor affecting oil & gas businesses today – according to nearly three quarters (74%) of respondents to our survey. It far outstripped the next most pressing concern – the slowing of the Chinese economy – which was flagged up by half (50%) of those surveyed. The lifting of Iranian sanctions also features highly on the list of industry preoccupations (41%). Iran has ambitious production targets and is eager to attract foreign investment. For IOCs, the appeal of Iran’s reserves are obvious – but the fiscal terms for investment will also need to be attractive and E&P companies will be evaluating political and country risk carefully. 74% OPEC policy 50% Slowing of Chinese economy 41% Impact of sanctions (such as Russia, Iran 1 ) What will be the most significant geopolitical trends affecting your business in 2016?

Impact on business The variety of market trends that are expected to affect oil & gas businesses in 2016 is extremely wide. Of these, reduced profitability/viability of E&P activities emerges as the primary concern for almost two-thirds (64%) of respondents, followed by risks posed by lack of appetite for investment in new projects (59%). Four in ten (41%) expect to be affected by the failure or insolvency of existing oil & gas or service companies. What market trends do you expect to affect your business most in 2016?* 41% Failure/insolvency of existing companies

64%

Reduced profitability/ viability of E&P activities Cost of transportation and distribution of oil & gas Demand for storage of oil & gas Divergence into other forms of energy Consolidation of E&P and service companies

9% 8%

21%

15%

Supply chain consolidation

10%

Increasing regulation and compliance requirements Reduction in subsidies or government concessions

Lack of appetite for investment in new projects

60%

Policy changes stemming from COP 21 Lack of appetite for investment in existing projects

35%

*Respondents were asked to select a maximum of three answers

1 The EU lifted all Iranian sanctions on 16 January 2016 (“Implementation Day”). This survey was conducted following this announcement in February 2016.

Business response Our research reveals that most companies (78%) are taking a cautious or reactive response to market changes. However, 22% are either prepared to, or are in a position to, adopt an aggressive or opportunistic stance. Restructuring of businesses or assets is considered key for industry players in light of current conditions – almost a third (32%) of respondents highlighted this as the one strategy they would drive as a priority. Streamlining operations, focussing on core business and dealing with unprofitable areas look vital. That said, market participants are set to pursue a multitude of other tactics, from focussing on smaller, less capital intensive projects, to entering new growth markets and

generating a more efficient supply chain. Tellingly, investing in shale energy did not feature on our respondents’ radar at all – a sharp reminder of the change in unconventional hydrocarbons’ fortunes. Given current market conditions, entry into newmarkets may be out of reach for many companies where budgets are tight and capex decisions are on hold. However, for a small minority of better-resourced, agile IOCs or NOCs, (as evidenced by 15% of our survey respondents) taking a pro-active approach to increasing penetration of growth markets nowmakes sense, to take advantage of cheaper assets or to fill gaps left by others as they retreat.

What one strategy would you drive as a priority in light of the current market conditions?

21% Focuson smallerand/or moreflexible capital-light projects

15% Entryinto newgrowth markets

10% Generating amore innovativeand efficientsupply chain

5% Investment inrenewable energy

5% Enhancement ordevelopment ofdownstream capabilities

5% Enhancement ordevelopment

1% Focusonfewer butlarger projectswith heavycapital

32% Restructuring ofthebusiness orassets

5% Other

ofupstream capabilities

Legal tips Doing business in Iran

The opening of the Iranian market presents an inviting and potentially lucrative opportunity for companies in the oil & gas sector. Potential investors should prepare and equip themselves for the challenges ahead. Set out below are some key considerations for entering this complex market: Beware of residual sanctions and plan accordingly – – Some sanctions remain in place. Certain Iranian entities remain EU and US designated, so enhanced due diligence on counterparties is required – – US persons (individuals or entities) are still excluded Assess corporate law issues – – Assess whether existing licences for operating in Iran are still valid. Are there are any outstanding tax or other financial liabilities from previous business activities to account for before renewing licences? – – If planning to expand, review whether your existing

business structure allows you to engage in new operations (eg under Iranian law, representative

from dealings with Iran – reconfigure internal structures/board decision-making if necessary

offices cannot participate in profit-making activities or receive Iran-sourced income). Take steps to obtain the necessary licences Act fast on IP – – Register your IP rights at the outset. If already registered, investigate whether any infringement has occurred in the interim and assess what enforcement action is required

