The oil and energy sector occupies a unique position in the Norwegian economy. The Norwegian Continental Shelf is one of the world’s most attractive places for oil and gas production, and the Norwegian petroleum industry benefits from strong expertise, leading technology and stable framework conditions.
In recent years, the industry has been challenged by the fact that existing fields are maturing, there is pressure on costs, and the price of oil is uncertain. This has been met with tough and effective adjustments, along with increased exploration activity and opening for new players. This has resulted in major new discoveries, increased innovation and extended lifetimes for existing fields. The costs of development projects have seen drastic cuts, and the projects that are now adopted can tolerate a substantially lower oil price than was previously the case. 2017 has proven to be a year with record-high gas production, and the Norwegian Petroleum Directorate’s forecasts show that the increase in production will continue up to 2023. At the same time, the state wants more exploration activity, and the estimates for undiscovered resources show that northern areas like the Barents Sea have huge potential. Production and sale of oil and gas will thus continue to be extremely important for Norway in the decades to come.
BAHR’s energy and natural resources group works closely with a number of leading players on the Norwegian Continental Shelf, and follows its development up-close. We have strong expertise within the relevant areas of law for the industry, and we provide services that target the industry’s daily work and issues. We also assist in the players’ more “extraordinary” activities, such as in connection with transactions, dispute resolution, projects, regulatory issues, tax and financing.
We have extensive experience as advisers in M&A transactions and we regularly assist in the largest transactions on the Norwegian Continental Shelf. The group recently assisted in Point Resources’ purchase of ExxonMobil’s operated fields on the Norwegian Continental Shelf and in the merger of Det norske oljeselskap ASA with BP Norge AS to form today’s Aker BP. These are two of the largest transactions on the Norwegian Continental Shelf in recent years. BAHR also assisted Aker BP in its acquisition of Hess Norge, CapeOmega in connection with acquisitions within Gassled and ENGIE in connection with the group’s sale of large parts of its global oil and gas activity, including the group’s oil and gas activity in Norway.
We represent clients in disputes that are particular to the industry, and we possess strong expertise on tariff issues between licences, redetermination cases in connection with unitisation of oil fields and price review cases under gas sales contracts. The group also assists three of the four major infrastructure investors who together own about 37% of Gassled (the world’s largest offshore gas infrastructure system) in the lawsuit against the Norwegian state regarding the authorities’ tariff reduction from and including 2016.
We also have extensive experience and expertise linked to major development projects, and we provide assistance for example in connection with contract negotiation and drafting related to fabrication, unitisation, drilling projects, seismic agreements, as well as oil and gas sales contracts. In this context, BAHR has assisted in connection with the unitisation of the Johan Sverdrup field and Aker BP’s Alliance project.
We have extensive contact with the authorities within the regulatory area. Among other things, we have provided assistance in connection with prequalification, competition law issues, authority approvals and communication associated with acquisitions and transactions.
BAHR has Norway’s foremost petroleum tax community with attorneys foremost in their field. The tax system is a key part of the framework conditions for the petroleum activities, and makes up an important part of the decision basis in all phases of the activity, from exploration to production and cessation with removal. BAHR provides constant assistance to most of the major established oil companies on the Norwegian Continental Shelf, as well as a number of medium-sized and newly-established smaller companies. BAHR provides tax advice in projects and investment decisions, and follow-up on tax cases through tax decisions and appeal processes. BAHR has also assisted in most of the major transfer pricing cases processed by the tax authorities in recent years, such as allocation of group costs, pricing of wet gas and dry gas sales, distribution of R&D costs and a number of cases related to pricing of financial transactions. BAHR has represented several companies in major tax cases before the courts, such as Statoil in the Supreme Court regarding deductions for exploration costs abroad, and cases regarding depreciation rates on industrial facilities, ExxonMobil in cases regarding arm’s length pricing of interest rate terms and Shell in cases regarding deductions for costs associated with reputation-building, tax treatment of profit on purchase and sale of dry gas and distribution of R&D costs.
In cooperation with BAHR’s leading finance team, the group has extensive experience with RBL facilities and assisted amongst others Det norske oljeselskap (now Aker BP) with the first major RBL facility on the Norwegian Continental Shelf in 2014. We recently assisted Aker BP with its refinancing and new RBL facility in connection with the acquisition of Hess Norge. We also have detailed knowledge about exploration loan facilities, acquisition financing and restructuring and we have provided services, for example in connection with the restructuring of Noreco and INEOS’ financing of the DONG acquisition.
BAHR’s energy and natural resources group carries out its services with a high degree of quality, mixed with a pragmatic, practical and result-oriented approach to the client’s issues. We combine leading legal expertise in our fields with resources in other aspects of the firm’s expertise such as tax, labour law and competition law, where necessary. This allows us to provide comprehensive services to our clients. The group is consistently ranked as Tier 1 in Chambers Global and Legal 500, where they are regarded as standing out from its competitors by virtue of having “exceptional knowledge, client care and responsiveness”.