Interface Consulting Expert Provides Insight on Force Majeure Issues in Oil and Gas Industry Matters

HOUSTON, May 2, 2013 /PRNewswire/ -- Frank G. Adams, PE, president of Interface Consulting International, Inc., collaborated with Houston-based law firm Legge Farrow as part of a two-day EUCI course, "Contract Risk Management for Upstream Oil & Gas," April 29-30, 2013, held at the Houston Marriott West Loop.

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The EUCI course covered critical contracting issues facing the upstream oil and gas industry, both onshore and offshore. Glenn Legge, of Legge Farrow, and Adams co-presented two course sections on the first day of the seminar and addressed the following key issues from their unique perspective:

• Interpreting force majeure clauses in energy contracts
• Examining who is responsible for interpreting the contract
• Quantifying force majeure claims
• Determining the implications of declaring force majeure
• Mitigating dispute risks from force majeure claims
• Examining the interplay between force majeure and scope of work
• Weighing the benefits of litigation versus arbitration from an expert point of view

As part of the first presentation, "Force Majeure Clauses: Now What?" Legge offered legal insight and Adams provided an international construction perspective on force majeure events and associated force majeure contract issues. Adams and Legge addressed both the typical and unusual force majeure events covered under certain contracts; explored the contractual, legal, and financial implications of declaring force majeure; and presented contract language to address force majeure situations.

"What is important to remember about force majeure is that force majeure is whatever the contract says it is," said Adams. "The contract needs to specifically define potential force majeure events and prudently preface the list of force majeure events with, 'including without limitation.'"

In his second course session, Adams provided his perspective as both an expert and an arbitrator on a panel that discussed the merits and shortfalls of litigation and arbitration for oil and gas related disputes. The panel also included Rene Mouledoux of ExxonMobil Law Department and Marcheta Leighton-Beasley of Wood Group. Legge, as moderator of the panel, led the discussion with relevant industry topics on the facets of each dispute forum. As discussed by the panel, each dispute forum has advantages and disadvantages, and each participant provided their viewpoints on variables such as costs, discovery, confidentiality, and enforceability. 

Adams, who has testified in AAA, LCIA, ICDR, ICC, UNCITRAL, and VIAC arbitration forums, and also served as an arbitrator since 1986, emphasized that parties often fail to give significant weight to the fact that decision makers on the arbitration panel are typically professionals who are knowledgeable about the issues in dispute. Arbitrators have insight that jurors and judges do not typically possess, and can provide informed decisions and written explanations if requested to do so.

Contract risk management continues to be challenging for operators, contractors and service providers in the oil and gas industry. The EUCI course included 11 sessions to discuss the different types of contracts used in the energy industry, contractual risk allocation, and regulatory hurdles common to upstream energy transactions projects.

"Those attending the conference involved in onshore and offshore operations were able to address their most pressing contractual issues and gain valuable insight into the changing landscape in contract risk management," said Adams.

About Interface Consulting:

As engineers and construction consultants since 1986, Interface Consulting International, Inc. (www.interface-consulting.com), has provided a wide range of consulting and expert services to the construction- and energy-related industries in a variety of challenging settings – from the project field to the boardroom and courtroom. Interface Consulting is an authority on construction claims and construction management consulting with experience in more than 40 countries worldwide.

Interface Consulting International also produces a complimentary industry newsletter, Construction Headline News, and a corporate blog, www.RedHardHat.com.

CONTACT: Jessica Valor, 713-626-2525, [email protected]

SOURCE Interface Consulting International, Inc.