EXTENSION OF TIME CLAIMS IN OIL AND GAS CONSTRUCTION PROJECTS

CCP Certification Technical Paper
EXTENSION OF TIME CLAIMS IN OIL AND GAS
CONSTRUCTION PROJECTS
December 25th
, 2016
AACE Membership Number 289940

2
TABLE OF CONTENTS
List of Figures ………………………………………………………………. 3
Abstract ……………………………………………………………………… 4
Introduction …………………………………………………………….……. 5
1.Event ………………………………………………………………….…… 5
1.1 General Conditions …………………………………………….…... 5
1.2 Particular Conditions ………………………………………….….… 7
2.Records …………………………………………………………….……... 10
3.Baseline Schedule ……………………………………………………….. 11
4.Liability ……………………………………………………………………. 14
5.Type of Claims …………………………………………………………… 16
6.Claim Preparation ………………………………………………………... 18
7.Response …………………………………………………………………. 19
8.Settlement ………………………………………………………………… 20
Conclusion …………………………………………………………………... 21
Bibliography………………………………………………………………….. 22

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List of Figures
Figure 1 “Critical Path Delay Analysis”.................................................. 13
Figure 2 “Time Impact Analysis“……………………………………….…. 15

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Abstract
This document is dedicated to projects especially in Oil and Gas field
wherein, in light of rapid and continuous development of the construction
process and under intense competition in order to acquire reasonable
profits, they are facing naturally lot of delays and disruptions which lead to
exert huge efforts for proving these delays.
As Extension of Time (EOT) claim involves countless of complex issues
and most often resulting with difference scenarios between projects parties,
establishing and presenting an adequate claim is essential for a contractor
as it must demonstrate its claim with substantiated evidences with
existence of all supporting documents that probably be reason of success
in preserving its rights and subsequently, gaining a full or partial
compensation (prolongation costs) with considering protocols that both
parties agreed upon for jurisdiction while occurrence of any delays during
the course of the project.

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Introduction
The Oil and Gas industry is one of the most critical and complicated
construction process projects especially, during construction phase as it
contains a lot of complexities and incessant implementations which it
requires experienced contractors that have special abilities to enable them
to work in unusual and interchanging atmospheres.
1. Event
In spite of considering all major and secondary factors that might
affect the work progress during the establishment of the baseline
schedule for the project, such as conducting contingencies reserves
for known events, schedule slippage will occur in some of the
activities that might affect the progress which it is usually named as
(EVENTS), some of these factors can be covered under the following
conditions:
1.1 General Condition
Generally, can affect all types of projects including oil and gas:
1- Force Majeure (Expected and Unexpected events)
2- Employees strike.
3- Inefficient time estimate for some activities due to low experience.

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4- Disputes due to ambiguity/discrepancy in the scope of work
between the tender documents and documents during construction
phase (for example responsibility matrix discrepancies)
5- Scope of work modifications/changes due to client requirements
and deviation in technical specifications.
6- Unavailability of sufficient number or skilled resources for activities
execution.
7- Delay in submission of construction drawings (IFC or AFC).
8- Frequent changing in engineering drawings/deliverables whether it
is client’s scope or contractor’s scope (In case of EPC projects)
that might be affecting commencement or continuation/completion
of the construction activities.
9- Failure to comply with project procurement plan which it will lead to
delay in delivery of material(s) or equipment in EPC projects.
10- Neglecting the non-working days (day-offs) during a year (National
holidays, Climatic holidays and Religious holidays).
11- Work suspension due to interface problem or payments delay.

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1.2 Particular Condition
Specified for oil and gas projects:
1- Work condition at site:
 Handling, demolishing and rerouting of underground and
above ground existing utilities neither mentioned in tender
drawings nor mentioned in any as built drawings for previous
executed projects that are located in the same place.
 Failure of selecting appropriate constructability method with
consideration of site condition and surrounding factors and
utilities.
 Issuing work permits with all related attached documents that
are time consuming for the issuance and renewal of permits
such as; Confined Space Entry (CSE), Job Safety Analysis
(JSA), Risk Assessments (RA), etc.
2- Health, Safety and Environment (HSE) precautions/requirements
which stringent than the ones in normal construction projects
such as the use of special Personal Protective Equipment (PPE).
3- Unanticipated Gas leakage (Specially H2S gas) in refineries
and petrochemical plants which it requires an immediate
personal evacuation.