– – Confirm that banking arrangements are available, as US banks are prohibited from clearing US dollar payments and non-US banks may refuse payments linked to Iranian trade – – Review insurance policies and financial covenants in loan documents to check for prohibitions – – Include provisions in contracts to deal with any future snap-back of sanctions Manage relationships appropriately – – Consider whether pre-sanctions relationships are still valid. Fresh due diligence may be necessary before resuming them – – If using a franchise or agency model with a new business partner, consider the consequences of terminating existing arrangements – – Resolve any dormant or pending disputes caused by terminating or suspending relationships when sanctions were introduced – or it could affect ability to obtain necessary approvals and permits

With 157,530 million barrels of crude oil reserves and natural gas reserves of 34,020 billion cubic/meters, it is estimated that the Iranian oil & gas industry will require USD 200 billion in investment over the next five years.

Business strategy review

Industry drivers Nine out of ten (92%) of those we surveyed said the slump in oil prices has affected the majority or the entirety of their business, and expectations of any significant price increase are muted. While 8% think the cost of Brent crude will go higher than USD 50 a barrel this year, most (87%) predict that it will remain low to moderate, at USD 30-USD 50. The majority of those surveyed expect production levels to be maintained (49%), with less than a quarter (23%) expecting output to decrease.

In 2016, do you expect global production in the oil sector to:

Do you predict that in 2016, the average oil price (Brent crude/barrel) will be:

Increase 28%

Higher than USD 50 8%

Between USD 30 - USD 50 87%

Remain steady 49%

Lower than USD 30 5%

Decrease 23%

In this case, producers will continue to face the challenge of sustaining production while staying in business if values stay depressed. Inevitably, for many businesses this means continued cost-cutting: reducing workforce numbers and cancelling or shelving projects as they look to become leaner and more efficient. If, however, prices do rebound, what then? Making too many cuts may in turn create new problems, leaving some businesses facing skills shortages and capacity constraints which could severely curtail their ability to capitalise on the recovery.

Impact on business Two-thirds (67%) of our survey respondents think that reducing headcount will be the most significant change in their businesses’ day-to-day operations over the next 12 months, as evidenced by recent announcements. Cancelling or putting on hold new projects is next on the list (55%), and existing projects are also at risk (41% think they will be frozen or cancelled). Half (50%) say there will be a change in their business processes to increase efficiency. Interestingly, our survey shows that the appetite for strategic business growth or acquisition opportunities is greater than the motivation to divest assets (45% compared to 31%). This suggests that many businesses are planning a tactical approach to invest in future growth at attractive prices, but some potential sellers may still be delaying disposal decisions.

What do you expect to be the most significant change in your day-to-day operations in the next 12months?*

67% Reduction in headcount or recruitment activities

55% Planned projects/ feasibility

50% Change in business processes for greater efficiency

45% Pursuit of strategic business growth or acquisition activities

41% Existing projects/ feasibility

38% Pursuit of specific new project opportunities

31% Divestment of assets

studies put on hold/cancelled

*Respondents were asked to select a maximum of three answers

Business response Changing business structures provide an excellent opportunity for businesses to address both employment issues and regulatory requirements, or changes which will be a priority for global businesses in the future. Focussing on the UK market for example, from April 2017 UK law will require gender pay reporting by larger companies (with 250+ employees) which will involve companies taking a snapshot of their gender pay statistics and reporting on this on a yearly basis. The restructuring process is a good time to audit pay practices and identify steps to redress

imbalances, dealing with any legal risks identified, resolving any pay gaps and working on adjustments to alleviate any unlawful gaps. Whether as part of a proactive strategy or due to financial necessity, an increase in M&A activity over the course of the coming year is inevitable. Understanding where this will be focussed will be key to helping businesses seize opportunities and also identify what shape business restructurings and asset disposals/acquisitions might take.

