Managing EPC Contracts
Estimated reading time: 6 minutes There are several key success factors to manage EPC contracts. These types of contract are often referred to as Engineering, Procurement and Construction (EPC) contracts or Turnkey contracts. A properly drafted EPC contract ensures the contractor have limited ability to bring claims for extensions of time and additional cost. Organisations are adopting a form of ‘risk transfer’ to achieve a sustainable competitive advantage in today’s competitive times. This involves outsourcing to make another party the ‘bearer’ of risk – i.e. appointing a contractor company that offers a ‘one-stop shop’ solution – to undertake the whole scope…
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Understanding Production Sharing Contracts
The Production Sharing Contract is one of the most significant form of legal contracts/agreement to be found in the oil and gas industry. The purpose of any contract is to establish the rights; duties and obligations of the parties are in terms of both performance and conduct. By definition, a Production Sharing Contract (PSC), or Production Sharing Agreement (PSA), is a contract between one or more investors and the government in which rights to prospection, exploration and extraction of mineral resources from a specific area over a specified period of time are determined. In other words, a PSC is an…
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Reducing Risks of Money Laundering and Terrorism Financing
Estimated reading time: 4 minutes Money laundering and terrorism financing are financial crimes with economic effects, and act as a threat to economic and financial stability. These illicit activities can discourage foreign investment and alter international capital flows. Hence resulting in welfare losses, draining resources from more productive economic activities, and even have destabilizing effects on other countries. In an increasingly interconnected world, the harm done by these activities is global. Money launderers and terrorist financiers exploit vulnerabilities in financial systems to facilitate their crimes. They work around differences between national laws and jurisdictions with weak or ineffective controls…
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Intelligent Pigging in Pipeline Pre-Commissioning Operations
Pipeline Pre-Commissioning Activities The main activities involved in preparing a pipeline for operation include filling, cleaning and gauging; hydrotesting; dewatering and drying. As in many other pipeline operations, pigs are the tool of choice in achieving these activities. Pre-commissioning activities cover the entire range to prepare a new pipeline. After the construction phase of the pipeline build, significant preparatory works is needed prior to being ready for service. Firstly, filling the line with water. In most circumstances, this will be required in preparation for hydrotesting the pipeline, and to demonstrate its fitness for service at the intended operating…
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The Gulf of Mexico and Opportunities for E&P in 2019
Estimated reading time: 3 minutes Geography of the Gulf of Mexico The Gulf of Mexico is an ocean basin and a marginal sea of the Atlantic Ocean, largely surrounded by the North American continent. It is bounded on the northeast, north and northwest by the Gulf Coast of the United States, on the southwest and south by Mexico, and on the southeast by Cuba. The U.S. states of Texas, Louisiana, Mississippi, Alabama, and Florida border the Gulf on the north. The Gulf is the ninth largest body of water in the world at a width of 810 nautical miles…
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What Is Gap Analysis?
Estimated reading time: 4 minutes Gap analysis is a set of techniques to examine and describe the gap between current performance and desired future goals. It is the comparison of actual performance with potential or desired performance; that is the ‘current state’ the ‘desired future state’. It’s a reporting process used to improve processes within various industries. Ultimately, a strong gap analysis process allows project managers to determine where the business is—and where it wants to be. An important aspect of gap analysis is its ability to identify what needs to be done in a project. Gap analysis can…
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Essential Safety Principles for Lifting Operation
Working with cranes poses many hazards, and unsafe working practices can result in injuries, fatalities and costly damage to materials. For example, machinery can injury people through various ways: crushing, cutting, shearing, puncturing abrading, burning, tearing and stretching, while the most common injuries are amputation, crushing, electric shock, hearing loss and ill health from hazardous chemicals or lack of oxygen. All lifting operations should have a lifting plan supported by a risk assessment. By categorising a lifting operation in accordance with its risk level and complexity, suitable controls can be applied to eliminate hazards or reduce risks. Frequent or…
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EPC Wrap Agreements in Power Projects
Estimated reading time: 4 minutes The increasing demand for energy has led to an intensification of competition – not only between organisations within the same sector (i.e. coal power generation), but also from the growing alternative energy markets. The rise of ‘clean’ energy has led to a concerted, yet diverse technological development within fields such as wind; tidal and solar power generation facilities. Given these factors, organisations seek different ways in which to achieve a sustainable competitive advantage relevant to one another. The private sector is learning more towards more Engineering, Procurement and Construction (EPC) contracts when taking on…
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Understanding Drilling Contracts
The Exploration and Production (E&P) segment of the international Oil and Gas Industry, is in all probability, the riskiest in terms of capital intensity, long payback periods; technological dependence and a host of legal/environmental compliance requirements. The drilling contract is one of the most important contracts for an operator. A drilling contract will allocate certain risks on a reciprocal basis (including personal injury, damage to property, certain pollution risks and consequential damages), regardless of fault. Other risks, such as well control, downhole pollution, loss or damage to the hole or downhole tools and reservoir damage, are often assumed by…
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Charter Party Contracts: Practical A-Z Guide to Laytime and Demurrage
A charter party (commonly abbreviated to “C/P”) is a document containing the written terms of a charter agreement between a shipowner and a charterer. The terms of the contract will depend on the shipowner, charterer and the market. Parties involved can also form their own terms of contract which would remain free from any other legal interference. There are three main types of charter party: Time charter Voyage charter Demise charter In a demise (or bareboat) charter, the charterer takes responsibility for the crewing and maintenance of the ship during the time of the charter. He assumes the legal responsibilities of the…
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