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4- Strict security requirements at restricted areas (Brown Fields)
especially during personal entering/exiting the site.
5- Special studies required for Oil and Gas projects such as:
 SIMOPS: Simultaneous Operations Study, which is a
study that clarifying the flow of construction process with
consider other contractors within the same proposed
location of the construction and consider the interfering
activities within the same contractor scope of work that
require high professional coordination between all project
disciplines.
 HAZOP: Hazard and Operability, it is a study for identifying
all proposed risks that might be affecting project resources
during operation stage.
 HAZID: Hazard Identification, it is a study for identifying all
potential hazards and threats effecting safety of people
and environment.
 QRA: Quantitative Risk Assessment, is to identify the
potential hazards and their consequences which are
included evaluate risks resulting from these hazards (such

9
as fire, explosion and toxic release etc.) on human
population.
 SIL: Safety Integrity Level, is to identify risks to persons,
environment, assets and considering potential hazards
arising from the failure of safety instrumented systems and
associated facilities in the plant.
Usually these studies prepared during the commencement of
the construction activities and might be affecting the progress of
work; subsequently, will lead to modifying the constructability
methods which it depends upon the contractor professionalism.
These events are varies in terms of its impact on the project where it
can be classified based on types, degree of influence and ownership,
some events can cover its impacts before occurrence for example
contractor can absorb part of these prospective events by considering
additional time for some activities while schedule preparation in order
to cover any unexpected events that can affect activity execution
during execution stage.

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2. Records
The second stage in preparation of successful Extension of Time claims is
to record all the events during project phases irrespective of the importance
or worthless of the event. This stage is considered as the most important
step to prepare a strong EOT claim.
For documenting events in the project, there are many types of records
such as:
1- Daily, weekly and monthly reports.
2- Minutes of Meetings.
3- Official letters.
4- Transmittals and submittals.
5- Updated time schedules.
6- Electronic mails (which it will be considered as a secondary
document comparing to official letter).
7- Dated photos.
When recording the events, Contractor should take into consideration the
chronological order while preparing his database for the events which it will
support his claim, in this case client can easily understand the sequential
order of these events and its consequences that caused the delay in the
project.

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3. Baseline Schedule
The most important document that contractor can stand on it is the
approved baseline schedule which as is the most reliable document that
project parties could invoke in case of arisen disputes.
In spite of existence of time schedule in contract document but it does not
cover the overall construction activities for the project; thus, preparation of
detailed schedule (level three or level four time schedule) is essential and
to get approval of that baseline schedule especially in complicated projects
it needs to run of arduous negotiations where each party from the project
wants to shift the responsibility to the other party such as given permittivity
in the implementation of the activities by place some conditions for
execution, that condition is (Milestone).
Milestone is an significant event related to the beginning or end of activity
or set of activities for committing both parties of the project, for example
fixing material delivery date drives the client to deliver the material exact on
time otherwise contractor cannot commence the activity, in the other side
fixing pre-commissioning and commissioning date which oblige the
contractor to complete construction activities on time otherwise the plant
will be delayed from the production on the set time.
Creating measurements performance standards for the project is very
important as we have mentioned previously, with presence of approved
baseline schedule where we can measure project work performance on

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each periodical update against original plan and consequently, discovering
all present and predictable forecast deviations between the original plan
and the current project status; then, act accordingly. Sometimes all project
parties conform to change or modify baseline schedule in case of major
changes in project scope of work; therefore, new baseline schedule will be
agreed upon and all future performance measurements will be compared
with that new baseline.
In order to justify the deviations between original and updated plan,
contractor shall prepare delay analysis which consists of all incorporated
events that affected the work progress into all activities on critical path(s) of
the project baseline schedule from the start date of each activity until its
completion date and sometimes new critical path(s) could be generated as
a result of occurrence from these events. This process is known as Time
Impact Analysis (TIA) and usually can be displayed by bar charts with
these events causing the delay can be placed as new activities added to
the updated schedule in order to demonstrate the delay in one or more
activities; these additional events are named (FRAGNET) which will be
clarified in Figure (1).
Updating the time schedule in the early stage enable contractor to discover
any delay that might occur and its impact on the work progress. As the
contractor is recording all events from the beginning, contractor should
study each event that affected or might affect the schedule and segregate
all recorded events that might cause delays during work progress by