There is expected to be an increase inM&A activity over the course of 2016. Do you believe this will predominantly be: 1 + 99 +E 14 + 86 +E 32 + 68 +E 1% 14% 32% Other There will not be an increase in M&A activity in 2016 Focused on company- wide activities or the entire portfolio of assets 36 + 64 +E 36% Focused on multiple specific assets or parts of companies 17 + 83 +E 17% Focused on an individual project or interest in a project

Where do you expect the majority of M&A activities to occur in the industry?

88%

Upstream (exploration & production)

Midstream (transportation, storage, wholesale marketing)

Downstream (refining, processing, marketing & distribution)

Legal tips M&A – buying oil & gas assets from insolvent companies For companies with an appetite for strategic business growth rather than divestment, buying assets from insolvent companies is a particular avenue of opportunity. For example, in the current market, there may be opportunities to purchase oil & gas assets from companies that have not been able to survive the prolonged low oil price. Set out below are some key points to remember for purchasing assets from, in this example, an English administrator of a company:

– – Role of the administrator – an administrator has a general duty to act in the best interests of creditors as a whole, especially in any sale of a company’s business and assets, but in practice will be liaising heavily with any secured creditors – – First-mover advantage – insolvency practitioners often approach a range of potential purchasers and those buyers who are able to move quickly are at an advantage – – Due diligence – the business will have been through tough times so its records may not be in the best state – therefore access to information combined with the administrator’s lack of background knowledge may hinder buyer due diligence – – Risk allocation – a key difference to a normal sale is essentially that the buyer must either accept the risk or factor it into the price. Administrators will limit liability as much as possible and be keen to have cash which won’t be subject to future claims. The selling company is unlikely to give warranties or indemnities and any given are of limited value bearing in mind the financial state of the seller. The buyer will, therefore, be especially keen to ensure that assets are acquired free and clear of all security, claims, and encumbrances which means due diligence has an even more significant role to play if there is time available to carry it out

– – Consideration – the administrator will often elect to deal with whoever is in a position to give them the best cash deal up front, even if it is not the highest aggregate bid, particularly where subsequent payments are not guaranteed (eg if performance related). It is not unusual for the administrator to require, at an early stage in negotiations, evidence that the purchaser has the purchase price readily available – – Consideration – the desire of the administrator to complete a cash sale quickly combined with often limited time available for due diligence will oftenmean the final price is substantially lower as compared to an arms length solvent sale – – Title to PSC or Licence interests is key – but an administrator will transfer whatever right, title and interest is held by the selling company – so if it is subject to challenge or void that is what the buyer gets. This may be affected by the impact of the seller’s insolvency on the relevant agreement. If such agreements do remain intact post insolvency, they will need to be novated and/or assigned to the purchaser, normally with the consent of the government/regulatory body. PSC language on insolvency and termination rights is often vague and open to interpretation so it should be reviewed carefully

Supply chain evolution

Industry drivers A fifth (21%) of industry respondents expect consolidation of both E&P and service companies to have a major effect on their business in the coming year. Supply chain consolidation of oil & gas majors was highlighted by 15%. This compares to just 4% who foresee any perceptible impact from the divergence of oil & gas companies into other forms of energy, from shale to renewables. This has significant implications for contract arrangements, increasing the risk of disputes and insolvencies as businesses change and they re-evaluate not only their internal structures, but also their requirements from, and relationships with, suppliers.

Impact on business How confident can businesses be that they can rely on counterparties staying afloat and performing their obligations? Given that the oil & gas supply chain is built on an intricate network of inter-related supply agreements, JV partnerships and contractor relationships, this is a critical question for every segment of the industry. Growing demand for storage adds another link to the supply chain, increasing its complexity. With demand for storage surging as producers and buyers wait out the price rout, offshore tanker capacity is at a premium. Contango may gain further momentum if freight costs ease, making floating storage not just a necessity for excess oil stocks, but also an attractive trading position. Therefore, despite the inherent risks (operational, environmental, territorial, contractual) and spiralling charter costs, on- or off- shore storage remains an attractive option for many oil companies as they look for ways to protect profit margins. In addition, the drive towards cost-cutting in transportation and distribution is also causing pain in the downstream supply chain, with almost one in ten saying this issue is the most pressing trend for their business. Business response Managing these supplier/contractor relationships positively and pro-actively in a challenging and fast-changing environment is vital. Our research found that many businesses are taking a “wait and see” approach, with 42% saying they are closely monitoring supply chain activities to ensure they are aware of stress points. However, a third (32%) are renegotiating contracts and one fifth (21%) appear to be positioning themselves for such a move by running a careful eye over contractual performance and obligations. Identifying ways to protect yourself against default or collapse of a counterparty, while simultaneously ensuring that any actions taken do not jeopardise either their viability or your business, is essential.

