Janet Nussbaum of Greenfields Petroleum speaks to Adam Majeed about her role as in-house counsel for a international company looking for opportunities in the oil and gas industry in Azerbaijan
The first thing I want to ask you is how long have you been working in the energy industry?
Since 1987, so for about 25 years,I have been working with Greenfields or its predecessor since 2007. My prior experience in the international oil and gas industry included 12 years with Amoco Corporation in its international legal group and then private practice representing a variety of small to medium sized oil and gas companies with international projects.
How much experience do you have when it comes to oil and gas in the Caspian region?
Greenfields has been active in Azerbaijan for over five years. It currently participates in a company which holds a production sharing contract for a field offshore Azerbaijan.
What are Greenfields Petroleum’s main targets for its activity in the Caspian region?
Greenfields’ goal is to capture and exploit what they call “greenfields” - with a small “g” - which are discovered but not fully developed assets, and develop those assets to the point where they might be of interest to someone else. The asset in Azerbaijan is an oil and gas field previously owned by SOCAR, the Azeri state oil company. The company is now developing that field utilising up to date practices and technology.
What potential do you see in Azerbaijan? How important is it as a source for energy regionally and globally?
Historically, Azerbaijan has been very important as a regional source for energy. Its potential is significant and Greenfields continues to look at other opportunities in Azerbaijan as they become available. Other companies are certainly doing the same.
What sort of issues do private investors in oil and gas run into in Azerbaijan. In your experience, what are the biggest risks in looking at a project?
I am fairly comfortable with the oil and gas regime in Azerbaijan from a legal standpoint, because the country has had an established production sharing contract for some time. I think that SOCAR understands the oil and gas business, and works fairly well with the oil companies. There are obviously operational risks that you would have in any developing country. I think – and I am probably speaking out of turn because I am not an operations person – that getting the qualified people in place to do the work and obtaining the proper supplies and equipment can be a bit of a challenge.
Are there any recurring problems that you face when carrying out work in Azerbaijan as general counsel? Do you come across any regulatory complications?
The production sharing agreement that I mentioned earlier is operated by a joint operating company in Azerbaijan. Fortunately, the operating company has good in-house counsel to handle the day-to-day legal issues that arise. Although I am not involved in the day-to-day operations, my sense is that from a regulatory standpoint Azerbaijan is not significantly different from other developing countries.
As in-house counsel, are there any other challenges that you face?
My background is international project work. A general counsel, however, has to deal with a wide range of issues from corporate governance to financing to foreign government contracts. It has been an interesting learning curve. One of my biggest challenges is knowing when to get outside counsel involved. I want to make sure that the company has proper legal support, while still containing costs. The latter is not always easy.
How involved are western and local private enterprises in oil and gas projects when compared to the state in Azerbaijan?
It is my understanding that the state, through SOCAR, is involved in all oil and gas projects in Azerbaijan. SOCAR enters into production sharing contracts with both western and local companies, and retains some form of interest.
At what point in your experience would you decide to look for external legal counsel?
If there is an area in which I feel that I do not have sufficient expertise, I will look to external counsel. For example, securities issues and financing matters require a specialisation that I do not possess. Similarly, purely local issues in an overseas venue require specialised knowledge. Accordingly, I will seek outside counsel to assist in those areas. I typically do not, however, use outside counsel for industry agreements, such as production sharing contracts or joint operating agreements. These types of matters are better handled in-house, because that is where the experience resides.
What sort of qualities do you look for in external legal counsel?
That depends on the location. In a non-US/Canada location, I look first for a good command of the English language. I look secondly for some level of western training or supervision, and some experience with the hydrocarbon industry. I need to know that whoever I use will not only understand what I am requesting, but have a similar legal frame of reference. In Azerbaijan, for example, Dentons is Greenfields’ legal counsel. In the US/Canada, experience and reputation is key. McCarthy Tétrault in Calgary currently handles most of our corporate matters.
How much of your work is done in-house and how much is outsourced?
That depends. For strictly oil and gas work, I would say that 95% is done in-house. When it comes to corporate matters such as securities issues, financing matters or items relating to the stock exchange, however, we do rely heavily on outside counsel.
How do you structure your fees? Do you prefer fixed rates or hourly rates?
I prefer an hourly rate. I want to know who is working on the project, what specific services are provided broken out on a daily basis, how many hours a particular individual spends on any given aspect of the project, and their hourly billing rates. I sometimes have to remind folks to provide the detail, but it is important. Does that mean that I can control all costs? No, but at least I know if it is getting out of hand. If it is, then I may have a discussion with outside counsel, or change counsel altogether.
Greenfields Petroleum Corporation
Ms Nussbaum is currently General Counsel of Greenfields Petroleum Corporation and has over 25 years of experience in the international upstream oil and gas industry. After a number of years in private practice, she joined the international law department of Amoco Corporation in 1987. After 12 years she returned to private practice, representing both large and small companies in exploration and production operations in countries as diverse as Azerbaijan, Kazakhstan, Oman, Indonesia, Thailand, Tunisia, and Namibia. She has been with Greenfields, or its predecessor, for the last seven years.
Ms Nussbaum received her JD from Vanderbilt University, where she was a member of the Law Review, and her BA from the University of Virginia. Ms. Nussbaum is a member of the State Bar of Texas.