Crude oil price slump drives N. Sea contractors to make MER use of shared industry tools and standard agreements

A rising number of companies are using shared industry tools to simplify procedures and improve the efficiency of working and commercial practices in the N. Sea oil and gas industry.

More than 900 companies have signed up to the Industry Mutual Hold Harmless (IMHH) deed that operates on behalf of the sector to address the ‘contract gap’ which traditionally exists between different contractors working offshore.

NOW BOOKING: The 2016 UK Oil and Gas Collaboration Conference

The deed is administered by Oil & Gas UK subsidiary LOGIC (Leading Oil and Gas Industry Competitiveness).

Ken Cruickshank, LOGIC Managing Director, said: “With the UK oil and gas sector seeking every opportunity to improve efficiency to maintain competitiveness, the IMHH provides a mechanism for small to medium-sized companies to achieve cost effective risk management by clarifying the allocation of liabilities and costs for key areas of risk covering personnel, property and consequential loss and preventing multiple insurance of identical risks.”

Demand for LOGIC’s suite of 10 Standard Contracts has also increased. More than 19,000 downloads have been recorded globally since April 2014, with both purchasers and suppliers benefitting from the contracts which outline general conditions to help participating parties reduce bidding costs, eliminate duplication of effort and increase the efficiency of business processes.

In greatest demand is Edition 3 Services (On and off-shore) with more than 2,000 downloads. 

Newly available on the LOGIC website is the updated Standard Contract for Supply of Major Items of Plant and Equipment, covering the purchase of complex capital equipment including gas turbines, compressors and pumps.

Oil & Gas UK has now revised Standard Agreements for operators involved in the construction and operation of pipelines in the North Sea to address situations where pipelines either cross or run in close proximity to one another.

Cruickshank added: “Standard Agreements, updated to reflect new regulations and case law, provide all participating companies with terms and conditions to govern their arrangements, rather than developing their own individual contractual arrangements, while also ensuring their respective interests are cost effective and remain adequately protected.

“These actions align with pan-industry efficiency initiatives to help improve the international competitiveness of the UKCS, the principles of the Supply Chain Code of Practice and Government policy to maximise economic recovery from the basin.”

Oil and gas services company Amec Foster Wheeler has announced that chief executive Samir Brikho has stepped down. It has appointed chief financial officer Ian McHoul as his interim replacement. The company slashed its dividend by half in November as it attempts to survive a slump in oil prices – which are now below $30 a barrel

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed