Canadian Lawyer InHouse

June/July 2020

Legal news and trends for Canadian in-house counsel and c-suite executives

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30 www.canadianlawyermag.com/inhouse FEATURE FOLLOWING A five-year downturn fuelled by court orders and pipeline constraints — and further enhanced by Saudi Arabia's price war with Russia — Canada's beleaguered energy industry has taken another blow amid the COVID-19 ripple effect. Social distancing measures implemented as a result of the pandemic have led to a significant decline in demand for oil and gas, forcing companies to slash expenditures to stay afloat. Many legal departments are examining contracts and exercising force majeure clauses to try and modify obligations during economy-crushing closures. "The COVID-19 crisis has posed challenges to producers because it takes a large number of bodies to keep oil and gas operations going and that work can't be done remotely," says Pat Maguire, vice chairman and Calgary managing partner at Bennett Jones LLP. "As a result of the oil price crash a few years ago, producers implemented significant cost reduction strategies already, so there is not a lot of fat to trim, but prices for services will go down as demand goes down, so there's some opportunities for companies there." In what Maguire describes as "a couple of bright spots," two major projects look set to continue. Despite objections from environ- mental activists and First Nations, work continues on Canada's Trans Mountain pipeline expansion project, which aims to almost triple the capacity of the existing pipeline system. The Alberta government has invested in TC Energy Corporation's Keystone XL oil pipeline, which is expected to transport up to 830,000 barrels of crude oil daily from Western Canada to terminals on the U.S. Gulf Coast. In other positive news, the federal govern- ment announced in April a relief package totalling more than $2 billion for the oil and gas sector to allow for the cleanup of inactive oil and gas wells in Alberta, Saskatchewan and B.C. and the creation of 10,000 jobs in the sector. As energy companies scramble to deal with health and safety, labour and employment and a host of business issues, in-house counsel are trying to stay ahead of the game to support their businesses. "Internal counsel will be well positioned to assist their companies in real time because they know the business and legal issues and will provide a lot of value," says Alan Ross, regional managing partner at the Calgary office of Borden Ladner Gervais LLP. "They should certainly continue to be live to business pressures that are facing them. Whether it's commodity price, health and safety surrounding coronavirus, employee issues or liquidity issues, a deep under- standing of the business will be very helpful." Energy industry battles unprecedented challenges Experts examine opportunities for in-house counsel at energy companies amid economic slump "There was never a better time than there is right now for people to recognize the importance of the nuclear world in generating electricity to keep lights on in hospitals and homes." Lynn Mahoney, Bruce Power

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