Herbert Smith

The history of Herbert Smith’s domestic energy practice is rooted in the North Sea, when the firm advised on financings for a string of US companies entering the UK market.


Mark Newbery
Mark Newbery

More recently, despite its ­undoubted track record, rivals have criticised the firm for ­being ­primarily power based, claiming specifically that it ­suffered when key client EDF sold its UK assets last year for £5.8bn. Its response to this claim, as one might expect from a firm with such a fearsome ­reputation for handling ­disputes, is blunt.

“Absolute rubbish,” says global energy practice head Mark Newbery. “These days people realise that sectorisation works but we’ve been doing it for 15 to 20 years in the energy practice, and oil and gas has been a ­major component of our broader energy practice since the 1970s.”

The firm’s position as Chevron’s sole non-US panel firm as well as a client roster that includes the likes of BP, Hess and Marathon adds weight to Newbery’s pithy ­contention.

Indeed, Herbert Smith has handled a string of downstream disposals for Chevron recently, including the $730m sale of Chevron Limited to Valero ­Energy, on which partners ­Simon Tysoe and Stephen Wilkinson led, and the sale of its fuels marketing and aviation businesses to Vitogaz (a deal led by partner Henry Davey – who also advised on the EDF sale – and which also featured Tysoe).

Last year the transactional side of the ­practice did take a hit when it lost corporate ­energy partners Paul Griffin and John Geraghty to Allen & Overy (A&O) but, as Newbery ­argues, “that’s two out of 70”.

On the flip side ­Herbert Smith strengthened its ­London team in ­response to the increased deals activity in the sector with the hire as ­partners of two Linklaters counsel, Martin Kavanagh and Matthew Job.

Kavanagh takes the credit for bringing in one of Herbert Smith’s biggest current deals, the $40bn Browse LNG project in western Australia, on which it is advising the Australian ­operator Woodside (the ­company’s joint venture ­partners are BP, Shell, Chevron and BHP-Billiton). A team led by Asia head of ­energy Anna Howell is also ­advising CNOOC on its investment into BG Group’s Queensland Curtis LNG project.

Howell’s team is an integral part of where Herbert Smith sees the future of its overseas energy practice. Last year it launched a ­Beijing energy team to bolster the China practice, relocating Hong Kong ­associates ­Monica Sun and Hao Su to ­Beijing and firming up links with the corporate teams in the city headed by Tom Chau and Karen Ip.

The Paris office is also noted for its links to the Francophone Africa ­market in particular, while energy and projects work accounts for around of a third of its Madrid office. London ­finance partner David Wyles ­relocated to Madrid in 2009, while last year the firm hired banking partner Gonzalo ­Martin de Nicolas from A&O.

But there is a clue in the ­location of the firm’s biggest current project – Woodside’s Browse LNG deal – as to the ­location of its energy group’s top target for future growth.
The combination of ­Australia’s stable, developed economy and similarities ­between its legal system and the UK’s, coupled with its abundant natural resources and close proximity to China and South-East Asia places it at the heart of the energy group’s strategic thinking.

Sources at the firm say an ­office in Australia is “under ­review”, although others play down any merger talk, reported this May in The Lawyer, with partners claiming the country is “over-lawyered”.

What is certain is that the firm has another ace up its sleeve with its ­contentious ­capabilities. For US-based oil and gas companies in particular the combination of its ­international network, English law capabilities and sector ­specialisms, along with its ­disputes capabilities is a ­compelling sell.

Energy now accounts for around a quarter of total ­revenue, a big jump over the past five years.

Star partners

John Balsdon, Henry Davey, Jason Fox, Anna Howell, Mark Kavanagh, Simon Tysoe

Top three sectors

Oil and gas

Electricity/power

Mining and minerals

Top three geographical regions

Australia

Russia and the CIS

China

Top deals/projects

$40bn Browse LNG project, western Australia

Client: Woodside

Lead partners: John Balsdon, Martin Kavanagh

Downstream disposals for Chevron

Client: Chevron

Lead partners: Simon Tysoe, Stephen Wilkinson, Henry Davey

EDF’s £5.8bn sale of its UK distribution assets

Client: EDF

Lead partners: Henry Davey, Adrian Clough, Jennifer Bell