Sector Increases Take-Up of Shared Industry Tools to Improve Efficiency

A rising number of companies are using shared industry tools developed by Oil & Gas UK and its subsidiary, LOGIC (Leading Oil and Gas Industry Competitiveness), to simplify procedures and improve the efficiency of working and commercial practices on the UK Continental Shelf (UKCS).

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

Ken Cruickshank, LOGIC’s 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 ten 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 UKCS to address situations when their pipelines will either cross or run in close proximity to one another.

Mr 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.

“We welcome the news that a growing number of companies in the sector see the benefits delivered by shared industry tools including those developed by LOGIC, which will help boost the cost effectiveness of UKCS operations. 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.”