Author: Partner Andreas Slettvoll, Advokatfirmaet Steenstrup Stordrange DA
The extensive revision was carried out by a group of lawyers from different oil companies, including Steenstrup Stordrange’s partner and attorney at law Andreas Slettvoll (then general Counsel for Lukoil in Norway).
The project lasted for more than one year, and contains several material changes and updates. As an example, the risk management between buyer and seller has been fundamentally changed and the starting point is now a “clean cut” where the buyer assumes all risk regardless of such risk being related to the period before or after the effective date of the transaction. In our opinion, this “clean cut” reduces the risk of legal conflicts after closing, but also requires a higher attention and due diligence from the buyer – which in turn could result in the buyer gaining deeper knowledge of the asset in question.
Further, the seller’s warranties now also include a reference to the information in the data room. The regulations concerning representations and warranties and inter partes liability for breach of contract has been split into separate articles, and includes regulations on all remedies. Generally, the SPA is now considered to be more in line with industry practice over the last years since the initial publishing of a model SPA.
For any questions related to the revised SPA, please contact our partner and attorney at law Andreas Slettvoll. After serving as general Counsel in Lukoil, and also participating in the SPA working group, he has gained in-depth competence on license transactions.