What market trends do you expect to affect your business most in 2016?*

Cost of transportation and distribution of oil & gas Demand for storage of oil & gas Divergence into other forms of energy Consolidation of E&P and service companies

9% 8%

21%

15%

Supply chain consolidation

*Respondents were asked to select a maximum of three answers

Which statement best describes how you are managing your contractors or suppliers?

42% Closely monitoring activities of supply chain and aware of stress points

32% Renegotiating contracts

21% Pre-emptively reviewing contractual obligations and performance

5% No action as all necessary work has been done

Legal tips Protecting yourself when your counterparty is in distress As the financial pressure on oil & gas companies continues, the risk of insolvency in the industry is becoming increasingly acute. It is vital to be alive to the possible insolvency of co- venturers, suppliers and contractors in order to ensure your interests are protected. Set out below are some key points to remember when managing your relationships with counterparties in this environment: – – Act quickly! – virtually all methods of improving your position rely on you acting before your counterparty enters an insolvency process. Do not delay – – Trusts – if you are a Participant, make sure the Operator holds Joint Property on trust for all the Participants, and holds them (where possible) in jurisdictions that recognise trusts – – Retain title – if you are a Contractor that

– – Be prepared – you will get little formal notice of an insolvency process, so listen to market gossip and be prepared – – Check your insolvency triggers – many are out of date (administration, for instance, does not need to happen by a court order) or reference the wrong terms. For example, in England, the meaning of ‘bankruptcy’ is different than in America – – Check to see what the insolvency of your counterparty allows you to do – for instance, many standard form contracts do not envisage the insolvency of an Operator, and leave the Contractor without the contractual ability to terminate

supplies goods, retain title until all debts are paid. This way you can enable the purchaser/Operator to take possession of the goods, so that their business is not affected, but you will be in a much better

position if they become insolvent – – Ensure credit is secured – if your

counterparty is struggling and wants credit, consider obtaining guarantees, security or letters of credit – – Step-in rights – if you have a business critical supplier, and intend to use step-in rights in the event of insolvency, discuss internally how you would exercise those rights now. It is better to think through the issues and find solutions now, before you need to exercise the right

Operations & project realities

Would you describe your outlook for 2016 as... 19 + 81 + E 19% Optimistic

81 + 19 + E 81% Concerned

Industry drivers Is this just a rough patch or is the world of “Big Oil” changing forever? While the oil price may recover eventually, significant changes to business models and operational strategies are likely to result from the seismic impact of innovation on the sector, from the shale revolution to greater investment in renewables. The need for greater agility is clear. While over a fifth (21%) of our survey respondents say they will be focussing on smaller and/or more flexible capital-light projects as their number one strategy, virtually none (1%) thought they would instead focus on fewer but larger projects with heavy capital.

What one strategy would you drive as a priority in light of the current market conditions?

21% Focusonsmallerand/ ormoreflexiblecapital- lightprojects

10% Generatingamore innovativeand efficientsupplychain

5% Enhancement ordevelopment ofdownstream capabilities

5% Enhancementor developmentof upstreamcapabilities

1% Focus on fewer but larger projects with heavy capital

32% Restructuringofthe businessorassets

Impact on business If the squeeze on profitability continues, the widely expected increase in claims and disputes seems inevitable. As one of our survey respondents put it, keeping cash flow positive, deferring large investments and minimising operating costs is essential. Changes to operational arrangements as a result of cost-cutting, the shelving of planned projects and lack of investment in existing operations, could all have a major impact on relationships across the supply chain. According to our survey, the cancellation or breaking of agreements is expected to be the biggest cause of disputes for 86% of respondents, followed by companies or suppliers becoming insolvent and unable to fulfil their obligations (81%). Two-thirds (67%) think payment issues will be a major trigger for claims and a third (31%) see failure to perform obligations to the required standard or timeframe as a critical pressure point.

