Drafting and Negotiating Energy Industry EPC Contracts

Course Description

Complex energy projects, whether off-shore or on-shore, are most commonly now delivered using EPC Contracts. Their increasing popularity in the oil and gas industry is partly as a result of the risk allocation clauses which effectively increase risk for a contractor. Exploration and production of hydrocarbons is a risk business and while there is great reward to be made, equally there can be significant risks of catastrophic losses if you get it wrong. EPC Contracts seek to more effectively share the risk and the reward whilst reducing interface cost and risk and giving a contractor more reward for his increased risk.

EPC Contracts though, whilst bilateral in performance of obligations, often involve multi-party participation and often operate trans-nationally involving a number of jurisdictions. Any professional involved in these contracts will have to understand the structure, formation and key clauses of these contracts to negotiate and draft agreements that will deliver successful outcomes and limit the risk for your organisation. In addition they will also have to have an understanding of the law of contract which underpins the whole contract

This practical and interactive workshop will explore what is needed for a first-class EPC commercial contract in the energy world, as well as the key components to an EPC commercial agreement.

Who will benefit

• Anybody seeking a clearer understanding of international EPC contracts’ terminology and EPC contract terms and conditions
• Anybody wishing involved in EPC contract formation
• Anybody looking to understand the legal rationale behind their EPC contracts in order to make better business decisions
• Operational Managers, Procurement Technicians and Operators, Project Managers, Project Engineers, management professionals, Contract administrators, end-users affected by the contracting process, purchasing managers, sourcing specialists, engineers

Why you should attend

Most international oil sector contracts are in some form of Engineer, Procure and Construct Contract – sometimes with Installation obligations added. Many professionals in the oil and gas industry will have daily experience of one aspect of designing, procuring or being involved in the construction element – even if it is only in a supervisory capacity. All of these aspects are looked at closely in this course. This is all with a view to managing and mitigating risk in the ultimate delivery of the project. In addition, you will acquire:

• Basic awareness of contract terminology is now regarded as a core competency
• Contracts become easier when the jargon is understood
• EPC contracts are contracts which can give rise to disputes if not properly managed
• You will feel confident when discussing the terms and conditions found in EPC contracts
• You will understand contract types and the allocation of risk by the application of terms and conditions

Key topics

• Legal systems and contracts
• Contracts and obligations
• Defective performance and breach
• What is an EPC Contract?
• Species of EPC
• Introducing the installation element
• Difference with Turnkey
• Reducing interface costs and risks
• Procuring the contract
• RFQ, RFP, Tenders
• MOU, LOI – what purpose?
• Good procurement practice
• Using bonds and other securities for performance.
• Drafting risk clauses
• Indemnities and Guarantees and Warranties
• Other Contract requirements
• Working out the specification and Scope of Work (SOW)
• Building in Service Level Agreements (SLA’s)
• Building a critical path
• Milestones and KPI’s
• Time at Large or Time of the Essence?
• Contract Management
• Within scope or variation?
• Variation / Change Clauses – real meaning in law
• Amendment – real meaning in law
• Remedies for Breach
• Liquidated Damages
• Suspension
• Termination
• Other remedies
• Arbitration as Dispute Resolution
• The Arbitration Framework and the Importance of the New York Convention 1958

Course details

• Blended learning using internet searches, videos, workshops, group sessions, and “edutainment”!
• There will be a case study every day on preparation of the EPC enquiry document, negotiating the agreement and arbitrating a dispute
• Accelerated learning techniques to improve understanding and long-term retention from a practitioner’s perspective
• EPC’s examined in depth and considered from a non-legal perspective, not a lawyer’s.
• Real life EPC clauses and contracts examined