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Offshore Construction: Law and Practice

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Stuart Beadnall (left) and Simon Moore.

Stuart Beadnall (left) and Simon Moore.

Offshore Construction: Law and Practice. Pioneering new book by Stuart Beadnall and Simon Moore of Stephenson Harwood

By James Brewer

Far-reaching advice in an often overlooked area of law in the offshore energy sector is being offered through a new publication Offshore Construction: Law and Practice, a detailed review of key aspects by highly experienced practitioners at London-headquartered Stephenson Harwood.

It amounts to an extensive ‘knowledge bank’ in a field about which little has to date been written, and where a lack of case law is one of the biggest headaches.

Huge contract values, some agreed at record sums during peak oil prices, mean that disputes can centre round many millions of dollars.

Law and more, on Construction.

Law and more, on Construction.

The authors of the 370-page manual stress that anyone who might think that ready solutions to offshore construction disputes and dilemmas can be found through a simple ‘read-over’ of the law relating to merchant ship construction would be mistaken.  This is a specialist area of construction in its own right, surviving largely without the benefit of standard contracts.

Stuart Beadnall and Simon Moore, the principal authors of the work, introduced the publication to the London market at a reception on June 16 2016 at the law firm’s London offices.

The volume is the fruit of the considerable practical experience of the Stephenson Harwood partners and their colleagues, augmented through that last two years of intensive research and consultation.

Mr Beadnall, Mr Moore and their team received hearty congratulations at the launch for the first edition book from among others fellow legal practitioners, from businesses directly involved in construction, from sub-contractors, financiers, insurers and others service providers.

Although contracting of new structures has slid to a halt during the past two years as a result of the steep decline in fuel commodity prices and of company retrenchments, projects already under way have given rise to various disputes and calls for mediation, at a pace which has kept legal advisers in constant demand.

The publishers Informa Law (for Routledge) said that as 30% of the world’s oil and gas was produced offshore, the construction of specialist vessels was a crucial part of the industry, but “with exploration and production being performed in increasingly exacting locations, the scope for disputes arising from cost overruns, scheduling delays and technical difficulties is immense.”

During the launch reception.

During the launch reception.

The book contains detailed advice on avoiding and resolving disputes in related to the building of floating production storage and offloading vessels (FPSOs), drilling units, offshore support vessels and fixed platforms. It covers the entire process from initial concept through to installation, at each stage examining typical contract terms and offering advice based on real-life examples.

Design risk, changes to work, consequences of delay, acceptance tests, and termination are among topics thoroughly explored.

A chapter on intellectual property is especially valuable because few practitioners in the entire field of law and insurance have yet to give full attention to this hard-to-pin-down asset class.

The book was commissioned by CW Chung, who for many years was executive vice-president of Daewoo Heavy Industries of South Korea, a leading builder of offshore oil and gas installations. The authors say they are indebted to one of his senior counsel, Ji Young Lee.  “She has assisted us in ensuring that the legal principles of English law to which we refer are focused on the realities and practicalities of the offshore construction industry.”

Welcome at firm's Finsbury Square headquarters.

Welcome at firm’s Finsbury Square headquarters.

Contributions from Brian Corlett of Burness Corlett Three Quays, one of the leading specialist consultants in this area and from James McGregor, a pre-eminent naval architect for offshore structures, are gratefully acknowledged.

The Stephenson Harwood team working on the 370-page book included Rob Jacob, Eifion Morris, Jide Adesokan, Michael Bundock, Henry Burton, Owen Fry, Paul Hofmeyr, Alex Hookway, Kane Limbrick, Alex McCue, Emma Nowell, Theo Palmer, Teah Sloan, Joanne Champkins, Tom Adams, Mary Dodwell and Anthony Pitt.

The firm’s clients include many of the largest shipowners, shipyards, ship finance banks, marine insurers and International Group-affiliated P&I clubs, energy services companies, oil and gas businesses and commodities traders.

Stuart Beadnall, Joanne Champkins and Simon Moore.

Stuart Beadnall, Joanne Champkins and Simon Moore.

Mr Beadnall has substantial industry expertise, having previously worked as in-house counsel at BHP Petroleum and North West Shelf Shipping. He has been lead adviser on many FPSO projects for the North Sea, West African states and Australia. One of the few lawyers with expertise in floating storage and regasification projects, he was a member of the BIMCO sub-committee advising on the production of the LNGVOY, the first definitive voyage charter party designed for the LNG spot market, a form which was launched in April 2016.

Mr Moore specialises in insurance, shipping and general commercial litigation with a particular focus on disputes in the maritime and offshore oil and gas industries. He acts for London market and international insurers and reinsurers, advising on hull and machinery, war risks, P&I, builder’s all-risks, construction all-risks and energy package policies. In the offshore construction sector, he has advised on projects in southeast Asia, India, West Africa, South America and the North Sea.

Further launch events for Offshore Construction: Law and Practice are expected later in the year in Dubai, Singapore and South Korea.

For ordering details please see https://www.routledge.com/Offshore-Construction-Law-and-Practice/Beadnall-Moore/p/book/9781138799967

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