Energy and natural resources is a fast-changing sector. Climate change, renewable energy, diversification and oil prices are all having an effect. Interviewees at Vinson & Elkins tell us what lawyers working in this area do.
Chambers Student: What is energy law?
Lauren Davies, partner: Energy law is a very broad term encompassing many different areas of legal practice in the energy and infrastructure sectors including, but not limited to, corporate, commercial, regulatory, tax, policy and disputes work. There are also many different areas within the energy sector itself, including renewables, transitional fuels, oil and gas, power, infrastructure, petrochemicals and more. Energy is at the core of Vinson & Elkins (V&E). For us, energy law essentially means high-value, international and often ground-breaking transactions, projects and disputes across the spectrum of the energy sector and involving various legal disciplines.
CS: What are the challenges facing the energy market?
LD: The global focus on achieving net zero remains a prevailing theme across all aspects of the energy sector. A role in the energy sector ensures that you are at the forefront of the energy transition and will see a number of changes during your career, largely driven by the political atmosphere and the growing need to foster sustainable long-term energy supply that meets global demand. As lawyers, we adapt and develop the necessary skills to understand the prevailing market conditions in the context of our clients’ needs. It is an interesting time to practice law in the energy sector; the introduction of regulation across various jurisdictions and markets will have a real impact on energy creation and supply. Lawyers may find themselves advising on a broad range of work, from advice in connection with more traditional energy sources to advising on renewables and lower-carbon energy, in each case in the context of national and international legislative frameworks.
Alistair Wishart, counsel: The energy sector is going through a period of rapid change with the transition away from a hydrocarbon-based system. At the same time, the importance of energy security and the geopolitical significance of energy supplies also often make front page news. A significant challenge for the energy industry is that the energy transition is not just about building lots of solar and wind farms. We are reimagining the ways we generate, store, transport and use energy, and that will require a huge amount of investment globally, in things like power generation, electricity transmission, manufacturing, infrastructure, electric vehicles and heating, as well as mining and processing all the metals and minerals that will be needed for all these new investments. This will be a monumental challenge for years to come, and those dynamics make this a great time to be an energy lawyer.
Steven Wilson, senior associate: The tension between energy security and managing the energy transition is perhaps the greatest challenge facing the energy market. This was brought into sharp focus by Russia’s invasion of Ukraine in 2022. Many European governments, previously dependent on imported natural gas from Russia, scrambled to secure alternative supplies and provide state support as consumers faced surging energy prices. There has since been a growing conflict between the energy transition agenda and the reality of energy security both in Europe and further afield. There also appears to be a growing lack of consensus on the pace of the energy transition, coupled with an increasing divergence between developing and advanced economies. Adding to this pressure, the recent trend of ESG investing, the withdrawal of capital from fossil fuel developments and many governments’ pursuit of “net zero” policies have resulted in underinvestment in new oil and gas developments. The need to secure supplies of the minerals critical to powering a “green” economy (e.g., lithium, copper, cobalt and rare earth elements) brings new and novel challenges for energy security and the current geopolitical landscape.
CS: What is the impact of renewable energy on energy law?
Chris Strong, partner: Renewable energy is definitely a growing area, and as it continues to grow and evolve it will create opportunities for lawyers. One thing that makes renewables particularly challenging are the underlying regulatory issues. It’s much like conventional power development was 20 years ago as governments try to find regulatory approaches to encourage the development of cost-effective renewable energy. Energy lawyers who specialize in electric power have definitely had to get up to speed on the particular issues relating to renewables and more and more new projects are in the renewable space rather than in the conventional thermal energy space.
CS: What do trainees do?
India Whelpton, trainee: Trainees at V&E work on corporate matters (M&A, project finance and project development) within a number of sectors in the energy industry, including, but not limited to, oil and gas, renewable energy, and wind power.
Trainees assist associates and partners with drafting documents, including sale and purchase agreements, engineering, procurement and construction contracts, forms of attachments (e.g., forms of notice to proceed, forms of performance bond, and forms of lien releases and waivers), and offtake agreements. Trainees can also expect to manage documents in data rooms, assist with due diligence exercises, research client-led legal issues, co-ordinate signings and closings, and attend calls and in person meetings with clients and other legal advisors.
CS: What do associates do?
Afzaal Abidi, associate: Associates practicing energy law work on variety of matters within a number of sectors in the energy industry. On the corporate side, associates have the opportunity to work on M&A transactions, debt and equity offerings, financing arrangements, general commercial work and project development and construction contracts; and on the contentious side, associates can get involved in litigation and arbitration proceedings relating to the development, financing or construction of energy projects or the acquisition of energy assets.
Associates support the senior associates and partners in their team, whether by drafting and negotiating the less complex documents on a matter, managing conditions precedent and due diligence exercises, or driving the process of coordinating with other consultants and legal counsel from around the world. As they progress through their career, associates can increasingly take on more significant workloads by drafting and negotiating key documents and becoming the key point of contact for clients.
CS: What are the main responsibilities of a senior associate working in the energy transactions & projects sector?
