| CNOOC's 20-year LNG purchase agreement with BG Group |
Value: N/A |
|
|---|---|---|
| China National Offshore Oil Corporation (CNOOC) has purchased 3.6 million tonnes per annum of LNG for a 20-year period from BG Group and has become a 10% equity investor in the BG Group's Queensland Curtis LNG facility. | ||
| Firm | Client | Role |
|
Herbert Smith |
CNOOC | International counsel |
|
Freehills |
CNOOC | Australia counsel |
|
Mallesons |
BG Group | Australia counsel |
CNOOC's in-house legal department headed by general counsel Zhao Liguo and the company's external counsels have had a busy month working on headline transactions. A week after the company announced its plan to take up a 50% stake in Argentina's Bridas for US$3.1bn, it entered into a 20-year LNG purchase agreement with Australia's BG Group – one of Australia's largest LNG contracts.
Herbert Smith was instructed to advise on this agreement. Its team was comprised of five partners in Hong Kong and London, advising on issues across energy & resources, banking & finance and dispute resolution. "This project is unique. It is the first coal seam gas to LNG deal in the world and also represents one of the largest volumes of LNG sold in one contract in Australia...The timeline for completing the numerous project documents has been a challenging one," said Anna Howell, the head of energy Asia at Herbert Smith, who led the Hong Kong energy team.
Herbert Smith has been involved in this project since the project development agreement stage. The firm was also one of the five international law firms representing CNOOC in its 2005 bid to acquire US's Unocal for US$18.4bn. The offer was eventually withdrawn due to political pressure in the US. In addition, Herbert Smith is reportedly acting for CNOOC in its latest endeavour to acquire a third of Tullow Oil PLC's oil assets in Uganda.
In terms of PRC legal advice and deal executions, CNOOC receives strong support from its renowned in-house legal team led by general counsel Zhao Liguo. Zhao previously told ALB that in complex transactions he would carefully establish an integrated legal team comprising competent in-house counsels who may be assisted by external counsels, and he would supervise and oversee the progress and direct the team to solve some significant legal issues.
"If foreign law requires it, we would prefer to obtain legal opinions from international firms with careful supervision and review by our in-house counsels. To some extent, the role of such international firms is supposed to expressly put forward all reminders of potential legal risks under underlying foreign law, on the basis of good understanding of and communication with their clients," said Zhao.
"When selecting external counsels, we will look through and pay more attention to the personal achievements/credentials of those members to render legal services to us but not the overall experiences/credentials of those candidate law firms. Frankly, we would certainly hope to get a reasonable quotation and hourly rate as well," he added.
Mallesons Stephen Jaques acted for BG Group in relation to the agreement. The team was led by M&A partner James Fahey. All of the agreements are conditional on Chinese, Queensland and Australian government approvals. ALB
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