Business response Current attitudes to litigation/arbitration in the industry have changed significantly over the past 12 to 18 months. As a result of the financial pressures faced by the industry, companies are far more bullish than they used to be. There is, as a result, significantly more contentious correspondence between parties, some of which ultimately leads to the commencement of proceedings. Some of the most common flash points for disputes include non- payment of invoices, termination of contracts (purportedly for cause but in fact for convenience), declarations of force majeure and JV/PSA disputes. Clearly, any decision to commence proceedings must be carefully risk assessed by management and legal. The direct costs of litigation/arbitration are significant, not to mention the hidden costs of extensive management time, reputational issues etc. The stakes are high, particularly if the dispute is under English law where the loser will almost always be ordered to pay most of the winner’s legal costs. At the same time, companies are often faced with the stark choice of either having to write the amount in issue off/pay the sum demanded or litigate/arbitrate. In many situations the only way forward is to commence proceedings and then seek to resolve the dispute by way of alternative dispute resolution, such as mediation. A key issue to consider before commencing any proceedings is whether any judgment/ award can be enforced. In international disputes this is a very complex issue which needs to be addressed at the outset, to avoid pouring good money after bad.

There is expected to be an increase in claims anddisputes over the course of 2016. Do youbelieve this activitywill predominantly be the result of:*

Companies or suppliers becoming insolvent and unable to perform obligations

81%

86%

Cancelling or breaking of agreements

67%

Payment issues

Where do you expect the majority of disputes to arise?

Changes in regulations and non- conformance Failure to perform obligations to the required standard or timeframe

31%

Upstream (exploration and production) 83%

Midstream (transportation, storage, wholesale marketing) 13%

3% 4%

Employment claims

Downstream (refining, processing, marketing and distribution) 5%

Usual business operations

*Respondents were asked to select a maximum of three answers

Legal tips Dispute resolution

The financial pressures caused by the low oil price has led to a significant increase in the number of disputes in the industry, at all levels in the contractual chain. Set out below are some key points to to keep in mind when considering litigation/arbitration:

– – Pre contract – carry out extensive credit checks and, if possible, obtain security – – Be vigilant – keep a constant eye on unpaid invoices and the changing financial status of the debtor – – Keep careful records – document all phone calls and meetings and preserve all emails and documents – – Review contract termination provisions – in particular termination for cause – and follow the contractual notification process to the letter – – Don’t delay – consider the choice of law and dispute resolution clauses and escalate the dispute resolution process sooner rather than later – – ADR – make sure you closely follow any contractual alternative dispute resolution procedures before commencing litigation/arbitration – – Look carefully at enforcement before spending a lot of money on litigation/arbitration – there is nothing worse than a pyrrhic victory

– – If the counterparty is in serious financial difficulty, litigation/arbitration should be commenced as quickly as possible – it may be possible to obtain a judgment in default and enforce that (eg by a third party debt order or a charge over property or shares). Once enforcement is complete this may allow you to keep the recovery, as a secured creditor. However, if you do not complete enforcement before an insolvency process commences, you are usually part of the general body of unsecured creditors (and may make only a minimal recovery) – – Consider using expedited procedures within the relevant arbitration rules or rules of court – consider interim remedies, such as freezing of assets and security for costs – – Manage the litigation/arbitration carefully – through cost control and consideration of innovative litigation funding, such as third party finding or insurance backed products. Don’t throw good money after bad

About the global survey

We surveyed 1 a cross-section of the worldwide oil & gas industry in order to gauge sentiment, identify key business priorities and market drivers and uncover likely future trends in the sector. Our aimwas to provide greater insight into how businesses on the ground are dealing with the challenges presented by the low oil price. This report combines our findings with our oil & gas team’s own specialist industry knowledge and expertise. We hope that this report will assist companies in navigating this uncertain, volatile landscape.

Below we detail the profile of our survey respondents.

