Shearman & Sterling has had its fair share of critics in the past few years, but a number of big-ticket deals and a breadth of practice areas are evidence of its continued success in the energy arena.
While doubters suggest the firm is losing its foothold in the Middle East and point to partner losses on both sides of the pond, co-heads of project development and finance Cynthia Urdu Kassis and Tim Pick insist energy is a growth area for the firm.
“With energy, we’re looking at the whole gamut from upstream oil and gas to downstream, power generation and distribution and, in its broadest sense, it’s one of our top three or four practices,” Urdu Kassis says.
One of the defining features of Shearman’s energy work is its hefty arbitration team, which continues to scoop major mandates in the sector.
An example is the ongoing $100bn compensation claim by the majority shareholders in Yukos Oil Company against the Russian Federation regarding an energy charter treaty, in which Shearman lawyers are advising Yukos’s three majority shareholders.
Billed as the world’s largest-ever arbitration, the high-profile case and its rulings are likely to have a major precedential value that goes beyond the present dispute.
As Urda Kassis says: “This case is representative of our arbitration practice, which is top-tier, and also ties in with foreign investment disputes, which is a big part of our practice.”
In response to industry criticism about Shearman’s standing in the Middle East, Urda Kassis and Pick point to big-ticket project financing deals, including advising longstanding client Dow Chemical on its joint venture with Saudi Aramco to develop the $20bn-plus Ras Tanura petrochemicals project.
“Dow is a significant client for us and we’re working with them on a number of significant transactions around the world – not only in the project area but also in M&A, arbitration and right across practice areas,” Urdu Kassis says. “It was a particularly important project with Saudi Aramco and it’s one of the largest industrial projects in this part of the world. It was also quite complex in terms of the technology and interconnections associated with it.”
South America is another energy hotspot for Shearman. The firm shared some of Cleary Gottlieb Steen & Hamilton’s glory in Petrobras’ historic $69bn stock offering last year, the largest ever.
The firm is the longstanding underwriters’ counsel to the Brazilian oil giant and acted as lead counsel to the global coordinators, joint book-runners and co-managers on the share offering.
“Latin America is a significant part of the world for us,” Urdu Kassis comments. “We have an office in Sao Paulo but we’re quite active in almost every major city you could list in South America.”
Africa is also high on the agenda. This year’s addition of Simmons & Simmons head of energy and infrastructure Christophe Asselineau to Shearman’s project development and finance group in Paris has proved a shrewd move in accessing new francophone energy work in the region.
Asselineau specialises in IPPs, mining and project finance, and the French, English and Australian-qualified partner brings more than 20 years’ experience in Africa.
“He was quite a strategic hire from our perspective and he’s already brought in a few deals in his first few weeks,” Pick says.
Another strategic move for the firm was assembling a global sustainable development group to build work in areas such as solar, onshore and offshore wind, nuclear, geothermal, biofuel, hydro and carbon trading transactions.
But what does Shearman say to the industry sceptics who keep knocking the firm’s global prospects?
“Looking at some of the big-ticket transactions we’ve been working on I don’t think it’s reasonable to say we’ve slipped,” Pick asserts. “We’re still at the top of our game. It’s not just about project finance, but also serving people on the capital markets and arbitration side.”
Christophe Asselineau, Emmanuel Gaillard
Top three sectors
Mining and minerals
Top three geographical regions
South East Asia and China
Dow Chemical’s joint venture with Saudi Aramco on Ras Tanura project
Client: Dow Chemical
Lead partners: Nick Buckworth, Ben Shorten
Brazilian state oil company Petrobras’ $69bn global stock offering
Lead partners: Stuart Fleischmann, Robert Ellison
Yukos Oil Company’s $100bn compensation claims against Russian Federation
Client: The three majority shareholders
Lead partners:Emmanuel Gaillard, Yas Banifatemi