IICJ Paper Contractual Frameworks: Case Study Between the Oil Companies and the FPSO Operators Gry, Bratvold, Legal Counsel, BW Offshore, Norway

The market for floating production storage and offloading units (FPSOs) has grown fast over the past decades. Although not untouched by the financial crisis, the FPSO sector recuperated relatively quickly, and the activity in the market is again high with a good outlook. The contracts regulating the operations of the FPSOs are typically either lease contracts or engineering, procurement and construction (and sometimes also installation) contracts, often abbreviated to “EPC(I)” contracts. The main subject of this article is the key risk factors under the operational lease contracts. In order to give some background to the presentation of risk management in FPSO contracts, I will present the main features of an FPSO and what the benefits of using FPSOs in offshore oilfield development are, before we move into the risk chapter. Finally, I will give a few examples of the typical challenges during the end stages of the negotiation phase. In the following, the owner and operator of the FPSO under a lease contract as well and the contractor of the FPSO under an EPC(I) contract will both be referred to as “Contractor”. The operator of the field, be it a national oil company, an independent oil company or a consortium of oil field licence holders, will be referred to as “Company”.
Author
Gry Bratvold
Gry Bratvold
Gry Bratvold works as legal counsel in BW Offshore. Before joining BW Offshore in February 2007, she worked in the Oslo and the London office of the Norwegian law firm Wikborg Rein. She has her law degree from the University of Oslo in Norway with a specialization in Maritime Law. She has also spent a residence semester at the Universidad de Granada in Spain.
Company
BW Offshore
BW Offshore is a leading global provider of floating production services to the oil and gas industry. The company is the world’s second largest contractor with a fleet of 15 FPSOs and two FSOs. BW Offshore has an excellent track record on project execution and operations and more than 25 years of experience. BW Offshore is represented in the major oil regions world-wide, with presence across Europe, Asia Pacific, West Africa and the Americas. The company is noticeably represented in key locations in the greater Americas region both in the US and the Mexican parts of the Gulf of Mexico, as well as on the Tupi field offshore Brazil. BW Offshore’s FPSO and FSO fleet also operates in Australia, New Zealand and Russia. The company is listed on the Oslo Stock Exchange. BW Offshore is part of the BW Group, one of the world’s largest maritime groups.
Country
Norway More
Area of Law
Contract More
Business Sector
Energy More
Month Published
September 2011 More
Edition
Vol. 4, No. 16, Summer 2011 More
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