Business Models A range of generic business models were identified from: Traditional, e.g. traditional reimbursable and lump-sum approaches; to Transitional, e.g. target cost/incentive models; to Radical, e.g. Non-operator funded concepts. Appendix A examines these in more detail. To better understand why the more innovative execution models are not applied across the decommissioning scope and how this could be changed, the following blockers and enablers were identified. Business Models Blockers Enablers Lack of clarity OGA to improve sharing of actuals, emphasis on Lack of experience / fear of the unknown/ lack of duration and cost data oil and gas experience Explore other industry contract forms that Financial strength of contractors ability to carry discourage inappropriate behaviours – risk Legal advice sought on perpetual liability and tax Agreement on costing/estimates insufficient access for asset transfer models – benchmarking data Some models have limited applicability Long-term liability Access to tax-relief Lack of political appetite for change Some models require further quantification
Business Models A range of generic business models were identified from: Traditional, e.g. traditional reimbursable and lump-sum approaches; to Transitional, e.g. target cost/incentive models; to Radical, e.g. Non-operator funded concepts. Appendix A examines these in more detail. To better understand why the more innovative execution models are not applied across the decommissioning scope and how this could be changed, the following blockers and enablers were identified. Business Models Blockers Enablers Lack of clarity Lack of experience / fear of the unknown/ lack of oil and gas experience Financial strength of contractors – ability to carry risk Agreement on costing/estimates – insufficient benchmarking data Some models have limited applicability Long-term liability Access to tax-relief Lack of political appetite for change Some models require further quantification OGA to improve sharing of actuals, emphasis on duration and cost data Explore other industry contract forms that discourage inappropriate behaviours Legal advice sought on perpetual liability and tax access for asset transfer models
mer-uk-dtf-delivery-capablity-contracting-and-execution-model-workshops-v1.docx