Indemnification: Win/lose or win/win
Some of you may be wondering how an oil company employee came to be speaking on indemnity. I`ve been wondering that myself and have even considered the possibility that the conference thought it might be interesting to have a presentation in which the sacrificial lamb is led to the slaughter. I hope that`s not the case. I am not speaking today as a representative of Conoco or as a spokesperson for the operator perspective. I do not intend to tell you what position to take with respect to contractual indemnification. My purpose is to share with you some of my thoughts on indemnification and provide you with some perspective in which to consider your own objectives in structuring indemnities and evaluate whether your current positions meet those objectives. What is contractual indemnification? To some, it is a vehicle by which to transfer all the risk inherent in their operations to another party. Others view it as a means of protecting a deductible or self-insured retention. Some think of it as a bloodbath. There are a few who believe that it is a game in which the only way to win is to ensure the other party loses. The states of Texas and Louisiana believe contractual indemnities are {open_quotes}inequities foisted on certain contractors.{close_quotes} I would like to propose that indemnity can be nothing more than an economic transaction which attempts to allocate risk in a cost effective manner.
- OSTI ID:
- 269168
- Report Number(s):
- CONF-960107--
- Country of Publication:
- United States
- Language:
- English
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