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filtering all events impacting the work progress at the project and evaluating
each event that could cause project delays and classifying these events
according to the responsibilities of each party; this step is (Event Liability
for the Delay).
Figure 1 — Critical Path Delay Analysis
(Case Study-Author previous project)

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4. Liability
Usually liability of the events that causing the delay can be defined in
contract documents which clarify the obligations of each party and based
on that, each party can claim the other based on the contract clauses; for
example; a client can be invoked to contract clauses regarding delays and
applying liquidated damages or penalties as result of contractor’s failure
due to its inability to implement its obligations and thus, all delays are solely
attributable by him (such as poor performance or delay in execution set of
construction activities), on the contrary from the Contractor as his position
more difficult to prove their eligibility to claim and here comes the
importance of recording all events as It is possible to guarantee the
contractors’ rights.
Sometimes it could be occurrence of two (2) events or more that
influencing the specific activity or more at the same time, Contractor should
specify liability of each party, consequently it may be considered as
concurrent delay and in that time, contractor is eligible for extra time that
extended beyond concurrently occurred if he successes to prove his
entitlement.
In Figure 2, we can understand how each party owns the reason for delay
and in which exact time it is affecting whether the starting or during

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PROJECT :
WORK ORDER NO. :
SCHEDULE REVISION :
PLANNED
DURATION
IMPACTED
DURATION
(Calendar Days) (Calendar Days) OTHERS HEISCO OTHERS
1 UG-CT-1000TO 1050 CABLETRENCH-REG.05 16-Feb-14
1.LATECLEARANCETO STARTEXCAVATION
2.DATESADVISED BYSC&T. 258 1-Nov-14 30-Dec-14 - 258.00 59 16-Apr-14 16 75 2-May-14 - 16.00 274.00 15-Jan-15 - 274.00
1)Subcontractor's LetterRef:L/0133,Date:13thOctober 2013
2)ContractorLetterRef:L-109,Date:22ndOctober 2013
3)Subcontractor's LetterRef:L/0208,Date:09thJune 2014
4)ContractorLetterRef:L-183,Date:14thJune 2014
5)MutuallyAgreedDates
6)Subcontractor's LetterRef:L/0225,0226,0227
7)MOM-WCR-048,049,050
8)E-mailcorrespondence(Date:15-Dec-14,04-Jan-15,07-Jan-15,10-Jan-15)
2 UG-CT-165TO 190 CABLETRENCH-TGTU.99 06-Feb-14
1.LATECLEARANCETO STARTEXCAVATION
2.DATESADVISED BYSC&T. 305 8-Dec-14 1-Jan-15 - 305.00 24 02-Mar-14 49 73 20-Apr-14 - 49.00 354.00 19-Feb-15 - 354.00
7)MOM-WCR-048,049,050
3 RD-PV-1000TO 1050 CONCRETEPAVING-REG.05 03-May-14
1.DELAYINSTART
2.DELAYINSUBSEQUENTACTIVITY(CABLETRENCH)
257 15-Jan-15 14-Mar-15 - 257.00 58 30-Jun-14 2 60 2-Jul-14 - 2.00 259.00 16-Mar-15 - 259.00
7)MOM-WCR-048,049,050
4 RD-PAV-100TO 150 CONCRETEPAVING-TGTU.99 11-Feb-14
1.DELAYINSTART
2.DELAYINSUBSEQUENTACTIVITY(CABLETRENCH)
399 17-Mar-15 4-Apr-15 - 399.00 18 01-Mar-14 40 58 10-Apr-14 - 40.00 439.00 14-May-15 - 439.00
7)MOM-WCR-048,049,050
5 RACK-FP-1000to1300 FIREPROOFING 26-May-14
DELAYINHAND OVER OFP/R INREG.05&TGTU-99FROMMECHANICAL&
E&I
265 15-Feb-15 5-Mar-15 - 265.00 18 30-Jun-14 39 57 8-Aug-14 - 39.00 304.00 13-Apr-15 - 304.00
7)MOM-WCR-048,049,050
6 UG-ICTR-200 PAVING-COMMONAREA 20-Jan-14
LIMITED OPENWORKFRONTDUETO SCAFFOLDINGREMOVALRELATED
TO MRTAWORK.
358 13-Jan-15 31-Jan-15 - 358.00 18 22-Mar-14 44 62 5-May-14 - 44.00 402.00 16-Mar-15 - 402.00
7)MOM-WCR-048,049,050
30-Jun-14 14-May-15 TOTALDELAYS= 318.00
UpdatedSchedule-Rev.02-FinishDateasof14May2015
EXTENSION OF TIMEREQUEST (EOT)
TIMEIMPACT ANALYSIS(TIA)*
Civil& BuildingWorks
XXXXXX
ORIGINALCOMPLETION DATE=
START DELAYS DURATION DELAYS TOTALDELAYS
LIABILITY LIABILITY LIABILITY
ACTIVITYID.SL.NO.
CRITICAL/NEAR
CRITICALACTIVITIES PLANNED
START
DELAYEVENT(S)
RELEVANT CORRESPONDENCES
IMPACTED
FINISH
IMPACTED
START
DELAYS
SUBCONT-
RACTOR
OTHERS
PLANNED
FINISH
SUBCONT-
RACTOR
DELAYS
IMPACTED
FINISH
IMPACTED
FINISH
TOTAL
execution of the activity and consequently, how it impacts the project
completion date.
Figure 2 — Time Impact Analysis
(Case Study-Author previous project)

