Challenges of Oil and Gas Mega-Projects:Claims Management Process

摘要

One of the major challenges of oil and gas mega projects is the claims management process.This paper willdiscuss how claims,which arise during the lifecycle of a project,can be managed by both the contractorand by the procuring entity.This is particularly relevant to the industry with the recent Covid-19 eventsand its impacts.This paper will evaluate and discuss key risks in the implementation of a project-including project costescalations as well as time overruns and delays to completion of the project or its milestones-and themanagement of claims in relation thereto.This paper will also discuss how risks may be allocated where aproject may be derailed.Secondary impacts will also be considered such as a compromise on quality andpotential defects.Lastly,this paper will cover how formal disputes,which arise when claims cannot beadequately resolved,may be brought about and the best position the procuring entity and the contractor canput themselves in for such proceedings.This paper shall conclude that an optimised"life cycle"approach to procurement is essential.From thebeginning of the project,companies should carefully consider how risks are allocated,and from a practicalperspective,what the most material risks are that are either likely to occur or could have a significantimpact on the project,to ensure in particular that management of those potential risks and impact areadequately addressed in the project documents.During the life of the project there mustbe efficient contractmanagement,it is crucial for the project management team to proactively manage claims in real time toavoid disputes.Lastly,it is key that the company is prepared for formal dispute resolution proceedings byreviewing its position regularly and keeping options open.This paper draws on our legal expertise based on our vast experience in the field.Based on this experience,this paper applies that knowledge to what is critical in the management of claims throughout the lifecycle ofthe project.This will assist companies to allocate risk accordingly,mitigate and manage claims and preparefor potential formal disputes.