Assignment Instruction: As a reservoir manager, you are certain to spend much of your time dealing
with companies that provide products, materials or services ranging from
downhole tools to simulation software to engineering expertise. You may also
work with research institutions, government agencies, other operating companies,
and even with private individuals. All of these working relationships are
governed by legal agreements, or contracts.
A contract defines the rights that each party has in
a business relationship, the obligations that each party has toward
the other, and the legal, fiscal and operating
terms under which these rights and obligations are
maintained. When properly drafted and negotiated in good
faith, a contract works to the mutual benefit and
protection of both parties. It is important,
therefore, that you understand and be able to apply
key contract provisions.
In this Learning Module, you will focus on two
types of contracts: a term sheet for a Turnkey
Drilling Contract with Daywork Provisions, patterned
after the International Association of Drilling
Contractors’ model (IADC--1998), and a Master
Agreement for Contract Services, patterned after
models developed by the IADC and the International
Association of Geophysical Contractors (IAGC).