SW: The type of work may involve working on corporate matters, project development, financings, commercial and regulatory advisory work and assisting our disputes colleagues on energy-related contentious matters. Day-to-day, a senior associate can expect to lead or take “second chair” in negotiations, take primary responsibility for client correspondence and key transactional documents and synthesise the work product of more junior team members. A senior associate will also coordinate workstreams, delegate effectively, and supervise and train associates and trainees. Having progressed from a junior associate, a senior associate will also assist with client relationship management, billing and wider business development activities.
Working in the energy sector, a senior associate should be able to effectively work with a global client base and the cultural challenges and opportunities that entails. As a sector specialist, he or she should also have developed wider industry knowledge to add value to our clients – this can include at least some grasp of the relevant geopolitics, petroleum economics, geology and engineering.
CS: What are the main responsibilities of counsel working in the energy transactions & projects sector?
AW: Counsel lead or work closely with the partner leading on transactions and coordinate and supervise the work of other members of the team. Counsel also get involved in training more junior members of the team, both through formal training sessions and, more importantly, by giving on-the-job feedback and support to associates and trainees.
CS: Who are some of the main players you interact with day-to-day?
AW: First and foremost, we interact with our colleagues, including team members and lawyers from other practice groups. We also interact with the firm’s business professionals and, on a typical day, I will interact with my PA, our IT department, marketing team and office services. These are the people that keep a law firm running smoothly. Outside the firm, on a typical energy project, we will work closely with our client, of course, but we also interact with our client’s other advisors and the advisors to other project participants. These will typically include other international law firms, technical advisors, financial advisors, environmental and social consultants, market consultants and insurance advisors. Also, because we work on energy projects in many jurisdictions around the world, we work with local lawyers in those jurisdictions on all of the local law issues arising on the project.
SW: We are privileged to represent a wide variety of players across the upstream, midstream and downstream markets of the energy sector – including oil and gas, liquefied natural gas (LNG), power, renewables, hydrogen, mining and metals, and energy-related infrastructure. Our clients include governments, national oil companies (NOCs), multinational energy companies, oil and gas majors, independent exploration and production (E&P) companies, service companies, private equity funds, and financial institutions. Our client base is global in nature and includes players across North America, South America, Europe, Africa, the Middle East and Central Asia. It is a constant joy to work across such diverse geographies and cultures.
CS: What kind of work is involved day to day?
LD: Travel, meetings and/or conference calls are a regular part of our role, as well as drafting, negotiating and managing the legal documentation required to progress and eventually close a transaction. We work closely with our clients, with local counsel and with lawyers acting for the counterparty, as well as with consultants in non-legal disciplines. At V&E, almost all of our transactions and projects are cross-border, meaning that our work can involve a number of jurisdictions and regions (including Africa, Europe, Turkey, the Middle East, Central Asia and the U.S.). Our clients range from major international energy companies to private equity firms, project developers and consortia, feedstock providers, product offtakers, contractors, licensers, governments, banks and financial institutions. Each day can be different, and that’s what makes the role so enjoyable.
IW: The type of work in the energy transactions / projects team is extremely varied; no two days are the same. One day I may be coordinating advice from local counsel and assisting with a due diligence report in relation to the acquisition of offshore assets in Africa; the next day I may be working alongside a partner in one of our U.S. offices, drafting a form of offtake agreement for a hydrogen project in Central America. This is what, I think, makes V&E such an exciting place to work!
CS: What is your advice to students interested in this area?
AA: Be curious, keep pursuing your interest, and keep an open mind! There are so many different facets to working in energy law – you can be an M&A, finance or disputes lawyer, but having the backdrop of energy makes it all the more interesting. It’s also important to figure out what appeals to you personally – those who can communicate what it is about the energy sector that relates to their personal interests and experiences make for much more compelling candidates!
The current environment means that it’s an incredibly dynamic area to work in, and most of what we do results in a tangible outcome, such as advising on the legal aspects relating to the construction, financing and operation of a blue ammonia project – all of which serves to makes it an extremely rewarding area to practice in.
CS: How can trainees keep their knowledge of the energy and natural resources sector up to date?
CS: Keeping up to date on developments in the sector is critical regardless of whether you are a trainee or a senior partner. Lawyers can keep abreast through general news sources (such as the Financial Times or The Wall Street Journal), specialist industry publications such as the Petroleum Economist, and through industry associations such as the Association of International Energy Negotiators or the International Project Finance Association.
CS: Where can trainees expect to be in five years?
LD: As an energy lawyer, there are many opportunities for career progression. This may include travel, secondments to other international V&E offices or to clients, as well as the opportunity to specialise in a particular area within the energy sector.
Since many large-scale projects can last years, a trainee may still find themselves working on the same transaction (or at least some element of it) five years down the line. This gives an individual the ability to really know all aspects of a transaction, as well as building excellent client relationships and industry skills.
CS: What are the opportunities unique to V&E?
IW: The structure of V&E training contract differs from other law firms in the city. Whilst the first year is structured like a ‘traditional’ training contract, the second year is ‘non-rotational’, which means that trainees can pick up work from the departments that excite them the most! International secondments are also available – I am about to move to the energy transactions / projects team in our Houston office for a six-month secondment.
V&E’s London office is also heavily influenced by its Texan roots. Despite working long hours, everyone is extremely friendly, and the collegiality amongst colleagues is second to none.