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Speaker
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Transcript
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Gregor Hayworth,
Director
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[Music]
Welcome to episode seven of Risk Rewired: The Energy Disputes podcast brought to you by Burges Salmon. I'm Gregor Hayworth, Director in Burges Salmon's Energy Disputes team and I'm your host for today's podcast.
We heard from Chris, Jess and myself in episode six on ADR and dispute resolution provisions in energy contracts, in this episode we're taking a bit of a change of direction. We wanted to focus on the role of expert witnesses in energy disputes and give a bit of an insight into life as an expert.
So today I'm very pleased to be joined by one such expert Mark Finch, founder and managing director of Ternan Energy. Welcome Mark.
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Mark Finch, Managing Director,
Ternan Energy
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Thank you Gregor it's great to be here.
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Gregor
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I thought it'd be helpful maybe if you wouldn't mind telling our listeners about your own kind of professional journey and how you became to be an expert.
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Mark
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Of course, no problem at all. So yeah Mark Finch, founder and manager director at Ternan Energy, I've been doing working in the offshore Industries for nearly 35 years now, unfortunately! I did Civil Engineering at Manchester University back in the late 80s, which was a great time to be a student, don't remember too much about the course but I do remember The Smiths and The Haçienda and the Happy Mondays and The Stone Roses, graduated in 1990 from Manchester University and joined a company called Fugro. They were doing offshore site investigations, so I spent three years with Fugro travelling the world on various vessels drilling boreholes in Africa and Russia and the Far East of America and South America, had a great time doing that. I met a guy that I'd worked with offshore and went to work for Brown & Root who are now KBR in Wimbledon, designing big oil and gas structures, this was mid-90s, worked for them for a while, went to Africa for a couple of years with Brown & Root to Congo did a lot of work down there, and then I was offered a three-month posting with their subsea arm who were called Rockwater in Aberdeen.
So I went to Aberdeen for three months and left 25 years later which is a very common in oil and gas. I was working for Rockwater water for a while, went to work for Coflexip all this work was subsea geotechnic so trenching, piling, dredging, rock dumping, this this kind of thing. Early 2000s joined a consultancy called Hydrasearch in Aberdeen, to set up their office in Aberdeen, they're now RPS, they were acquired by the RPS group just as I was leaving, and then in 2004 me and two ex-Brown & Root colleagues set up a consultancy called ISIS Energy, back in the day when it was acceptable to call a company ISIS, and that very quickly ISIS was sold to Senergy who were a wells consultancy contractor in Aberdeen and then Senergy were quite quickly bought by Lloyds LR, again doing a lot of geotechnical stuff and that's really first got involved in offshore wind whilst we were at ISIS sort of 2004/2005 was my first contact with offshore wind and then in 2016 we set up Ternan Energy.
So we're now just over eight years old. We're an integrated Marine geoscience consultancy so all things about the seabed, we're geotechnical engineers, we're geoscientists, geophysicists engineering geologists. There's about 20 of us now. We've got offices in Aberdeen, Edinburgh, Oxford and Brighton on the south coast, and we're probably doing 10 to 20% oil and gas work still but mostly offshore wind. So yeah it's been a, I really can't contemplate where the time's gone, but yeah 30, nearly 35 years in now.
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Gregor
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It seems like a really interesting career, I wonder then Mark how did you actually become an expert then? How did you work your way into that that line of work?
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Mark
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Yeah I mean like so much with my career it's been a sort of a series of coincidences where I've met people, but I'd obviously been doing the offshore geotechnics thing for you know the best part of 20 years, but I was at the offshore wind conference in Glasgow in must have been 15 years ago now, and I was standing in the coffee queue and I got chatting to the guy behind me and he worked for a company called Cadogans that have just that then quite shortly after that got bought by HKA, or merged into the HKA group, and I was chatting to him and he was asking me what I did and he went oh he said yeah we've got this thing where we might need somebody that knows something about subsea soils, and yeah that's how I first got involved in the expert thing. And before I knew it I was in an arbitration in Rotterdam with AES for some foundations of an oil rig and it kind went from there.
So you it's a bit once you've acted as an expert then other people find you and see that you've worked as an expert and it kind of a snowballs from there. So from that point I've probably you know been involved in 30 or 40 disputes, of which maybe 10 or 15 have gone to arbitration, and it's just become very well very normal is probably not the right way to put it but you get used to the process and used to the sort of the rhythm of how these things work and yeah it's been really I really like the expert witness role. I'm a big believer in you need to be working, in industry, daily practice working in the industry. I do, not to be critical of a lot of the guys that worked on the other side that have been the opposing expert perhaps, but you do get a lot of full-time experts which I always find is a bit strange in a way, you know if you're not working in the industry how do you know what's going on but then perhaps I would say that because I am working in the industry but so yeah that that's how I got involved in, interesting, it's funny how even after 30 odd years I still find it a bit odd being referred to as an expert but.
