Beijing, Houston, Rio de Janeiro and London: these are the locations where the four heads of leading global law firm Mayer Brown's energy practice are based, which suggests some of the challenges and attractions for lawyers of working on the matters that firms like Mayer Brown take on. These matters, especially ones in the energy sector, often involve complex scenarios in politically volatile regions and the parties involved are usually scattered across the globe. Last year, a team of Mayer Brown energy lawyers worked on a high profile $4.2 billion (£2.7 billion) merger that was certainly no exception.
In November 2011, Genel Energy International Limited, a large oil and gas company operating in the Kurdistani region of Iraq merged with Vallares plc, an investment vehicle set up by financier Nat Rothschild and ex-BP chief executive Tony Hayward. This join-up required extensive input from Mayer Brown lawyers with a range of specialisms in various locations. Rob Hamill, a partner in Mayer Brown's corporate department and co-head of the firm's global energy group, tells us more.
Why did the deal happen? "The people at Genel, who we've worked for at Mayer Brown for a number of years, were keen to raise finance to expand their operationsâ€ says Rob. "And cash-rich Vallares was looking to invest in interesting oil and gas companies. So this deal was a great combination of a business that had lots of oil and gas assets and needed money to finance their development, and a financial vehicle that wanted to invest in such a company.â€
What Rob enjoys about working as a lawyer on this kind of energy deal is the way in which the work involves high level political issues and also touches people's everyday lives: "Energy is always on the agenda for governments and large companiesâ€ he says, "- and it's essential for modern livingâ€. And it was these kinds of factors that made the Genel/Vallares deal a fascinating one for Rob and his team: "The backdrop to the deal was the reemergence of Iraq as a major oil-producing nation. The country has the third largest reserves of oil in the world but, thanks to 30 years plagued by conflict and international pariahdom has been almost eliminated. So the country is dependent on the oil industry to revive its economy.â€
But what role do lawyers actually play on these deals? Rob explains that his team, initially representing Genel, helped the company to research potential partner Vallares in the early stages of negotiations so they could decide whether or not to proceed with the deal. Once both parties resolved to go ahead, the next stage was the drafting and negotiation of all the documentation that would make the merger between the two companies legally valid, alongside giving Genel ongoing advice on legal and commercial aspects of the process.
Once the merger was completed, the Mayer Brown team was also involved in the subsequent listing of shares in the newly merged business, now called Genel Energy plc, on the London Stock Exchange. Vallares' shares were already listed there, but the merger required the new business to relist which, while not as complex a process as a new listing, was still "very lengthyâ€, says Rob - "we had to draw up a prospectus to describe the business to potential investors in its shares, which is a large, detailed document describing the business and how it's financed, all of its key contracts, and the risks involved in investing in it.â€
These risks in this case included those always involved in investing in oil and gas companies - for example, that their reserves won't be as extensive as originally thought, or that technical issues will arise with the facilities constructed to extract the oil or gas. There were also some risks for investors specific to this particular deal, as Rob explains: "There's an ongoing dispute between Baghdad and Erbil, the capital of Iraqi Kurdistan, over whether oil contracts awarded by the Kurdistani government to companies like Genel are valid. This dispute is significant to investors because if these contracts are found to be invalid, investors in Genel will be unlikely to see any financial return.â€
This work on the merger and subsequent listing is typical of that done by corporate lawyers such as Rob. But Mayer Brown lawyers with expertise in a number of other fields were also involved in the deal. Mayer Brown's tax team made sure the deal was done in a tax efficient way, while regulatory lawyers ensured that the parties were in compliance with business regulation including prohibitions on bribery and anti-competitive practices. The assistance of lawyers with an understanding of Kurdistani law was also required, so Rob and his team collaborated with a Turkish law firm with this expertise.
Trainees played an important role in the legal work on the deal. Rob describes how those working with him in the corporate department were involved right from the early research stages: "One of the trainees played a significant role in our research into Vallares, looking at how the business was set up and how it operated.â€ As the work on the deal progressed, trainees continued to be a key part of the team: "They worked on both the merger and the listing, attending many of the meetings, helping to prepare and check the documents and generally learning about the process.â€
On deals like this one involving a large number of lawyers in various locations with different expertise and of different levels of experience, there are inevitable organisational challenges. How did Rob and his team keep things on track? "There's a high degree of project management involved to ensure everyone knows what's going on,â€ says Rob. His approach to running deals as a partner is all about "teamwork and co-ordinationâ€ - he likes to keep work groups small so that everyone can be fully involved rather that just working on an isolated piece of the transaction, and aims for everyone to be copied into relevant emails, to have easy access to shared folders of transaction documents, and to meet up for a team briefing at least once a day when work on a deal gathers pace.
But all large deals, however well-organised the lawyers working on them, tend to require some long working hours in their final stages. Says Rob: "It's a complex, multi-faceted process in which certain things have to happen at certain times - so sometimes there's no substitute for drinking lots of coffee, staying up late, and getting it done together.â€ But involvement on these deals brings many rewards for lawyers. There's the satisfaction of completing a complicated and high value job, which may well generate significant market interest - as Rob says, "I think everyone likes working on a deal which ends up on the front page of the Financial Times!â€ And once the deal is done, there are often some celebrations to enjoy - Rob and his team marked the signing of the Genel/Vallares documents at 7am in the morning with a leisurely team breakfast and, later, a few glasses of well-deserved champagne.