Summary
Risk management in the era of high oil prices has become all- important. What are the factors involved? This final of a two-part series concludes.
EPIC contracts In managing these risks, the parties involved have historically started with the basic contracting strategy that is still commonly used: EPIC (Engineer, Procure, Install and Commission). This places all of the risks and interface issues on the contracted party. With today's mega projects, that much risk can be more than most contractors are willing to take on.See the full content of this document
Extract
Minimising Peril
There is now a trend toward contracts that include incentives, gain/risk share and flexible pricing. `For a drilling contractor making an investment in a newbuild rig, the safest contract might be a five- or six- year contract with a set dayrate, ensuring an acceptable return on the investment. But, with that strategy, they forgo the potential up-swing in the rig market. On the other hand, the oil company might ...
See the full content of this document
Sponsored links
