Drafting Oil and Gas Contracts

Well, after months of inactivity we are back again and this time we look at drafting oil and gas contracts – well actually we will be looking at a whole range of contract situations, but we like the idea of illustrating it with oil and gas. The reason for this is that they are difficult to draft. They also allow for a lot of creativity and innovation. So if you are writing a contract it might as well be an interesting and creative process. If we consider the defining terms then the oil and gas agreements can be referred to as bespoke purchasable products. Additionally, we look at the ways and modes in which the executors and crafters decide on making these contracts not to be mere objects but works of art. Therefore, the way you create them has to generate profound reactions on the part of the several parties involved in comprehensive oil and gas agreements.

Of course, to make a contract, it has to be legally binding and you need to understand how the law works in a jurisdiction, in this case the Texas law. There are however a number of ways of being creative with the drafting process. What we see is essentially a lot of development in the area and it is not a given that you cannot ‘rip off’ passages from other agreements. If you can improve the drafting to make it clearer or more effective then this is almost always a good idea. In fact cutting and pasting is the lawyers best friend. Of course what is not your friend is lack of understanding of what the contract is for. That is where the creative director can assert themselves.

We are not talking about some arty fart concept of creativity mind you – this is the creativity of a big agency who you would pay a lot of money to design a couple of hundred pages of development documentation for an oil field. What happens is the creative director does what we do, helping to shape the approach and style of the document. We move sections around and make decisions that have been informed by experience and by also working with other disciplines.

So the oil and gas contracts aren’t just there to be read – they have to be bought into by the people signing the dotted line, or they go back to the drawing board. With that in mind it is important to offer something different. A contract may be too verbose or it lacks the consistent style that the client is used to seeing. Therefore it ‘grates’ on them. On the other hand when you look at a well drafted document you can see that it is actually quite a piece of work.

What stands the humble artisan apart from the artist is sometimes the size of the contract. For instance the Gorgon project, which was a whopping $35 billion project, had plans drawn up on A0 size sheets. As well they were laid out and laid out to suit as much as possible to be viewed as a whole. What this meant is that it gave a huge view of all the different elements and how they fit together. What followed was the issue of mapping out the whole supply chain and then deciding a drawing number system that covered the whole complex.

This is probably the hardest part of any project because it is detailed work and it requires a creative but precise mind.

The reason was that the contracts required people to step into the shoes of a variety of business and commercial areas. With that said, the level in which the contract lay out and looked was very indicative of the effort that went into it. It can sometimes be seen as a litmus test. What this meant is applying art in the drafting process has additional benefits. Therefore, if you are thinking about engaging in some drafting try to be innovative and creative. It is what artists do.

It takes a certain vision to do legal work, but someone has to do it. As we have said the oil and gas contracts are visual works of art.