Libya is reputed to hold the ninth largest proven oil reserves in the world (approximately 38% of Africa’s total proven crude reserves) making it a key player in the global energy market. Since 2011 however, the country and its energy sector has been in turmoil and there are currently two rival governments struggling for control over Libyan territory and resources. In this article, we highlight the five major legal risks currently facing companies operating in the territory (or indeed outside when handling Libyan crude exports). (more…)
WE KNOW ENERGY®
Ben James, Paul Jones and Jesse Wallin
Tracy London and Tom Swarbrick
The Government of Egypt has said that it must invest US$12 billion in the electricity sector over the next five years in order to meet the country’s urgent electricity demands. Renewable energy will be a key component, with investment in the sector anticipated to exceed US$10 billion.
In recent years, renewable energy projects in Egypt have been developed under four separate schemes. Two have followed a competitive bid process. Under the first scheme, the New & Renewable Energy Authority (NREA) procured 750 MW of wind power capacity and a further 10 MW of solar capacity. Under the second scheme, Egypt has sought to procure 450 MW of renewable energy supply on a build-own-operate (BOO) basis. (more…)
Philip Bezanson, Glen Kopp and Carolyn Robbs Bilanko
Attorneys from our white collar, internal investigations and regulatory enforcement team profile recent enforcement actions in the North African states of Morocco, Algeria, Tunisia, Libya, Sudan and Egypt. The report illustrates the need for ongoing caution from investors in the energy sector in the region.
- Morocco scored 39 on the Transparency International Corruption Perceptions Index for 2014 (hereafter the “International Corruption Index”), with 0 being “highly corrupt” and 100 being “very clean.” US regulators use the International Corruption Index as an indicator for directing investigation resources and for justifying countries that should receive additional scrutiny by corporate compliance departments.
- In its first FCPA enforcement action of the year, on January 22, 2015, the SEC reached a deferred prosecution agreement with The PBSJ Corporation. An officer for the Florida-based engineering and construction firm had offered to funnel funds to a company owned and controlled by a foreign official in order to secure two multi-million dollar Qatari government contracts for PBSJ in 2009. The foreign official subsequently provided the officer and PBSJ’s international subsidiary with access to confidential sealed-bid and pricing information that enabled the PBSJ subsidiary to tender winning bids for a hotel resort development project in Morocco and a light rail transit project in Qatar. The officer also offered employment to a second foreign official in return for assistance as the bribery scheme began to unravel and PBSJ lost the hotel resort contract. Once PBSJ uncovered the misconduct, it self-reported the incidents to the SEC, and agreed to pay $3.4 million in financial remedies.
- Political corruption and instability: Since ascending to the throne on July 23, 1999, King Mohammad VI has enacted a range of social, democratic, and economic reforms that have left Morocco more liberalized and stable than many of its neighbors. However, the royals retain control in a vast number of businesses in the area, and widespread corruption undermines investor sentiment and increases business costs.
Texas Regulators Take Robust Step Reacting to Reports Connecting Seismic Activity and Wastewater Injection WellsFriday, May 8, 2015 4:03 pm by Scott Sherman
Two members of the Railroad Commission of Texas recently said they will consider taking action against two wastewater injection wells linked by a recent scientific report to earthquakes north of Fort Worth Texas. Hearings have been scheduled for June, and the operators have been directed to “show cause” on why their permits should not be canceled, or perhaps suspended or modified, and the wells not be shut down. (more…)
Gregory Bopp, Robert Jacobson, Elizabeth McGinley, Curtis Beaulieu and Elizabeth Behncke
On May 5, 2015, the Department of the Treasury and the Internal Revenue Service (IRS) issued proposed regulations that provide much-anticipated guidance on the scope of qualifying income under Section 7704(d)(1)(E) of the Internal Revenue Code (Code) for master limited partnerships (MLPs) engaged in activities with respect to minerals or natural resources. The issuance of the proposed regulations is a significant development because private letter rulings (PLRs) historically have been the primary source of interpretive guidance on whether certain mineral or natural resource activities generate qualifying income.
Activities that Generate Qualifying Income The proposed regulations provide a new term – “qualifying activities” – to define activities relating to minerals or natural resources that generate qualifying income. Qualifying activities include both the activities specifically enumerated in Code Section 7704(d)(1)(E) – exploration, development, mining or production, processing, refining, transportation and marketing of minerals and natural resources (section 7704(d)(1)(E) activities) – and certain limited support activities that are “intrinsic” to the section 7704(d)(1)(E) activities (intrinsic activities). (more…)
David Perlman, Michael Brooks, Robert E. Pease and Jennifer Lias
This report summarizes material notices from CME Group and ICE Futures, with a particular focus on energy. It is not intended to be a comprehensive review of each and every notice issued by these Exchanges.
On April 21, 2015, the CFTC announced via press release that charges had been filed against a resident of the United Kingdom (“UK”), Navinder Singh Sarao (“Sarao”), and his company, Nav Sarao Futures Limited PLC, for price manipulation and spoofing. The charges came after a comprehensive investigation of Sarao’s trading activity by the CFTC, which included assistance from the SEC, DOJ, FBI, the CME Group, the UK’s Financial Conduct Authority (“FCA”), and Scotland Yard. The DOJ unsealed its own criminal Complaint charging Sarao with willfully engaging in a scheme to defraud, knowingly manipulating the price of a commodity, and knowingly engaging in trading practices in violation of CME rules. Sarao was arrested by British authorities shortly before the CFTC and DOJ charges were unveiled. (more…)