An Introduction to Oil & Gas Sales and Trading

Produced in partnership with Matthew Stott of Orrick, Herrington & Sutcliffe and Rebecca Downes of Orrick, Herrington & Sutcliffe

Practice notes

An Introduction to Oil & Gas Sales and Trading

Produced in partnership with Matthew Stott of Orrick, Herrington & Sutcliffe and Rebecca Downes of Orrick, Herrington & Sutcliffe

Practice notes

Governments permit companies to explore for and produce Hydrocarbons (crude oil and natural gas) within a defined area under the terms of a concession. The concession holders will typically seek to define their respective rights and obligations concerning their operations and activities under the concession by entering into a joint operating Agreement (JOA). If the exploration, appraisal, development and production operations of the concession holders are successful, then crude oil and natural gas will be produced. For more information on JOAs and concession agreements, see Practice Notes: The purpose and the principles of the joint operating agreement and Understanding upstream petroleum agreements—concessions, production sharing contracts and service contracts

Physical v Non-physical (or Virtual) Sales and Trading

A JOA will usually expressly exclude the marketing and sale of hydrocarbons from its scope. Each concession holder will typically need to enter into separate arrangements to monetise its entitlement to the hydrocarbons produced and lifted from the concession area. These types of sales arrangements

Matthew Stott

Orrick, Herrington & Sutcliffe

Matthew's practice focuses on commodity and equity derivatives trading (in UK, European and international markets), the development and operation of international energy and infrastructure projects (renewable and conventional power assets; a broad range of infrastructure assets with a current focus on fibre-optic broadband rollout in Europe) and M&A in the European energy markets. Matthew has spent time in-house in a global investment bank as a seconded adviser to the derivatives trading group, in a major international utility company as a seconded adviser to the energy optimisation and trading business (based in Paris) and in a major LNG and natural gas trading company leading the legal derivatives team.

Rebecca Downes

Orrick, Herrington & Sutcliffe

Rebecca focuses her practice on oil and gas, advising a broad range of clients on a variety of transactional matters across key areas of the oil and gas value chain, including upstream (conventional and unconventional resources), midstream, LNG and oilfield services. She has a particular focus on gas and LNG sales and trading arrangements, upstream acquisitions, project development activities, gas storage, concessions, joint venture arrangements and royalty agreements. She regularly represents international oil companies, independent exploration and production companies and state-owned entities, among others.

Jurisdiction(s):

United Kingdom

Key definition:

Hydrocarbons definition

What does Hydrocarbons mean?

[means a class of organic chemical compounds predominantly consisting of hydrogen and carbon, which includes fossil fuels such as coal, crude oil and natural gas. OR means an organic compound consisting entirely of hydrogen and carbon, which includes crude oil and natural gas. OR means organic chemical compounds consisting of hydrogen and carbon, which are found in fossil fuels such as coal, crude oil and natural gas. OR means principally oil, gas and coal or other fuel source derived from an organic compound made up of hydrogen and carbon.]

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