Use of FIDIC forms in the oil and gas construction sector and possible amendments to the Yellow and Silver Books

Abstract

The International Federation of Consulting Engineers (FIDIC) forms of construction contracts are widely used in oil and gas transactions as they are considered to give the right balance to the interests of all parties and to have a degree of complexity in line with such transactions. Yet the standardization of the relevant content may represent a serious setback and force the parties to engage in exhausting negotiations aimed at tailoring the relevant content to the actual interests of the contracting parties. This article aims at providing a general overview of FIDIC construction contracts and their use in relation to the construction of oil and gas facilities, suggesting some possible amendments that contractors may seek in order to render the agreement more adherent to their needs. The article will only focus on the Conditions of Contract for Plant & Design-Build for Electrical&Mech. Plant&for Building&Engineering Works Designed by the Contractor (the 'Yellow Book') and the Conditions of Contract for Engineering, Procurement and Construction (EPC) Turnkey Projects (the 'Silver Book'),1 both included in the collection of contracts published by FIDIC in 1999 (the 'Rainbow Suite'2).