The effect of standardized pricing within the oil & gas aftermarket industry

Abstract

The Oil & Gas equipment on the Norwegian continental shelf is starting to get old and are in need for refurbishments and upgrades. The services regarding refurbishment of subsea XTs are therefore more and more sought after. With the extra work problems with the current way the contracts are handled in The Company gets more visible. The current contract structure consists of a standard refurbishment scope of work with the addition of at least one variation order throughout the duration of the project. These variation orders are identified mainly during inspection, as replacement parts and repairs are hard to identify before the tree has been examined. This thesis consists of both quantitative and qualitative analysis of the current contract management and costs in XT refurbishment projects within The Company. These analyses are used to discuss the effects of standardizing the additional work, and on how it may be added to the contracts standard scope of work. The thesis is mainly concentrated on the work characterized as additional work in the projects, and the effect of standardizing that work into a lump sum compensation contract.