Bringing Back The Love For Collaboration

By Laura Petrie, Legal Director, Brodies LLP

Achieving the UK Government's target to be net-zero by 2050 will require a collaborative approach from stakeholders right across the energy industry. With increasing political and social pressures on the oil and gas sector and in light of the revised OGA Strategy, heritage oil and gas companies are re-calibrating their business strategies to reduce their carbon footprint, attract investment and position themselves as viable energy companies of our time.

As February is traditionally the month for coupling up it also seems to be an appropriate time to revisit the subject of collaboration across the energy industry.

In 2019, collaboration was hailed as a key approach through which the oil and gas industry was going to reinvigorate itself and achieve an integrated energy offering. Various collaborative ventures were announced and it appeared that this form of working practice was going to become a staple of all developments and contracting frameworks.

Now, the industry appears to have fallen out of love with collaboration. Just like any relationship, collaborative relationships take work and ongoing commitment. As any relationship counsellor (or lawyer) will tell you, there are some key behaviours that can help build this type of strong commercial relationship.

Efficiency

All too often, oil and gas projects have been accused of gold-plating and over leveraging or man-marking. Smaller, task-focussed teams and shorter lines between the work and the key decision makers are needed to ensure collaborative work can be effected in short order. Meetings are crucial to working in this way but should always follow a clear agenda and consideration should be given as to whether shorter one-to-one meetings might have more impact than lengthy multi-party meetings. All these arrangements and procedures can be captured in a suitable working agreement so all parties know what is expected from the outset.

Empathy and Clarity

These two behaviours go hand-in-hand. Collaborative relationships have frequently been described as ‘win-win’ structures where both parties should benefit. Achieving a win-win situation requires parties to be empathetic to each other and also to be clear from the outset what they each want to achieve. Typically this requires a shift away from traditional master and servant contracting frameworks and use of more bespoke contracting structures. This achieves a clear outcome focussed arrangement and relies less on acceptance of ‘standard’ forms that might not really be fit for purpose.

Positivity and Accountablility

Any relationship will be irreparably damaged once one party no longer has conviction in that relationship. This is especially true with this type of joint working relationship. If any party is less than enthusiastic about the structure or the outcome then they will not be engaged in the works. Goal setting, milestones and shared rewards built into the contracting structure can help maintain focus and conviction in achieving the parties’ goals. These contractual tools also help the parties demonstrate accountability without the need for constant supervision or ‘man-marking’ and act as a way of monitoring progress and engagement.

Relighting the Fire

Energy integration is going to require collaboration on an unprecedent scale, bringing the oil and gas industry together with the renewables community and working with a wide range of technological innovators and regulatory bodies. Undertaking a heath check and focussing on these behaviours now will ensure that the industry is ready to ‘swipe right’ on collaboration in 2022.

Trust

Partners have opted to be engage because there is a recognition that they have skills or qualities that complement each other. However, in sharing those skills and qualities there has to be an element of trust that the other party won’t take advantage of that experience or utilise the relationship for selfish reasons rather than the benefit of both parties. This is best demonstrated in collaborations by the sharing of information, particularly market sensitive data or intellectual property. Commercial trust must always be tempered by commercial reality so, just like some relationships require a pre-nup, so too should any data-sharing be preceded by a non-disclosure agreement.

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