Energy (Oil & Gas/Renewable)

The energy sector has a diverse range of industries including oil, natural gas, and renewable energy sources. This sector’s significance has grown in recent years due to geopolitical shifts, environmental concerns, and the evolving landscape of energy consumption and production. The U.S. is one of the world’s largest producers of oil and natural gas, making the oil and gas industry a cornerstone of the national economy.  

The oil and gas sector has seen a surge in M&A activity, driven by factors such as the need for operational efficiencies, the pursuit of technological innovation, and the shift towards sustainable practices. Before pursing M&A transactions, due diligence efforts must assess potential risks concerning the Foreign Investment Risk Review Modernization Act (FIRRMA) in the United States. Under FIRRMA, which revised the Committee on Foreign Investment in the United States (CFIUS) regulations, transactions involving critical technologies, critical infrastructure, and sensitive personal data are subject to heightened scrutiny. This includes investments in energy companies that could impact national security or infrastructure integrity.

The energy industry is regularly a target of Foreign Corrupt Practices Act (FCPA) investigations and enforcement. The FCPA consists of an anti-bribery provision and an accounting provision and is jointly enforced by the Department of Justice and the Securities and Exchange Commission. Additionally, anti-dumping and countervailing duty laws or other trade remedies may be invoked against imported renewable energy products that benefit from foreign subsidies.

As the global landscape evolves with shifting energy demands and environmental concerns, understanding the legal implications in the energy sector is fundamental to safeguarding its interests and promote a stable, secure, and sustainable energy future. 

Representative Experience

  • Preparing FCPA compliance policies and procedures for energy industry clients.
  • Serving as expert witness on sanctions matters in an international arbitration related to the construction of a power plant in Vietnam.
  • Conducting multiple know-your-customer due diligence reviews and advising on application of export controls and sanctions programs, including Russian and Iranian sanctions programs.
  • Advising industrial companies on the application of the Nuclear Regulatory Commission and Department of Energy export regulations.
  • Preparing responses to CBP requests for information related to pipeline products used in the oil and gas industry.
  • Advising a nuclear fusion start-up company on the application of export control regulations to its activities.
  • Advising companies in both the traditional and renewable energy industries regarding CFIUS jurisdiction over foreign investment.

INSIGHTS

Noteworthy FCPA Enforcement Developments

By: By Olga Torres, Managing Member
Date: 09/24/2024

The Department of Justice really wants violators of the Foreign Corrupt Practices Act (FCPA) to come forward: following a January 2023 revision of its Corporate Enforcement Policy that incentivized voluntary self-disclosure, the agency launched a DOJ whistleblower reward pilot program on March 24, 2024. 

Post-G7 Sanctions – Putting the G7 Leaders Concerns into Action

By: Donna Wedgeworth, Senior Trade Advisor
Date: 06/17/2023

In May 2023, the leaders of the United States, Canada, France, Germany, Italy, Japan, and the United Kingdom gathered in Hiroshima, Japan, for the annual G7 summit. The symbolic significance of these global leaders meeting in the city devastated by an atomic bomb on August 6, 1945, was very impactful, particularly to Japan’s Prime Minister, Kishida Fumio, a Hiroshima native. 

 

Alert on the Russian Oil Price Cap and Possible Evasion

By: Olga Torres, Managing Member
Date: 04/25/2023

The United States Office of Foreign Assets Control (“OFAC”) issued an Alert on April 17, 2023, warning U.S. persons about the possible evasion of the price cap imposed by the Department of Treasury on Russian oil.

Trade Alert: White House Announces New U.S. & G7 Actions Against Russia On One-Year Anniversary of Ukraine Invasion

By: Olga Torres and Alexander Dieter
Date: 02/24/2023

On February 24, 2023, the one-year anniversary of Russia’s invasion of Ukraine, the White House announced a series of actions that the U.S. and Group of 7 (“G7”) will take to support Ukraine and impose further costs on Russia.

Nuclear Regulatory Commission Suspends General License Authority to Export Radioactive Material to Russia

Date: 05/19/2022

On May 17, 2022, the Nuclear Regulatory Commission (“NRC”) issued an order, effective immediately, suspending the general license authority under NRC regulations to export radioactive material and deuterium for nuclear end use to Russia. Now, exporters of such material must apply to the NRC for a specific license to export to Russia.

A Crude Awakening U.S. Sanctions on the Russian Oil Sector

By: Olga Torres, Managing Member, Andrea Fraser-Reid, Senior Counsel & Derrick Kyle, Associate
Date: 10/22/2018

This article will discuss U.S. economic sanctions on Russia as enforced by the Office of Foreign Assets Control (“OFAC”), a government agency within the U.S. Department of the Treasury. Specifically, we will provide an overview of Directive 4 to Executive Order 13662 (“Directive 4”), which prohibits certain transactions related to the Russian oil sector.1 While Directive 4 does not prohibit all oil sector transactions with companies in Russia, it does create many potential obstacles for U.S. businesses. We will also briefly discuss Russian oil sector prohibitions administered by the Department of Commerce Bureau of Industry and Security (“BIS”).2 Russia and Texas are two of the largest producers of oil and gas in the world, and, because many companies involved in the petroleum industry in Texas have dealings with Russian entities or individuals, they are likely to be faced with sanctions issues. Below we describe some of the issues that need to be addressed prior to the commencement of transactions involving Russian parties in the context of certain oil exploration and production activities.

This article first appeared in the Newsletter of the International Law Section (www.ilstexas.org) of the State Bar of Texas, and is reproduced with the Section’s permission.