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LOGIC and BIMCO Decommissioning Contracts – A Practical Comparison

As published in Construction Law Journal, Volume 36 Issue 3 (2020) 36 Const. L.J. p. 207

Given the specific and unique nature of decommissioning projects the industry has called for a standardised contract – two have been provided, one published by LOGIC in December 2018, and another followed by BIMCO in September 2019. While the BIMCO form was drafted to be international and the LOGIC form based on the UK system, they were both drafted in similar terms and utilising many consistent aspects.

While similar in several aspects, closer inspection is required to understand the difference in risk allocation and administration between the two. The LOGIC form is based on the established LOGIC construction contracts, whereas the BIMCO form is based upon its WRECKSTAGE contract. As such each standard form approaches the contractual relationship from a different aspect.

Both contracts also introduce adjudication as a form of dispute resolution. This is an interesting step in the offshore O&G market, where UK statutory adjudication has not reached. Both forms incorporate the procedure set out in the UK Construction Act however the BIMCO form attempts to amend those provisions. In doing so the BIMCO form has created an unworkable adjudication provision and would therefore need amendment should it be used – it will be interesting to see whether adjudication is adopted in this sector. 

The LOGIC form is starting to gain traction in the North Sea. Whether the BIMCO form, which leans towards the Contractor in respect of risk, will be adopted is yet to be seen. In its “warm” status the Company retains the negotiating advantage. However, if the industry heats up the Contractors, with their in-demand lifting vessels, may well hold better cards. 

There is a saying in the UK, that one waits for an age for a bus to turn up and then several arrive at the same time. Well, as it may be with buses, it is also with standard form offshore decommissioning contracts.”
Charles Wilsoncroft, Executive Director, HKA

This publication presents the views, thoughts or opinions of the author and not necessarily those of HKA. Whilst we take every care to ensure the accuracy of this information at the time of publication, the content is not intended to deal with all aspects of the subject referred to, should not be relied upon and does not constitute advice of any kind. This publication is protected by copyright © 2020 HKA Global Ltd.

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