| Details: | Standard contracts are already saving the UK oil and gas industry up to £20 million a year but there is the potential for even greater cost-savings if more companies across the sector were to adopt their use, industry leaders Sir Ian Wood of the John Wood Group and Trevor Garlick of BP will claim today.
They will be speaking at the launch of three updated standard contracts at a reception for oil and gas companies at Trinity Hall in Aberdeen on 12 November 2003.
Widespread use of industry standard contracts, they will argue, speeds up contract awards as their familiarity increases in the supply chain and because they reduce the need for repetitive tender qualifications. Standardisation also creates greater consistency in contracting practice, especially in allocating risk. The net gain for both client and contractor are substantial savings in both legal and administrative costs.
Sir Ian Wood, Chairman and Managing Director of the John Wood Group, said:
"The use of standard contracts is growing across the UK oil and gas industry and this practice is to be strongly encouraged. The benefits are plain to see, with more and more companies coming to realise how these contracts can positively improve business efficiency. What is more, we are also beginning to see interest from overseas. Wood Group has recently concluded a major five year contract with Talisman Energy UK valued at some £250 million using one of these industry standards."
The first standard contracts were first published in 1997 as part of the CRINE efficiency drive and are now being updated to reflect changes in the law and developments in good contracting practice.
Today, there are ten standard contracts in circulation, covering Design, Construction, Onshore and Offshore Services, Well Services, Marine Construction, Mobile Drilling Rigs, Supply of Major Plant and Equipment, SME Services and a Purchase Order form.
The three new editions being launched next week are the contracts for Design, Construction and onshore/offshore Services work. They will shortly be followed by the second edition of the Marine Construction contract. The second edition of the Well Services contract was published in 2001 and work is in hand reviewing the others.
The contracts are managed by the Standard Contracts Committee operating under the auspices of LOGIC and are supported by PILOT's Progressing Partnership initiative with its Supply Chain Code of Practice, one of whose objectives is to increase their use across the sector. They are available from LOGIC at Exploration House, Offshore Technology Park, Aberdeen, AB23 8GX or their web-site http://logic-oil.com . |
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