Contract documents have to be concise, clear and complete. "grey areas" will lead to disputes over what was the original intention (especially when personnel involved in clarification meetings are no longer with the operation).

All contractor on site must be covered by compatible liability clauses but the scope of work and the type of contractor has to be taken into account. A local contractor cannot be expected to sign, or even understand, a similar contract with a major drilling contractor. A one page contract should be sufficient for this purpose.

Contract strategy should be developed with central office. Often a short discussion can save a lot of time and avoid many problems.

1 Contracting procedures

Procedures should be available for drilling, construction and transport contracts.

• contracts should always be based on the latest version of a "standard contract" which can then be tailored to meet the specific requirements. Contracts from previous operations should not be copied as they will contain alterations and omissions specific to that Company. Such modifications in the standard conditions of contract may be small and easily overlooked, but be very significant, especially insurance and/or liabilities clauses.
• For all the drilling services, the drilling department is responsible for preparing a) the scope of work and b) the price schedule. Both documents will be included in the invitation to tender by the contract department.
• Even for the smaller contracts, a draft of the proposed contract document should be included in the ITT.
• The attention of the tenderers should be drawn in the covering letter to the HSE related clauses in the contract, in particular to the safety responsibilities of the contractor. This avoids the situation of the contractor turning up without having taken account of the requirements, claiming not to have realised that they were necessary, and without any possibility of remedying the defect in the time available.
• Where it is considered appropriate the tender documents can be issued at a presentation where HSE and other important aspects can be verbally highlighted.
• It may be difficult to award the contracts based on a fixed scope of work as it is based on the mode of operation, which cannot be finalised until after discussions with the contractors. Bids should be prepared based on a proposed mode of operation but Contractor should be encouraged to submit alternative modes of operation/scopes of work, with corresponding prices.
• If more than one contract refers to the same operation, it is important to avoid overlaps and gaps in the scopes of work of the different contracts.
• In all but the simplest of cases clarification meetings will have to be held with short-listed tenderers, at which their specific ideas can be discussed, including any alternative proposals. By this method the experience of specialists can be obtained, and by discussion of the details of the mode of operation the most cost efficient procedure which each tenderer can propose will emerge.
• For lump sum contracts where the scope of work may change after bid submission it is necessary for the tenderer to quote unit rates for any potential adjustment together with the lump sum. This is particularly relevant to civil engineering contracts
• In any discussion or clarification meeting it is essential that the discussions are held with someone who is authorised to commit the tenderer, to have more than one Company representative present and to have minutes written up and signed immediately.
• Even for a very small contract, with a value well within the Country Manager or Department Head's financial authority limits, it is recommended to present the proposal at a tender board meeting and have the agreement recorded.

2 Site visits

• Depending on the situation, consider making as a condition of acceptance of a tender that a senior representative of the tenderer has visited the site. All the tenderers should be invited to a briefing meeting and also have the opportunity to ask questions. All the tenderers can be given the same information. This has to be done early enough to be used in the preparation of the tender.
• Minutes of the meeting must be prepared so that it can be used as a reference document for an award.

3 Inspections

If the performance of a contract is critically dependent on the condition of the equipment provided by the contractor, this should be inspected by a company representative at the "short-list" stage (land drilling rig, drilling equipment of an offshore rig, marine equipment of an offshore unit, tugs and barges, supply/stand-by vessels, land-transport units, materials handling equipment, civil engineering plant, etc).

4 Agency services

Clearing/forwarding services

A contract must be established with a local agent for the following:

• advice on local import regulations and customs tariffs;
• provision of intermediate materials storage prior to importation (bonded area);
• preparation of customs documentation;
• clearance of incoming air, land and sea cargo before forwarding to its destination;
• clearance of staff's personal effects;
• arrangements for the export of materials and staff's personal effects.

Such services will have a great effect on the operations. The agency should have good relations with the customs, and enough staff to expedite the documentation through the various port and customs offices. One-man agencies are cheap, but lack a back-up in case of unscheduled absences, etc.

Most agents charge fees based on a percentage of the value of the material being cleared. For high value items (drilling) it should be possible to negotiate a much lower rate, either lump-sum per transaction or a tonnage rate.

Different agents can be used for clearing sea freight and air freight.

Materials handling services

The contract should cover:

- warehousing and storage in open yards;

- provision of labour and cranes/forklifts;

- loading and off-loading of vehicles/ barges/vessels.

For working around the port a local operator will be necessary.

For operating and managing a materials base use an experienced international contractor should be used.

If land transport is involved in the rig move, consider extending that contract to cover base operations.

Purchasing/handling agents overseas

During operations many unplanned items will be required. This will be facilitated if an agent has been appointed beforehand in a city/neighboring with good airline links to the operating area. This may be essential in area that have very limited direct international links.

5 List of contracts

Typical contracts which an OPCO may require are for the provision of the services/ equipment/ material listed below.

Held by Country Manager

- Contract staff services

Held by drilling manager

- Drilling services

- Cementing services

- Directional Surveying services

- Deviated drilling services

- Coring services

- Well-head services

- Liner hanging services

- Diving services

- Explosive cutting services

- Rental of equipment not provided by the drilling contractor

- Offshore Surveying services

- Mud Engineering services

- Mud Logging services

- MWD services

- Wireline logging services

- Drill Stem Testing services

- Production Testing Services

Held by civil engineer

- Location and Access Road construction

- Materials base construction

- Survey Beacon Site and Access Road construction

- Onshore Surveying services

- Water well drilling services

- Camp services (if associated with construction activities)

Held by supply superintendent

- Helicopter Support services

- Fixed wing Support services

- Land Transport services (road and/or rail)

- Rental of Trucks

- Rental of Materials Handling Equipment

- Marine Transport services

- Materials base rental

- Materials Base Operations services

- Chartering of Supply/Anchor handling Vessels

- Chartering of other water transport vessels (Tugs, Barges, Fuel Barge)

- Rental of Yard Space at foreign consolidation port

- Clearing Agency services at foreign consolidation port

- Clearing Agency services, local, for air/sea freight

- Purchasing Agency services in central foreign location

- Tubular Inspection services

- Meet & Greet services

- Camp services if associated with materials base)

- Telecoms services

- Courier services