What are the most significant cases and/or transactions that your legal team has recently been involved in?

In 2023, Wayra Energy enhanced its strategic vision after securing major upstream oil & gas contracts with the Ecuadorian State. While increasing crude oil production, we faced challenges negotiating service line clauses. These challenges forced us to broaden our legal perspective, beyond regulatory aspects, through extensive engagement with the oil technical area. Engaging key players in the oil industry was crucial for secure contractual relationships and anticipating future legal risks.

In a dynamic industry marked by rising Brent and WTI oil prices, we navigated challenges in selecting and negotiating specialised contracts from a pool of international and local bidders. Our technical and supplier management departments dedicated significant time to meet bidder demands, focusing on meticulous supplier selection and long-term partnerships.

Our legal team’s unique approach involves close collaboration with technical departments, enabling comprehensive legal insights and swift resolution of compliance-related issues, minimising operational disruptions and litigation risks.

Simultaneously, an unexpected tax provision imposed by the Ecuadorian government in 2022 and 2023 disrupted the investment sector, including the oil industry. In response, we developed legal strategies with external law firms to mitigate this tax impact, especially concerning foreign investments.

Navigating these challenges in the investment sector, particularly in oil, is a significant task. Devising multidimensional strategies to confront them with the utmost precision stands as one of the most important challenges for any legal team – this has been the case for us during 2023.
As we live in a fast-paced world today, what skills will a corporate legal team need to succeed in the modern in-house industry?

Hyper-specialisation presents a major challenge in today’s corporate world. While deep expertise can boost efficiency, it risks neglecting other critical aspects, regardless of a corporation’s size. This issue also affects the legal field, where corporate lawyers, focused on anticipating unforeseen legal risks, may isolate themselves from other areas while developing corporate legal strategies. Overcoming this narrow focus requires three crucial skills for a comprehensive corporate perspective.

Firstly, one must be open to multidisciplinary approaches. To avoid tunnel vision, consider factors beyond laws and contracts, such as the business’s nature, technical operations, finances, and relationships. Collaborating with various disciplines fosters comprehensive problem-solving based on legal knowledge and broader business insights.

Secondly, flexibility is present. Acknowledging the multidisciplinary nature of an organisation naturally leads to flexibility. Addressing problems with diverse variables in mind allows for solutions that accommodate different viewpoints. Corporate lawyers can provide legal guidance for varied decision-making, presenting multiple legal alternatives to mitigate a range of risks.

Finally, proactive behaviour is another important skill. Proactivity complements the aforementioned skills. By building strong relationships with company departments and understanding the business thoroughly, corporate lawyers can handle legal issues effectively. Their ability to spot critical details and foresee problems enables them to develop proactive solutions. These three skills are interconnected and can be used together and effectively with other soft skills that every professional must cultivate and develop, especially in this era.

What are some of the main legislative or regulatory changes that have impacted you?

In recent years, regulatory changes in countries like Ecuador have disrupted legal stability, impacting the private sector and investment environment. There are two key regulatory changes within the petroleum industry stand out.

Firstly, the Hydrocarbons Policy, implemented through Executive Decree 95 from July 7, 2021, to July 22, 2022, removed guaranteed legal security in the hydrocarbon sector, a significant shift. This change affected private enterprises that rely on stable contracts and had a profound impact on Ecuador’s legal and investment landscape.

Second, the introduction of a temporary corporate tax, enacted on November 29, 2021, under the Organic Law for Economic Development and Fiscal Sustainability, had adverse economic consequences, particularly in the hydrocarbon sector. This tax disrupted long-term development plans and created legal instability.

These regulatory changes had far-reaching implications for business and investment in Ecuador, eroding legal protections and affecting economic stability.