EPC, EPCM, & EPIC Contracts in the International Petroleum Industry
Course overview
As a general rule, the more complex or specialized the work or project, the more likely it is that design, engineering, construction and procurement will be carried out by independent contractors. Even the largest multi-national and State petroleum companies rely upon EPC Contractors with the technical skills and management experience to design build and commission complex developments and projects. Today, there is a trend towards tendering large, full-cycle EPCIC projects, particularly for offshore production.
This 4-day training programme on the variations of Engineering Procurement Construction Management and Installation (EPC, EPCM and EPCIC) Contracts that are used in the international petroleum industry.
Learning objectives
After attending this programme, participants will be able to:
- Understand the options for the types of agreements used for implementing large-scale petroleum projects.
- Discuss and apply decision-making criteria in tendering for EPC, EPCM and EPIC contracts.
- Understand the various considerations in adopting risk management strategies and the allocation and limitation of liability between Owners and Contractors.
- Effectively participate in the resolution of disputes that arise during petroleum operations.
The course is designed for
- Contract / Project Engineers
- Commercial Contract Managers
- Commercial Operation Teams
- Procurement supply chain professionals
- Risk Managers
- Lawyers and Paralegals
Course outline
DAY THREE
Performance Bonds & Guarantees
- On-Demand Bonds
- Parent Company Guarantee
- Letters of Indemnity
Insurance
- Primary Cover – Contractor’s All-Risk
- Special Endorsements
- Political Risk
Customs & Immigration
- Dutiable materials
- Entry of Non-resident employees
- Case Study: Adjustment of Delivery Point to Reduce Tax
DAY FOUR
Tax Considerations
- Project Package – Service & Supply
- Delivery & Title
- Tax Domicile of Contractor
- Tax Indemnity from Operator
Completion
- Testing & Certification
- Acceptance
- Passing Tile & Risk
- Warranties and Guarantees
- Intellectual Property
- Defects
- Exculpatory Clauses
Audit
- Reimbursable Payments
- Subcontractors
- Auditor & Audit Procedure
- Exceptions & Claims
Dispute Resolution
- Classification of Claims
- Procedures
- Communications Between Parties
- Impact on Relationships
Case Study: Alternative Dispute Resolution
Review Model EPIC Agreements: Norwegian Fabrication Contract 2007 & LOGIC Construction & Well Services
- Performance of Work
- Variations
- Cancellation & Suspension
- Delivery & Payment
- Force Majeure
- Limitation & Exclusion of Liability
- Proprietary Rights
DAY ONE
Use of EPC Contracts in the Petroleum Industry
- Contracting Options & Formats: EPC, EPCM, EPIC & EPCC
- Project Stages
- Contract Management: Scope, Schedule & Budget
- Completion & Handing Over
- On-going Operations & Maintenance
Relationship between Contractors, Operators, JV Participants & NOCs
- Operator’s Work Program and Development Plan
- Project Scope, Schedule & Budget
- Joint Venture Participants
- National Oil Company
Contractor Selection
- Frontend Engineering & Design
- Prequalification for Tender: Legal, Technical & Commercial
- Tender Package
- Evaluation
- Exceptions
- Local Content Requirements
- Awards
- Letter of Intent & Letter of Agreement
- Contract Execution
- Regulatory Oversight
Contract Milestones Issues Performance & Payment
- Notice to Proceed
- Mobilisation
- Progress Reports
- Completion & Acceptance
- Invoices
- Authorization for Variations & Extras
- Termination or Extension
Case Study: Critical Path Schedule & Project Tracking for EPIC
DAY TWO
Payment Arrangements
- Lump Sum Turn Key
- Unit Rates
- Progress Payments
- Milestones
- Bonuses
- Credit Memos
- Retention
- Multi-currency Payments
Contract Variations
- Client Request
- Contractor Recommendation
- Upselling
Risk & Liability
- Liquidated Damages
- Defects
- Downhole & Subsurface Conditions
- Environmental
- Warranties & Indemnities
- Limitation on Contractor Liability
Force Majeure
- Events: Definition & Exclusions
- Obligations & Notification
- Suspension & Contract Extension
- Termination
Case Study: Contract Variation Based on Substitution of Consumables

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