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5. Type of Claims
When we are planning to claim, Contractor shall be fully aware of what he
wants from the owner's claim and is the claim value worth to and which type of
claim he will conduct as there are many type of claims such as excusable or
non-excusable and compensable or non-compensable, for excusable and
compensable, contractor is claiming for both time extension and prolongation
cost due to additional scope of work which in required more time and cost, and
for compensable claim sometimes client requests from the contractor to
accelerate the work progress by increasing the productivity; therefore,
contractor will add more recourses to crash the schedule and complete the
work before original completion date, and for excusable claim sometime
contractor requests additional time only if he delayed some activities and he
realized that more time to execute the activities are required or due to some
circumstances that are beyond contactor’s control that required extension of
time with acceptance from client to postpone completion date without applying
any penalties.
As it is globally standard, some contracts referred to FIDIC clauses in case of
disputes existence which are clearly identifying the right to claim for extension
of time or prolongation cost or both, there are some clauses regarding the
disputes in this field such as:

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1- Sub-clause 1.9 (Delay Drawings or Instructions) – Extension of time and
costs.
2- Sub-clause 2.1 (Right of Access to Site) – Extension of time and costs.
3- Sub-clause 4.7 (Setting Out) – Extension of time and costs.
4- Sub-clause 4.12 (Unforeseeable Physical Condition) – Extension of time
and costs.
5- Sub-clause 4.24 (Fossils) – Extension of time and costs.
6- Sub-clause 8.4(a) (Extension of Time for Completion) – Variations -
Extension of time.
7- Sub-clause 8.4(c) (Extension of Time for Completion) – Exceptionally
Adverse Climatic Condition - Extension of time and Costs.
8- Sub-clause 8.4(d) (Extension of Time for Completion), Unforeseeable
Shortage as a result of Government Legislation - Extension of time and
Cost.
9- Sub-clause 13.8 (Adjustment in Changes in Legislation) – Additional
Payment.
10- Sub-clause 16.1 (Contractor’s Entitlement to Suspend Work) – Extension
of time and Cost.
11- Sub-clause 17.4 (Consequences of Employer’s Risks) – Extension of
time and Cost.

