This Article 11 belongs to GICHD made by DST Founder Mr.Nosov

Few clippings of our viewpoint to the Contracting in the oil/gas industry concerning

the Clearance of Land in support of Upstream Sector

Introduction to the industry and the requirements for demining activities

There are two major components within the oil and gas industry; upstream and downstream. The process known as upstream has two constituents: extracting the oil and refining it. The commercial side of the business is known as downstream, which is the marketing and delivering of oil or gas to the end-users and buyers. However, in this chapter, we will be focusing on the upstream component.

Upstream

Oilfield services and worksite preparations can take place in mine-affected regions in a post-war situation. In these cases, demining and clearance as a component of worksite preparations are necessary.  In such areas and settings, the role of demining organisations is…..

·      to support seismic surveys and clearance of;

mined oil well pads

shafts

any other areas required for the extraction of oil and gas

·      to carry out clearance to support logistics field services such as:

line-up of pipeline transportation systems

establishing camps for oilmen

constructing worksites, well pads and more

 Caption: Oil extraction

Legal entities of the oil and gas industry are usually registered and managed through one of the following forms of ownership:

private

joint

public

There are international and national organisational and corporate structures. Independent of the form of ownership and incorporation, almost all major clients for mine action services use commercial firms to carry out oil/gas extraction operations.

The majority of world oil reserves and other minerals are owned by states or monarchies. There is a fundamental difference in the conditions of use of the existing oil reserves between private and national public companies………….

 Pre-tender and tender procedures

Commercial demining entities tend to compete for demining services in support of oil companies. This is explained by more flexible and mutually acceptable management systems and cultures between commercial bodies. International non-governmental organisations have also chosen to bid on a number of occasions, but have historically been less successful in winning commercial contracts in support of the oil and gas industry.

 Pre-tender phase

 The period following the contracting agency’s decision to start an oil or gas exploration in a region containing a suspected hazardous area, and before the granting of concession, is called the pre-tender phase.

Several possible causes influence the solicitation methods of the contracting agency’s tenders. Commercial interests and national governmental requirements (including public procurement law and other governing legislation) lead the methods of contracting agencies….

 Tender phase

For the last fifteen years, a significant portion of mine action contracts has been managed through various competitive tendering processes. But the tendering for demining in support of commercial oil and gas companies remains screened, and is accessible to only a few shortlisted bidders.      

The tender phase is a part of each oil exploration project. This phase starts with the submission of proposal requests to shortlisted bidders, and continues during the various stages, until such a time when a contract is awarded. There is not any specific adapted international standard for the tendering undertaken by commercial firms. It is regulated by national laws such as procurement laws, corporate statutes, owners’ solutions and/or the decisions of board’s….

In practice, contracting agencies prefer to tender for three types of contracts as follows. Contracts for:

 technical survey along with demining, EOD and MRE, if required

quality control

quality assurance and non-technical survey (if it was not complete before) 

 Payments

Budgeting for demining in support of the oil and gas industry is one of the most important and distinctive features of the contracting process. Managers of demining organisations frequently underrate the importance of correct, realistic and detailed budgeting.

In order to obtain large incomes from the oil industry for demining large areas, they frequently provide proposals with much too high an overall price. However, most of principals of the industry are big commercial fittings that will not waste their own resources and carefully will consider expenditures versus expected profits. Contracting agencies aim towards saving financial resources as much as possible by budgeting for non-technical survey projects in the pre-tender phase. Exploration, site preparation costs and extracting capacity are kept to a minimum, until the quality of the oil to be extracted is known…..

 Demining in support of seismic surveys

 Seismic survey measures the earth’s geophysical properties, through seismic waves.    

The oil and gas industry uses several different computerised methods of seismic survey, which vary, depending on:

types of waves and oscillation frequencies

geophysical properties

the stage of :

the exploration process

assigned tasks

geographical, climatic and surface conditions

resources

the technical methods used most often by the oil company

 The methods of seismic survey are normally referred to as 1D, 2D, 3D, 4D……

 Caption: Vibroseis trucks

Preparation work and coordination with the contracting agency and other related professionals involved in conducting and supplying the 3D survey should be organised within the demining organisation in a manner similar to that of the 2D survey described above.

There is however, a significant difference in the size of the areas to be cleared. Demining for 2D involves clearing stripes which are used for both the vibroseis trucks and the receiving points where cables have been laid. Demining for 3D also involves clearing all stripes, but every pass for geophone cabling must be cleared as well

 Clearance of well pads and ventilation shafts

The explosive ordnance disposal clearance of well pads and ventilation shafts can be one of the most technically complex and demanding operations EOD technicians in support of oil/gas industry have to carry out.

It requires developing safe procedures, along with a detailed understanding of the design and make up of well and shaft systems, and it should only be undertaken by appropriately qualified EOD personnel. It is not a task for deminers or other field staff. Main functions, methods and approaches to clearing wells and shafts correspond with contracting agency guides on clearing dispersed constructions or heavy vehicles. The GICHD Technical Note on Clearance of Armoured Fighting Vehicles may be used as a general reference. 

Time aspects

Continuity resources of all commercial companies are under pressure due to market conditions, competition and operational requirements. The time aspect is of the highest importance and must be aligned with current market requirements. Commercial operators must have a full understanding how the oil and gas industry works, what drives it, and the requirements for timely delivery of demining services.

Quotation of oil price is set by stock of petroleum exchanges, and depends on the oil supply in the upstream sector of the industry, and the consumers’ demand. The majority of concluded contracts for oil supply are the futures contracts

Specifics for demining contracts in support of the oil/gas industry

 Oil companies are assumed to be free to enter into contracts with demining organisations.  Every such agreement is implicated as a business contract with inherent terms and definitions, and can be full of the legal jargon of the industry. The below is not supposed to explain this jargon, but a few very important terminologies should be mentioned to aid a better understanding.

  Liability

Spot liabilities are commitments for purchased goods or contracted services that must be paid for by the company within a month

Current liabilities are commitments that will be paid by the company in one year or less

Long term liabilities are commitments that will take longer than 12 months to pay off

‘A Guide to Contracting in MA - Second Edition’, in particular Article 11, by GICHD 2012. 

back to main page