Book Reviews

Introduction to Oil and Gas Joint Ventures, Vol. I UK Continental shelf, by John Wilkinson, Oilfield Publications Ltd, 1997, ISBN 1-870-945-964

Many professions are involved in oil and gas development, each one having its own specialised expertise, professional association and academic discipline. But in the actual development, they have to collaborate - the geo-scientists, engineers, economists, lawyers, accountants, commercial and management executives. Communication between them is difficult as each professional group uses its own terminology and ways of thinking, deciding and collaboration. There is little help available to build bridges. But communicative bridges are necessary to make the inter-professional teams perform effectively. The greater the task of planning, designing, developing, operating - and finally abandoning - the mammoth structures now used in the North Sea, there more efficient performance requires good inter-professional communication. While it is not possible to make lawyers out of engineers, it is possible to transmit a general familiarity with the work areas and the major concepts of the various professionals involved. This happens in actual practice, but so far there has been little instruction available on the key concepts derived from all disciplines involved, on the sequence of steps necessary to develop large-scale oil and gas projects and on illustrating how specific skills and concepts (e.g. legislation, regulation, insurance, contracting and taxation) relate to each other and to the main geological, engineering, safety, environmental, economic and commercial concepts deployed. The Shell Petroleum Handbook of 1983 was an admirable "manual" of the petroleum industry, but is by now unfortunately dated. There are two quite simplified introductions to petroleum law and contracts (Bernard Taverne, published by Kluwer in 1994 and 1996), but they deal in the main only with issues of legislation and taxation relying on general concepts rather of the past then present or future.

The new book by John Wilkinson has been written with substantial inputs from a number of specialised and recognised law firms, accounting and insurance and with the benefit of discussions with British oil and gas companies, industry associations andthe government agency (DTI). It summarises and surveys the basic concepts of the relevant professional skills involved, focusing on the understanding required to form, negotiate and manage offshore oil and gas joint ventures. It deals with the establishment of joint ventures (bidding agreements; UK governmental licensing; joint operating and unitisatioin agreements; joint venture management; exploration; appraisal and development planning (including the role of the regulatory and licensing agency); project planning and implementation; production operations, including pipelines; personnel, safety and environmental protection; transportation by pipeline and tankers; abandonment (given the current controversies in some detail). A strong "contract" chapter surveys transportation by tanker and pipeline contrcts; service and insurance contracts. The main financing techniques are summarised as are the key economic concepts used for project appraisal. Petroleum tax is presented as are - in some detail - oil and gas insurance. . There is also a chapter on the view point of the non-operator. The manual often summarises key pieces of legislation, DTI licensing guidelines and specific contract types. There is also a - very short- glossary of petroleum industry terms and some UK relevant addresses. The method of this manual is a very brief introduction into the issue, followed by what is in effect a summary of a key document.

This manual by John Wilkinson is most useful for anybody interested to understand the engineering, financial and legal mechanics of the UK offshore oil and gas industry - and thereby commercial practices that, with variations, exist throughout the world oil and gas industry. It is also most helpful for any professional involved in this industry who needs to understand the language and the key issues his colleagues from other disciplines deal with. For a non-lawyer, or a non-oil and gas-lawyer, this is certainly an excellent introduction in the legal, regulatory and contractual practices of the industry. The book is not intended, and does not provide, an in-depth treatment of any subject. It serves for general familiarisation, but not for in-depth study and acquisition of expertise in any of the particular fields covered.

Looking back with nostalgia to the old, but in its own way outstanding 1983 Shell Handbook for Oil and gas, one would have liked that the author provides further references to allow in-depth study. It is, for example, surprising that the main handbook on UK oil and gas law - Daintith/Willoughby (Sweet&Maxwell, looseleaf) is not even mentioned, as are useful journals (e.g. JENRL or OGTLR) or other information services and relevant newsletters. The role of specialised professional firms as main sources of intelligence may perhaps have reduced the incentive to use this book as a vehicle for full access to available knowledge and expertise. There is also a certain whiff of traditionalism: The now emerging major sources of business intelligence through the internet are not even mentioned and significant regulatory influences from the European Community (i.e. through the utilities, procurement, licensing, employment, safety and environmental directives) are passed over in (almost) complete silence. Similarly, email addresses are absent from the - cursory - list of relevant addresses.

To sum up: This is a very useful introductory - but comprehensive - manual on what professionals practically involved in the offshore UK oil and gas industry should know about the work of their colleagues in other disciplines. It does, though, not replace in-depth study of the particular areas of professional knowledge. As the book does not provide any signposts to deeper expertise, one needs to make an independent effort to identify the relevant works in the other relevant disciplines.

T. Wälde, CEPMLP/Dundee