Oil & Gas - Contract Management
Course Code: OG.4
Subject: Oil & Gas
Course Fee: £2950 + VAT (20%)
The petroleum industry depends on contractors and other suppliers to provide the skills and resources for many parts of the supply chain. Upstream activities, such as seismic surveys or drilling, or downstream work, carrying out turnaround tasks in in the refinery, frequently require involvement from specialist contractors and sub-contractors. In a world where oil prices are volatile, it is even more important to be efficient and effective in creating appropriate contractual relationships, and then managing them to ensure high-quality performance.
This one-week programme gives delegates deep insight into the important aspects of working within a contractual relationship in the oil and gas sector: for example, how does the contract management function ensure its subsea equipment maintenance contractor delivers what he has promised? How can the procurement manager change a construction contract if he discovers that the scope of work has become out of date? How would a commercial manager set about negotiating a proposed price change when the pipeline contractor says that his costs of labour or materials have gone up? These and many other important topics will be examined and lessons learned from case studies, contract templates and real-life experiences drawn from the oil and gas industry.
Who should attend?
- This is a stimulating and practical course designed for directors, managers, senior executives and decision makers involved in strategic and operational functions, including managers of procurement, finance, legal, risk and supplier relations and who want to understand how to maximise competitive advantage in the Oil and Gas sector.
- To lead and manage procurement processes and contract discussions and negotiations
- To identify risks that contracts should address
- To employ contractual tools and techniques to increase competitive advantage
- To appreciate the importance of typical standard contract terms and conditions
- To initiate and develop better commercial contracts within their organisation
- To learn to look for key elements of commercial contracts
- To improve supplier performance through better contracts
- To plan and manage the resolution of contractual disputes
Managing the Purchasing Process
- Overview of purchasing best practice
- Creating interest from the market in your opportunity
- The statement of work for an oil services contract
- Results-based purchasing techniques
- Evaluating supplier proposals
- Is the lowest cost technically compliant bid the right one to choose?
- Moving from bid to contract award
Petroleum Industry Contracts
- Formation of the contract
- Express and Implied terms
- Typical features of exploration and production contracts and contracts for the supply of oil-related services
- 'Local content' contract requirements
- Knock for Knock Liability considered
- Anti-corruption measures in petroleum industry contracts
- Case study exercises using oil contract examples
Managing Contractor Performance
- Identifying and managing supplier risk
- Getting and maintaining supplier contract performance
- Service level agreements
- Setting SMART objectives (SLA)
- Key performance indicators (KPIs)
- Contract governance; managing contractual variations
- Why performance is Important and who is involved?
- Post contract closure action
Dispute Resolution in the Petroleum Industry
- Contract breaches and remedies
- Termination of contract
- Should we litigate?
- Using arbitration, mediation or conciliation as means to resolve contractual disputes
- Strengths and weaknesses of ADR as an alternative to litigation
- Dispute resolution scenario
Contract Negotiation Skills and Practice in a Petroleum Industry Context
- Preparing for the negotiation
- Understanding the position of the other side
- Negotiation roles and tactics
- Reaching an agreement
- Knowing your Best Alternative to Negotiated Agreement (BATNA) - what happens if the negotiation fails
- Negotiation role play