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IACCM Contract Management Forum

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PRO Unlimited (Noble Energy)
2017-11-13 21:59:16

Indemnity Regimes in Midstream Contracts

Seeking advice from contracts drafters with experience on oil & gas midstream services contracts. Are knock-for-knock indemnity regimes common in midstream services contracts like they are in upstream services contracts? Thanks in advance for your responses.
 
 •  ThyssenKrupp Industrial Solutions (India) Private Limited (formerly Uhde India Private Limited)  •   2017-11-14 04:38:12
Dear Mark,

Yes. From my experience I can say that knock-for-knock or back to back indemnity is very common in midstream and also in downstream contracts.

Regards,
Rajesh
 
 
 •  PRO Unlimited (Noble Energy)  •   2017-11-14 14:36:20
Thanks Rajesh,

Much appreciated. Does anyone else have similar experience? And by knock-for-knock indemnity I mean "regardless of cause" even including the indemnified party's own negligence.

Thanks,

Mark
 
 
 •  ConocoPhillips  •   2017-11-14 23:52:40
Mark - I think it's fairly common but some operators in USA take a "small family" approach meaning that the "Company Group" does not include the other contractors of the operator this allows contractors to sue each other on a negligence basis - it also protects the operator in the event they are unable to get a contractor to accept knock for knock.

Hope that helps

Jim
 
 
 •  ThyssenKrupp Industrial Solutions (India) Private Limited (formerly Uhde India Private Limited)  •   2017-11-15 04:09:05
Hello Mark,

By knock-for-knock, I meant 'regardless of cause' indemnity including indemnified party's own negligence.

Regards,
Rajesh
 
 
 •   2017-11-22 11:09:17
FIDAC contract templates are used internationally and their indemnity provisions would be a good guide

fidic.org/node/7089
 
 
 •  PRO Unlimited (Noble Energy)  •   2017-11-22 15:40:44
Thanks for the suggestion about the FIDIC contracts. I have not used them and have not purchased them, but found a few articles about them and saw an excerpt of the indemnity provisions and they are negligence based, not knock-for-knock. Good to know. For now we plan to continue using a knock-for-knock approach, but we'll see how the service companies respond. Thanks to all who responded.
 
 
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