For understanding oil and gas claims and disputes prevention strategies, it is essential to consider the triangle of project relations. This triangle includes substance, process and relationships. Substance refers to all contractual rights and obligations, which incorporated in the contract. The second part is process and procedures and third part refers to maintain good relationship between the parties. For the prevention of occurring disputes and claims, it is important to consider both the substance and procedure. We may have a balance win-win contract, but the improper procedures cause claims and disputes. For example the other party may claim only due to lack of being notified properly or on time. Thus preventing mechanisms are
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Procedural measures and strategies:
1- Communication of potential problems at the earliest opportunity:
The longer a potential problem or claim is allowed to go on the more likely it is to escalate and the less likely it is that the matter will be resolved without a dispute. The advance warning of a potential problem or claim has the advantage of avoiding surprise by the other side and it enables the parties at the earliest opportunity to consider solutions to avoid or minimize the impact of any potential claim.
This process requires the contractor to give the other an early warning as soon as they become aware of any matter that can give rise to an increase in price, delay completion or impair performance of the work.
2- Reporting:
Employers can take (out of contract) measures for reducing potent of claims. Submission of progress reports by contractor is one of such measures. If contractors inform employer for their current activities and volume of future works(for example in coming weeks), the employer can predict claims and prevent them.
3- Documentation system:
The main part of claim management is attributed to the good documentation. Claim mangers shall provide a comprehensive and reliable set of documents and evidences for the project. These documents are including tender docs, correspondences, notifications and
Procedural measures and strategies:
1- Communication of potential problems at the earliest opportunity:
The longer a potential problem or claim is allowed to go on the more likely it is to escalate and the less likely it is that the matter will be resolved without a dispute. The advance warning of a potential problem or claim has the advantage of avoiding surprise by the other side and it enables the parties at the earliest opportunity to consider solutions to avoid or minimize the impact of any potential claim.
This process requires the contractor to give the other an early warning as soon as they become aware of any matter that can give rise to an increase in price, delay completion or impair performance of the work.
2- Reporting:
Employers can take (out of contract) measures for reducing potent of claims. Submission of progress reports by contractor is one of such measures. If contractors inform employer for their current activities and volume of future works(for example in coming weeks), the employer can predict claims and prevent them.
3- Documentation system:
The main part of claim management is attributed to the good documentation. Claim mangers shall provide a comprehensive and reliable set of documents and evidences for the project. These documents are including tender docs, correspondences, notifications and