Are integrated contracts a driver for more successful projects compared to traditional discrete contracts?

Abstract

In recent years it has become more common to use integrated contracts between operators and service companies for offshore well construction projects. This thesis evaluates if the change from traditional discrete contracts to integrated contracts can result in a higher degree of successful projects for a specific service company. The experience used in this thesis has been collected through semi-structured qualitative interviews with the manager of contracts and proposals, and the authors own experience in this service company. Integrated contracts are normally more complex to administrate and involves higher risks for the service company, but these contracts also come with a higher reward compared to discrete contracts. The general experience is that integrated contracts can be a driver for more successful projects, as the service company has more impact on the method selection of the projects and has high incentives to deliver a project that is aligned with the operator’s objectives. The experience collected for this thesis was also compared to experience and research found in the literature regarding contract and project models. Most of the experience were aligned with the literature findings. However, the literature indicates that a single integrated contract is easier to manage compared to multiple discrete contracts. Experience from the service company indicates that integrated contracts are more complex to manage due to the complexity of contractual requirements.