Photo provided by Vinson & Elkins
The U.S. shale gas boom has dramatically affected everyone in the energy industry. Of the $317 billion worth of oil and gas deals struck in 2011, $66 billion were shale-related transactions, according to a recent Ernst & Young industry report. And Marcia Backus, the head of Vinson & Elkins’ Energy Transactions/Projects Practice, is right at the center of the current transaction boom. The Texas-based firm, which is widely known for its energy practice, reports that it has handled 60% of shale joint ventures in the U.S. in the last two years.
“In the last two years, I’ve spent a lot of time now working on shale transactions,” Backus said. “Energy has really been our key strategy. We started out in Texas and we’ve got more than 400 lawyers who spend a majority of their time working on energy matters. So wherever our clients go, we’re going to be there with them.”
Backus, who has been practicing in the energy space for 30 years, has represented a number of U.S. clients. But another transaction wave that she’s riding right now is the explosive growth in the number of non-U.S. companies, especially Asian national companies, investing in U.S. ventures. Recently, she represented Korea National Oil Corp. (KNOC) in its purchase of a $1.55 billion stake in a Texas shale oil block from Anadarko Petroleum Corp. The deal was the second-largest purchase of a U.S. oil and natural gas field and is the first significant investment by KNOC in U.S. shale.
Lawdragon: As the head of Vinson & Elkins' Energy Transactions/Projects Practice, how are you managing to differentiate your firm from others? In your view, what competitive advantage does your group and firm offer to clients that other firms don’t have?
Marcia Backus: Energy is a key area for our firm. We have more than 400 attorneys who focus on it. We really have the breadth and depth, and it is not just in the U.S. V&E has international offices in Asia, London, the Middle East, and we have expertise from top to bottom. We have many partners who are very experienced in every segment of the industry. V&E has associates doing due diligence who know what they are looking for. We have experts in practice areas including environmental, tax and maritime law - and all they do is energy! You can just imagine the value that can bring to clients, having the energy expertise and breadth of experience across different practice areas.
LD: Can you share a couple of interesting deal/transactions you’ve handled recently?
MB: I represented Korean National Oil Company in a joint venture with Anadarko. It was really the first significant investment they’ve made in the U.S. oil and gas industry. I also represented Reliance Industries, a company based in India, in Marcellus shale joint ventures. I’m currently representing Japanese, Chinese and Korean companies in shale joint ventures as well.
It’s been really interesting to represent non-U.S. companies doing business in the U.S. These companies have a lot of very bright and experienced people. But doing business in the U.S. oil and gas industry is quite different from doing business in any other place in the world. You have to translate how we do it here and what some of the issues are to people with a lot of experience, doing things in a fundamentally different way.
LD: What is the most pressing legal concern that your clients have these days?
MB: Liabilities are always talked about and the Deepwater/Macondo Oil Spill was really big for the industry. But I think one thing that clients really care about more than anything is what is "market", regardless of the transaction.
Clients want to know that they are being reasonable and that they are getting the most they can from a deal. But, a lot of these deals are not public in a sense that the documents aren’t filed. What you’d learn about them is just what you read in the paper - what price was paid and very few other details.
The deals are very complex, and unless you’ve been on the other side of the negotiating table you don’t really know how people have resolved issues. And that’s where the value of having a lot of experience comes in. We have worked on so many of the deals and V&E can offer a lot of insights. We know a range of solutions for many issues because we've worked on so many of these deals. We can tell our clients "this is market, this is not market", and we can stand behind that because we’ve worked on a lot of transactions and we’ve seen how those issues were resolved.
LD: What is the most interesting aspect of your job?
MB: Negotiating. I really enjoy that. Trying to really listen to what your clients need and what the people on the other side need and finding a workable solution at the end of the day. It might have been a hard-fought transaction, but if it ends with everyone being dealt with fairly and reasonably, that works really well for both parties.
LD: You’ve been practicing in this field for quite some time now. What led you to focus on the energy sector?
MB: My father is a geophysicist. He founded the geophysics department at the University of Texas and was the head of the Society of Exploration Geophysicists. Because of that, my father spent a lot of time with people in the oil and gas industry and energy was a natural for me. I grew up with 3D seismic maps on our walls.
LD: Why did you go to law school?
MB: As an undergrad, I double majored in History and German (and also took French). I picked German just to be different since everyone else was taking Spanish. But, I liked to argue ever since I was a small child and I thought that being a lawyer would allow me to do a lot of negotiation. I also wanted a job that would give me enough money to travel and be intellectually stimulating at the same time, which it has been since the beginning.
LD: Do you have any advice to young attorneys thinking of embarking in this field? Is it a tough industry to break into for women?
MB: Regardless of whether you’re a man or a woman in the energy industry, it is helpful to learn as much as you can about the energy business. It is really important to educate yourself about everything. The way I learned about the industry was through reading everything I could. People definitely need to read a lot to keep up with what’s going on. When I was a young lawyer, I also went to a lot of events and seminars on the energy industry and other segments of the industry and really tried to teach myself by listening to others as much as I could.
For young women, it sometimes takes a little bit more time to be taken seriously. But it is really helpful when you get a lot of support from your male colleagues. The energy industry operates based on merit, which is good. It is a wonderful and fun industry to be in.
LD: What do you do for fun?
MB: I love to travel — my two favorite places are Paris and Napa. I love to bike, and I go on a bike trip every year. I have no kids, but I have many nieces and nephews. My significant other, Mike, is a stockbroker and I have two dogs — little shih tzus.