Annual Review 2009 - Watson, Farley & Williams

10 NATURAL RESOURCES
Natural resources
From a capital markets perspective, 2009 was
a tough and volatile year for natural resources,
with a trend to consolidate.
10 million
Number of barrels of oil
expected to be produced for
the Philippines by Galoc
MORE DEALS...
> Advised Coal of Africa Ltd on
£56.9 million fundraising.
> Advised Genesis Petroleum
Corporation plc on recommended
offer by Bayerngas Norge AS.
> Advised in high-profile KOGAS
project financing valued at over
US$481 million.
> Advised Atlantic on its potential
bauxite mining project in Vietnam.
> Acted for Credit Agricole CIB on
a US$60 million limited recourse
facility to finance an advance
payment for the supply of steel
products from an Indian exporter.
> Acted for the vendor in the sale
of its snow-white marble quarry
in Macedonia.
Despite this, there was activity on the AIM
market in this sector and we saw a moderate
increase in related work. Commodity price rises
in recent years have had a geo-political impact,
which has in turn led to considerable demand
for legal advice on trade and commodity
finance. A sustained increase in consumption
by developing countries will also continue
to exert a significant influence on global
economies.
In moves to secure supplies, clients in the oil
and gas sector have sought advice on M&As,
joint ventures and asset acquisitions.
SOUTH EAST ASIA OILFIELD DEAL
An oilfield in the South China Sea, close to the
island of Palawan, is the Philippines’ first major
oil development for nearly two decades.
Named Galoc, it is expected to produce 10% of
the country’s oil requirements for as long as the
estimated 10 million barrels last. Galoc is also
the first oil discovery in a sandstone reservoir
in the Philippines; previous commercial
production came from limestone reservoirs.
When Galoc Production Company (GPC)
– co-owned by Switzerland’s Vitol Group and
Australia’s Otto Energy – wanted to acquire
an additional participating interest in the field
from two minority partners, WFW Singapore
advised on how to structure the transaction
and also drafted the agreement.
Philippines-listed companies Alcorn Gold
Resources Corporation (APM) and PetroEnergy
Resources Corporation (PERC) sold their
respective stakes of 1.53% and 1.03% to
majority holder GPC and a handful of smaller
partners. GPC acquired the largest proportion,
raising its stake from 58.3% to 59.8%.
The cross-border deal involved complicated
issues of assignment of rights that had
to be effective under both English and
Philippines law.