Upstream Petroleum Contracts

COURSE OUTLINE 5 DAYS
Date: 2^nd to 6^th November 2026

The fact that Petroleum is a non-renewable resource fundamentally drives the business decisions of Governments and companies, a key part of which is that most petroleum contracts are structured to contemplate the entire life span of a project, its beginning, middle, and end.

Upstream Petroleum contracts can vary widely in their details; all must establish two key issues on how profits are divided between the government and participating companies.

This provides in-depth information on the types of upstream petroleum contracts and their differences, and the main contractual terms. Participants will need to fully understand all types of Upstream Petroleum Contracts. This Contracts Management training course will comprehensively cover Production Sharing Contracts, Exploration & Production Agreement (E&P), Exploration & Exploitation Contract, License Agreement, and participants will take away essential elements of these contracts to be effectively used in their own companies.

This Upstream Petroleum Contracts course will highlight:

• The Fundamental Types of Upstream Petroleum Contracts
• The Advantages and Disadvantages of the Different Types of Upstream Petroleum Contracts and How They are Suitable for Specific Types of Projects
• Concessions, Production Sharing & Risk Service Contract, Important Details and Suitability for any Oil and Gas Upstream Project
• The Role of JOA in Upstream Petroleum Contracting Conciliation, Mediation and Settlement of Disputes
• Understanding the Essentials Terms of Unitization and Farm-in, Farm-Out Agreements

Objectives

Participants will have a working knowledge of Upstream Petroleum Contracts and how to apply this knowledge to administering Production Sharing Contracts. Further, participants will gain working knowledge of accounting and auditing procedures that will need to be implemented. 

At the end of this training, you will learn to:

• Gain a full understanding of the different types of the Upstream Petroleum Contracts
• Understand the main contractual terms and their differences between the various types of contracts, from PSA, Service contracts, and others
• Be aware of the approaches to negotiation of these contracts
• Incorporate the best terms into these Upstream Petroleum Contracts

Training Methodology

Participants will gain a greater understanding of the subject matter through presentations by an experienced international practitioner designed to both inform and broaden the perspectives of the participants. Case studies will be reviewed and discussed, bearing in mind some of the realistic scenarios participants may encounter. Interactive discussions to encourage discussion of problems and possible solutions to them. The negotiation simulation exercise will help participants get a realistic feel for negotiating a PSA contract.

Who Should Attend?

This ALARDI Africa Upstream Petroleum Contracts training course will benefit all levels of personnel involved in the resolution of oil and gas disputes. It will enable a broad range of disciplines to appreciate and understand the complexities of conflict resolution, in particular in the Oil and Gas industry, and how best to manage disputes in the oil and gas industry.

This Training is appropriate for a wide range of professionals but will greatly benefit:

• Senior Contract Negotiators and Managers
• Legal Managers, Legal Counsel
• Commercial and Business Managers
• Contracts Administrators and Managers
• Commercial, Financial and Insurance Professionals
• Project and General Management Personnel

Course Outline

DAY 1. Introduction and Overview of Upstream Petroleum Contracts

• Brief Overview of the O&G Industry
• Oil and Gas Terminology
• The Legal Framework to Upstream Contracts
• Introduction to Contract Formation
• Key Oil and Gas Terminology
• Oil and Gas Industry Structure
• Relationship between Different Players in the Oil and Gas Industry
• Phases of the Oil and Gas Industry
• Oil and Gas Contract Fundamentals and Legal Principles
• Territorial Water, Continental Shelf, and United Nations Convention on the Law of the Sea (UNCLOS)

DAY 2. Contracting in The Upstream Sector: Ownership and Licensing

• Ownership and Exploitation of Reserves
  • The ABCs of Petroleum Contracts: License-Concession Agreements, Joint Ventures, and Production-sharing Agreements
  • Characteristics of Upstream Contracts
  • Commercial Realities of the Oil and Gas Business
  • Agreement with Resource Holders
  • Ownership of Oil and Gas
  • Risk Service Contracts (RSCs)
  • Grant of Rights by Resource Holder

• Host Country’s Legal and Regulatory Framework and Fiscal Regime – Stabilization
  • Role of Host Government
  • Key Issues in International Oil and Gas Contracts
  • Negotiation Framework and Strategy – Objectives of Host Countries / NOCs and IOCs

• Host Government ‘s Role in Upstream (Exploration & Production (E&P)) Agreements
  • Overview of Upstream Operations and E&P Agreements (types and trends by region)
  • Key Differences between Production Sharing Contracts (PSCs), Concessions, Service Contracts, and JV Contracts
  • Role of Host Government in Upstream Contracts

DAY 3. Production Sharing Contracts (PSC) & Joint Operating Agreements (JOA)

• Commercial Terms in Licensing and Concession Agreements
  • Fiscal Arrangements, License Fees
  • Five Key Financial Aspects to a PSC:
  • Royalty, The R factor
  • Cost Oil
  • Profit Oil
  • Taxation
  • Bonuses, Penalties
  • PSC – Cash Flow Distribution
  • PSC – CF Distribution Example – Year N+1
  • Comparison of Fiscal Systems

• Joint Operating Agreements (JOAs)
  • What is a Joint Operating Agreement (JOA)?
  • Nature, Aim, and Functions of a Joint Venture
  • Government Approval
  • Key Areas of the JOA
  • Purpose and Scope: Participating Interests

DAY 4. Service Contracts, Farm-In and Farm-Out, and Unitization – Risk Bearing and Non- Risk Bearing Service Contracts

• Participation Agreements (Farm-in and Farm-out)
  • Agreements for Farm-ins and Farm-outs
  • Nature of the Farm-out
  • Subject Matter of the Farm-out
  • Interest Assigned and Reserved
  • Assignment of Interest

• Unitization and Unit Operating Agreements (UUOAs)
  • What is unitization?
  • Unitization in Practice
  • Government Approval
  • Transboundary Unitization

DAY 5. Negotiating Production Sharing Contracts

• Government Take
• Production Share and Cost Recovery
• Local Content
• Force Majeure
• Dispute Resolution
• Stabilization and Renegotiation Provisions

Negotiation Simulation Exercise

• Negotiation of a PSA with a Government Entity
• Objective: The objective is to establish what can be achieved in the meeting, what preparation is needed for it, and what strategy should be adopted, and then to pursue this strategy
• Feedback Session

Negotiation of Oil and Gas Disputes

• Importance of Negotiation in Oil and Gas Business
• Disadvantages of Competitive or Positional Negotiation
• Principled Negotiation between the Parties to Achieve Best Results

Certificate

• On successful completion of this training course, the ALARDI Africa Certificate will be issued to the participants.

Venue:

Kenya-Nairobi                  Cost USD 1800

UAE-Abu Dhabi                Cost USD 2200

Date: 2^nd to 6^th November 2026