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North Sea

Vinson & Elkins' lawyers have been advising clients, including oil and gas majors, independent operators and non-operators, service companies, and financial institutions, for more than 40 years on transactions and disputes in the North Sea.

In particular, our North Sea work encompasses asset and share sales and purchases, advising on all contracts required for exploration appraisal and development, regulatory and tax advice, and resolving oil and gas disputes. The V&E North Sea team includes probably the most experienced tax lawyers in any UK law firm, when it comes to North Sea tax matters. The team has assisted the UK Oil Industry Tax Committee (UKOITC) and Oil and Gas UK (OGUK) in their representations to, and discussions with, government on new legislative changes to the UK’s oil tax regime, including, in recent years, in relation to decommissioning relief deeds, shale gas-inspired changes, the bareboat chartering rules, and the capital/revenue expenditure divide as it affects the availability of the brown field allowance.

Between 2010 and 2014, our UK team advised on more than $3.5 billion of completed sales and acquisitions, and has perfected the art of structuring tax efficient hive-down and sale deals for North Sea oil and gas fields. We are also advising on the structuring of a further $2 billion of potential asset sales.

Such experience allows our clients to benefit from greater efficiency and more focused advice than most other firms would be in a position to provide. It also means V&E would not incur a costly learning curve to get up to speed on issues relating to the transactions and disputes in the region.

In addition to supporting our transactional work, our Tax team has provided detailed advice on various issues, including the following:

  • Allocation of profits before and after an increase in the rate of supplementary charge
  • Disclosure issues relating to use of forward contracts for tax efficiency
  • PRT treatment of sales at the offshore production facilities
  • Tax exposures to non-UK resident investors making substantial private equity structured investments in North Sea companies
  • Treatment of deferred payments on the sale of exploration interests

Additional Information

Practice Highlights

  • A confidential bidder in connection with the proposed acquisition of Oilexco North Sea Limited, including approximately 13 producing assets and multiple development and exploration interests for a purchase price of approximately $500+ million
  • Several major U.S. energy groups in relation to the disposals and acquisitions of UK North Sea licences and related reorganisations
  • A European Energy Company with a bid for the $800 million acquisition of certain gas fields in the UK North Sea and on many UK/European asset acquisitions, disposals and commercial contract negotiations
  • A FTSE 100 North Sea company on its demerger of part of its business, followed by a merger of that business to form a new UK listed group Doak
  • An independent E&P company in connection with the $1 billion auction sale of its subsidiaries, which held various UK North Sea licence interests and producing fields, to various international energy companies
  • A Canadian oil and gas group on the restructuring and disposal of all of its UK interests
  • A North Sea oil company on the creation of a production payment and the negotiation of its treatment with HMRC