Energy & natural resources
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University: University of Edinburgh
The energy and natural resources sector is an important part of the legal landscape and is currently making more headlines than ever before. It covers, among other things, oil and gas projects, pipelines, refineries, liquefied natural gas, nuclear, renewables, and water and wastewater. Emerging energy initiatives such as biofuels and carbon capture and trading also feature. The key legal issues centre on the development and financing of projects, M&A, disputes and trading, and may be either domestic or international in scope.
It’s quite possible that while studying at the University of Edinburgh, Julia Derrick would have come across the work of romantic poet and all-round Scots hero Rabbie Burns. If so, she would be familiar with the idea that “the best-laid schemes o’ mice an’ men, Gang aft agley” (or ‘often go awry’, for readers south of the border). Indeed, her own plans for a career in finance moved away from the expected course when she realised that her skills were best suited to a different role.
“Throughout my education and university career, I always thought that I would eventually end up pursuing a career in finance,” she recalls. “In my third year at university, I applied for a number of internships at investment banks which involved various psychometric tests and all the feedback that I received was that verbal reasoning was a core strength. That process led me to re-evaluate my aspirations and encouraged me to identify a career that would allow me to leverage my core strengths. To me, law offered the complex, challenging, high-profile international work that had originally attracted me to finance, but was better suited to my skill set.”
Put to the test
To test out her theory, Julia applied for a vacation scheme at Ashurst and found that she thoroughly enjoyed her time there. Not only that, but she was offered a training contract on the back of her performance and never looked back; she is now a partner in the firm’s global energy team.
She decided to specialise in energy at the end of her training contract; although she had enjoyed all four seats, she found the sheer range involved in energy work intellectually engaging and the industry interesting. “It was a pretty tough decision,” she admits, “but my final seat as a trainee was spent working on transactions relating to the energy sector, and specifically the oil and gas sector. I really enjoyed the nature of the work and the legal disciplines I was required to use, and I found the subject matter fascinating.”
Julia describes her current workload as “very varied around common themes”. It is predominantly project or transaction based, helping clients either buy or sell rights to explore for or produce petroleum, set up joint ventures, develop infrastructure or simply buy or sell oil and gas. In addition, she can find herself involved in negotiations between counterparties, writing reports and guidance for clients, researching points of law, and providing regulatory advice on oil and gas supplies for the UK regime.
Trainees in Ashurst’s energy department are encouraged to be as hands on as possible, and to get as broad a range of experience in the different types of transaction which the department is handling. “The type of work trainees get involved in will really depend on the nature and size of the transaction,” Julia explains. “Current trainees in the team have worked on due diligence in relation to oil drilling in Africa, drafted contracts and attended meetings with clients on several North Sea asset acquisitions, as well as a major nuclear energy project, and helped to close an oil refinery financing deal.”
“Our clients really value lawyers who can speak their language and understand the wider trends in the industry and what current market practice is”
Clarity is key
Since much of the work on the transactional side is contract based, it is vital that those interested in this area can write clearly and concisely, and express themselves fluently to clients when explaining and rationalising the commercial and legal positions set out in the drafted documents. Another key strength is the ability to negotiate effectively and come up with creative solutions to problems that can help the client to navigate any potential problems and actually get the deal inked.
Success in energy is also predicated on keen industry insight, suggests Julia: “It’s not really enough just to know about the law and to be a good lawyer. Our clients really value lawyers who can speak their language and understand the wider trends in the industry and what current market practice is. I think for young lawyers looking to break into this area of law, an awareness about what is going on with the oil price and the effect it is having on oil and gas companies is really good basic knowledge to have. It helps you to frame your advice to clients.”
Indeed, the oil price crash in late 2014 and ongoing volatility since have had a significant impact on the industry, with different companies affected in different ways; this in turn has had a knock-on effect on law firm workflows. On the M&A front, it has made deals more challenging to close as, for example, parties' price expectations may differ significantly and buyers may need to think in more detail about how they finance any acquisitions.
“While there are a number of assets for sale at the moment, as companies attempt to rationalise their portfolios to focus on their core assets, buyers are being a lot more discerning about the type of assets that they want to buy,” says Julia. “When a potential buyer is found, we are seeing negotiations taking much longer than they have historically, with a lot of uncertainty around the completion process once the deal is signed. This has led to some quite interesting trends flowing through in terms of changes to market practice and challenges to traditional ways of dealing with things in sale and purchase documentation.”
Building that industry knowledge can be as simple as following the mainstream media, as Julia explains: “One of the things that initially attracted me is that it was and still is a very topical issue. You can’t open a newspaper without seeing something about the oil and gas sector. It is one of the cornerstones upon which our way of life depends. We rely it for heat, light, transport and the manufacture of goods. It’s fundamental to our way of life. The other thing that really attracted me is that it is a truly global industry. It exposes you to a lot of different jurisdictions, and to interesting and complex work in those jurisdictions - and then there’s a lot of international travel which, of course, helps to keep things interesting!"
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