AUTHOR: Lorenzo Campanini
TUTORS: Prof. Crespi Pietro Giuseppe, Etzi Andrea
INTERNSHIP: SAIPEM S.p.A.
MASTER: Master in “Contract, Claim and Delay Management in Construction Works” a.a 2019/20
COVID-19 represents a whole new challenge for EPC projects, in particular for the Oil&Gas industry: from the demobilization of site personnel to the disruption of procurement activities, passing through a significant drop in oil prices, this sector is experiencing an extremely severe crisis. As a consequence, all the parties involved started looking for adequate contractual remedies, trying to mitigate as much as possible the impacts caused by the pandemic, both in terms of time and costs. In this regard, the figure of the Contract Manager covers a primary role in the administration of this issue.
This thesis, after a first description of the context in which EPC project lies after the COVID-19 outbreak, introduces the main contractual remedies applicable to an emergency of this kind, differentiating from common law and civil law legal systems.
Successively, a first case study related to an ongoing EPC project in Russia will be presented. In this case the contract has been signed few months before the pandemic, which allowed a massive recourse to remote working due to its early-stage situation. Nevertheless, many issues arose a later stage, requiring the attention of the parties’ Contract Managers, in order to set the borders between delays caused by COVID-19 and delays caused by other reasons, not contractually excusable.
Case Study No.2 – EPC Project in Africa
Furthermore, a second case study related to a newly signed EPC project in Africa will be presented. In this case the contract has been signed few months after the pandemic, which integrates an “ad hoc” attachment, aimed at mitigating the consequences of COVID-19. An in-depth description of this document will be made, highlighting all the features and criticalities from Contractor’s point of view.
In conclusion, some comments on the COVID-19 pandemic will be presented, as it could represent for Contractors both a risk and an opportunity. A risk due to the difficulties in the administration of complex issues related to either internal and external interfaces, notwithstanding the pandemic and its consequences, in terms of people and goods transportation. While from the other side, an opportunity to stand out respect to the other competitors, demonstrating to Clients the ability in dealing with situations of this kind, trying always to trace back the management of such matters in the field of contractual requirements.