Project Management in the Oil and Gas Industry

6.4 The Importance of Contracts in Assuring the 
Quality of the Project
As discussed before, there are different types of contracts between the 
owner and the contractor as well as between the owner and the engineer-
ing office. Therefore, the contracts must be precisely defined by the nature 
of the project characteristics, which relies on the expertise of the project 
owner and its management. Bugs in the contracts will cause many problems 
and may be difficult to resolve, therefore wasting time and affecting the 
final cost of the project.
Therefore, it is recommended to review by knowing the objective of the 
project needs by highly experienced persons. A periodic specific review 
is required to gain a successful contract which will cover all aspects of the 
project without missing anything.
In general, the contract documents must contain the drawings and 
specifications for the materials, labor, and tools. The contracts must 
also determine the conditions of work on site and define the relation-
ship between the owner, the contractor, the supervisory, and engineering 
facility in the contract’s list of the quantities of each item and price.
There are some other basic items that are always overlooked by engi-
neers with the vision of their importance, such as requirements of health, 
safety, and environment (HSE) to be followed, security of personnel and 
determining how to behave with the expenses in the case of injury or 
disease at the site, calculating taxes, defining courts that are referenced in 
the event of disagreement, and other administrative items that are not less 
important than the items that have been mentioned in engineering details.
A stable regime for international contracts is a contract called FIDIC 
and to maintain consistency there is a specific form for most items. FIDIC 
is the reference for international contracts and is used in major interna-
tional projects.

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Project Management in the Oil and Gas Industry