What is a Master Service Agreement?
A Master Service Agreement is an agreement common in the oil industry entered into between an operator or turnkey driller and an oilfield service company. The agreement does not bind the operator or driller to use the service company nor does it obligate the service company to accept work offered to it. However, the Master Service Agreement is intended to govern the relationship of the parties in the event that they do any business. A Master Service Agreement allows work to commence on a simple purchase order rather than having to negotiate a contract for each job. Master Service Agreements are typically drafted by the operator or turnkey driller and, not surprisingly, contain terms very unfavorable to the service contractor. Examples of these include responsibility for personal injury at a work site, responsibility for lost or damaged equipment, responsibility for damage to the environment, payment terms and lien rights of the service company in the event of non-payment. Through negot
