Contract modeling of investment projects in the field of oil and gas construction

A.S Altemirova,I.V Burenina,V.S Litvinenko

doi:10.1051/e3sconf/202126606001

A.S Altemirova, I.V Burenina + Show 1 more

Open Access

https://doi.org/10.1051/e3sconf/202126606001

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Abstract

The purpose of this article is to select and justify the optimal contract model for one of the largest investment and construction projects of PJSC based on a preliminary assessment of the project under several alternative contracts. To achieve this goal, the following results were obtained: first, a classification of contracts for investment and construction projects (ICP) was developed, adapted to the specifics of the oil and gas business, second, the process steps for planning the contract model of oil and gas construction projects were formed, and third, a conclusion was made about the feasibility of using a particular contract model in terms of the project economy, its timing, the quality of decisions at each stage, and the risk management system.

Highlights

The research problem is reduced to determining whether there is a relationship between the contract strategy and the project indicators and, if so, how it affects the timing of its implementation, the quality of design decisions and the effectiveness of the risk management system
Contract models in the Russian oil and gas industry evolved from the classical model («Traditional Design-Bid-Build»), according to which the customer independently carried out the main design work and involved contractors only at the construction stage, to progressive EPC(M)-models involving the delegation of authority to general contractors and the transfer of responsibility and risks to them [1]
It is advisable to use it in projects for which at the contracting stage it is possible to prepare a hard price offer, when attracting a sufficient amount of borrowed financing, when the attention of the customer / investor is absorbed by other projects and does not have sufficient management resources to switch to a new construction project, or when proven technical solutions exist on the market

Summary

Introduction

The research problem is reduced to determining whether there is a relationship between the contract strategy and the project indicators and, if so, how it affects the timing of its implementation, the quality of design decisions and the effectiveness of the risk management system. The polar option of Lump Sum is the cost-recovery method (Cost + Fee), which, on the contrary, is the most risky for the customer and the least risky for the contractor It is recommended for use if it is not possible to formulate a clear price offer at the stage of concluding the contract, so it is easy to adapt it in reconstruction, modernization, expansion and technological re-equipment projects [11]. If the contractor is hired to manage individual stages of the ICP, it is advisable to conclude an EPCM-contract, or hire specialists with managerial competencies (MC) (site-managers, PMC, CPE-consultants, etc.) and pay for their services according to the cost-recovery method (Cost + Fee), because in this case the physical volume of work is not fixed rigidly by the specifications of the project and can constantly change. We get four models of customers for investment projects in the oil and gas construction industry: active professional (AP), passive professional (PP), active non-professional (AN), passive non-professional (PN) (Table 1)

Future project operator

Third party

Decommissioni ng

Findings

Standard EPCcontract