Organisation type

28%

Independent oil company (IOC)

10%

National oil company (NOC)/Government Oilfield service company Engineering/ construction company

18%

5% 5%

Shipping company

13%

Trader

Consultancy

Financial services

Other

1 The survey was published in February 2016 and we received responses from senior professionals working within the industry. For further information on the methodology of this survey, please contact energy@clydeco.com.

Position

Organisation size

Senior management Contracts or commercialmanager 46% 5% 13%

In-house counsel 30% 6% Business development

1 – 100 employees 22%

2001+ employees 47%

101 – 500 employees 17%

501 – 2000 employees 14%

Other

In what region are your primary operations based?*

Europe (other) 35%

Russia/CIS 25%

Europe (UKCS) 49%

North America 33%

Middle East 45%

Asia Pacific 51%

Africa 47%

South America 31%

*Respondents were asked to select as many that are relevant

About Clyde & Co

The Clyde & Co global oil & gas group consists of a core team of lawyers who devote their practices to the oil & gas industry, combining deep practice knowledge in their chosen disciplines, sector specialism and regional expertise. We have acted for leading players in the industry for over 25 years and have a wealth of expertise and experience across a range of transactional and contentious disciplines. Across the firmwe have both practice area expertise and breadth and depth of experience in the oil & gas sector in every major hydrocarbon producing area in the world. Our oil & gas teamwas recently described in Legal 500 as ‘superb’, with ‘excellent depth of specialisation’. Clyde & Co is a dynamic, rapidly expanding global law firm focused on providing a complete legal service to clients in our core sectors of energy, marine, aviation, infrastructure, international trade and insurance. As an international law firmwith over 1800 lawyers in 45 offices across six continents, our combination of sector expertise, commercial attitude and in-depth regional understanding provides a unique perspective. If you would like to discuss any of the issues raised within this report, please do not hesitate to contact our contributors:

David Leckie Partner, Disputes/HSE, London T: +44 (0)20 7876 4758 E: david.leckie@clydeco.com Philip Mace Partner, Corporate, London T: +44 (0)20 7876 4208 E: philip.mace@clydeco.com David Bennet Partner, Disputes, London T: +44 (0)20 7876 5482 E: david.bennet@clydeco.com Michael Wachtel Partner, Corporate, London T: +44 (0)20 7876 4216 E: michael.wachtel@clydeco.com Richard Devine Partner, Corporate, Dubai T: +971 4 384 4146 E: richard.devine@clydeco.com

Paul Dillon Partner, Disputes, London T: +44 (0)20 7876 4825 E: paul.dillon@clydeco.com Clare Hatcher Partner, Commercial, London T: +44 (0)20 7876 4863 E: clare.hatcher@clydeco.com Sandy Kemp Partner, Employment, Aberdeen T: +44 (0)1224 628 680 E: sandy.kemp@clydeco.com Marko Kraljevic Partner, Trade and Commodities, London T: +44 (0)20 7876 4871 E: marko.kraljevic@clydeco.com Stewart Perry Partner, Insolvency, London T: +44 (0)20 7876 4338 E: stewart.perry@clydeco.com

David Reynolds Partner, Disputes, London T: +44 (0)20 7876 4896

E: david.reynolds@clydeco.com Sandra Sinclair-Hughes Partner, Transportation Finance/LNG, London T: +44 (0)20 7876 4227 E: sandra.sinclair-hughes@clydeco.com Mark Walsh Partner, Disputes, London T: +44 (0)20 7876 5435 E: mark.walsh@clydeco.com Heidi Watson Partner, Employment, London T: +44 (0)20 7876 4480 E: heidi.watson@clydeco.com Lesley Gray Consultant, Disputes, Aberdeen T: +44 (0)1620 843 872 E: lesley.gray@clydeco.com

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Clyde & Co offices Associated offices

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For full office details please refer to the Clyde & Co website www.clydeco.com/locations/offices Asia Pacific Beijing Brisbane

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*Associated offices

Further advice should be taken before relying on the contents of this summary. For further information contact: energy@clydeco.com Clyde & Co LLP accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary. No part of this summary may be used, reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, reading or otherwise without the prior permission of Clyde & Co LLP. Clyde & Co LLP is a limited liability partnership registered in England and Wales. Authorised and regulated by the Solicitors

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CC009937 - April 2016

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