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12- Sub-clause 19.4 (Consequences of Force Majeure) – Extension of time
and Cost.
6. Claim Preparation
In order to prepare strong and convincing claims, Contractor has to ensure
to properly prepare a log of all events that occurred during project life cycle
that affected the work progress by chronological order; then, contractor has
to incorporate all these events on the approved baseline schedule as
described before to check whether any implications were negatively
affecting the progress or not by using delay analysis method.
In case of existence of any impacts from these events, Contractor must
analyze each event to check which party is responsible of each event and
therefore, how owns the delay. Contractor has to notify the client regarding
each event that affecting the project work progress at such date with
clarifying all consequences of these events whether it will impact time or
cost or both.
Some contracts contain clauses that can be invoked in case of disputes
between owner and the contractor however, based on sub-clause 20.1

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(Construction Claims) mentioned in FIDIC, contractor SHALL notify the
client for every event that affecting the work progress within 28 days from
knowing about that event and if contractor notifies the client after 28 days
from knowing about that event, the contractor has no right to claim for any
consequences or implications that resulting from that event occurrence.
Also, based on the same FIDIC sub-clause, Contractor should send full
claim within 42 days from his knowledge about that event and that claim
should contain all demonstrated documents that proving the entitlement for
claim; such as correspondences, minutes of meetings, photos, contract
clauses that set for disputes and of course, the delay analysis.
Contractor can submit one or more claims based on the sequence of
events and their impact on the project also presentation of the claim should
be well prepared with chronologically manner.
7. Response
In the other side, owner has to replay whether by acceptance or rejection
based on its evaluation of contractor’s claim also based on sub-clause 20.1
(Construction Claims) mentioned in FIDIC; the owner (Engineer) in a period
not exceeding 42 days has to reply to the contractor by acceptance or
rejection and some time the engineer prepares a counter claim if he has

20
some evidences that demonstrating contractor’s responsibility for
occurrence of some events that causing project delay.
In this case analyzing these concurrent delays should be conducted by
both parties in order to specify liabilities’ owners and consequently,
reaching to a mutual agreement that concluded whether contractor is
entitled or not.
8. Settlement
Once receiving and analyzing contractor's claim by owner, project parties
will proceed with negotiations phase which will be the most difficult phase
in claim procedure as each party will defend his position.
In some cases negotiations do not lead to any positive result, both parties
should restore to trusted third party that both parties agreed on its
experience in this field.
Sometimes both parties invoked to third party experienced in claiming
issues that could be consider as representative of each party, some
claiming authors called this phase as Amicable Settlement.
In case of failure of the negotiations which included third party, both parties
will be invoked to arbitration which will be considered at the last stage in
claiming process and which requires a long time to be adjudicated.

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Conclusion
The success of Extension of Time claim is associated with many factors
especially in oil and gas Projects. It relies primarily on the experienced
Contractor in that field; however, the most important is to get approved
baseline schedule from client, chronologically recording all events and
notify the client regarding these events with their impacts as early as
possible.
In the meantime, Contractor has to evaluate the feasibility for preparation a
claim for Extension of Time or demanding prolongation cost or both as this
process requires professional expertise with exerting huge efforts to
demonstrate all arguments by valuable evidences in order to obtain
complete compensation.

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Bibliography
No. Description
1 Andy Hewitt, 2011
Construction Claims & Responses: effective writing & presentation
First Edition, John Wiley & Sons, Ltd
2 Andy Hewitt, 2016
Construction Claims Intensive Training Course
Kuwait, 24&25 September, 2016
Hewitt Construction Consultancy
3 Society of Construction Low, October, 2002
SCL Delay and Disruption Protocol
Printed by Printmost (Southern) Ltd.
www.scl.org.uk
4 Khaled Ahmed Ali Alnaas, Ayman Hussein Hosny Khalil,
Gamal Eldin Nassar, 2014, Article
Guideline for preparing comprehensive extension of time (EOT) claim
Volume 10, Issue 3, Pages (308 – 316), HBRC Journal
www.sciencedirect.com
5 Jeffrey Badman, 2008
Extension of time claims
Hill International Monthly Article
Construction Management Guide

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