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Gregor
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So you mentioned your obviously managing director of Ternan, so what sort of work, expert services, are Ternan offering?
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Mark
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Absolutely yes, so Ternan in general as I said we're marine geoscience consultants, so advice about the seabed basically is what we do and we're quite a broad range of people from geophysicists, geotechnical engineers, geologists, engineer geologists, so we tend to help people who want to know about the seabed. So from early screening studies of large areas - we're doing a lot of work at the moment looking at the Celtic Sea for offshore wind farm developers, in a very high level sense of saying this part of the Celtic Sea looks very difficult for wind turbines because there's rock or large slopes and these are perhaps the soils you might expect - through to specification and planning of site investigation for clients that are wanting to build things offshore. So we'll specify surveys and we'll manage those surveys for the clients if that's what they want. We'll send people offshore to do technical supervision and then ideally we'll look at the data that comes back and advise how best to do the lab testing perhaps on the soils or the post processing on the geophysical data, and then we'll move into the engineering phase. Where we will do actual design of how big the foundation should be or we'll sit with the developers as their owners engineer and say well we think you should go to these people and then watch what they do and advise on the risks and things. So I suppose in a nutshell yes we do seabed advisory services but it's all about the risk management of building things offshore. You know the risks are quite significant if things are not done the right way or the correct way but there's ways to manage that risk and to lower the installation. It's, I would say, it's more about installation for us rather than design.
It's just about the understanding of the risk and it might vary from here to it's all about the uncertainty and how you deal with that in design. There's certain foundation types or things you want to do offshore that are a lot more sensitive to the ground conditions so you have to be very careful perhaps in certain places which foundation design you might choose.
There's a reason why most oil and gas platforms have got traditional tubular piles because they're very it's easy to cope with a lot of risk with a traditional pile. There's a lot more offshore wind farms, there's lots of structures oil and gas, there's two or three or four perhaps relatively small areas with offshore winds you talked about massive areas of the seabed that might vary significantly the costs involving surveying that seabed are huge and so the risks are huge. So, really I mean I would always joke that the two words you don't want to hear an offshore geotechnical person talk about is interesting and challenging. You want very, it's a bit like going on a flight, you want a really simple dull flight takes off and lands fine. It's a bit like that offshore wind. There's, you want a very straightforward, unexciting, unchallenging project, and it is possible. It's just a question of how it's approached.
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Gregor
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So you're obviously doing a lot of advisory work then for clients and that's obviously presumably pre-dispute, or hopefully there will never be a dispute, but it's as part of project execution.
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Mark
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Yeah so the vast majority of what Ternan does is the probably before the project is installed. It's the engineering up front, we sometimes get involved in the actual construction from a supervisory point of view but it tends to be the scoping and the screening and the engineering and the advisory and then yes it's largely then something I do is the expert witness work.
So this is where there's the two phases of course the, either during the claim stage before it's gone to adjudication or arbitration there's that role, and then there's the expert role during adjudication where the questions have been set and the it's a much more structured process. We, I, often get involved in the claims phase beforehand where the contractor is trying to make claims against the contract because of unforeseen ground conditions or issues they've had with trenching, or sitting with the developer who's received these claims from his contractor and trying to advise on the validity of the claims or how strong the case might be, or what the weaknesses might be, or you know just one part of should they go to arbitration or how hard should they push back. I mean I appreciate that the technical side is often one small part with the delay in the quantum perhaps but it's yeah I mean just last week I was in meetings with a developer and they were trying to work out themselves how they should approach the significant claim they've received from their contractor. Does the contractor have a valid case? Are they for want of a better phrase trying it on because it's very easy to claim for unforeseen ground conditions because there will no matter what size of site investigation you do or survey you do there will always be an amount of uncertainty, an amount of risk, so it's always possible to claim for unforeseen ground conditions, sometimes it's a real case often it's not it's, yeah, it's that's the bit that I find quite interesting the assessment of risk the balance of what's reasonable and what's not.
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Gregor
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Excellent, well maybe we can move on now to just talk a little bit more about the role of a geotechnical expert and obviously energy contracts you could have multitude of different experts that might be involved, today obviously we're focusing on geotechnical expert role, so I guess just for the listeners can you explain at relatively high-level what a geotechnical engineering expert is?
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Mark
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Yeah so it's somebody that knows about the physical properties and behaviour of the seabed and how the installation of things, so pile driving or trenching or dredging, anything that interacts with the seabed, how that's affected by the changing properties and then, as I was talking about earlier, how well we know those properties. What survey has been done to try and define how the seabed might behave, and then there's the selection of say a trenching tool or a pile driving tool or a sort of foundation you know the sort of site investigation you might need for a suction caisson is very different to one you might need for a gravity based platform or and as we move into floating offshore wind it becomes very interesting as well because you're then into anchors and deeper water and huge great sites with a variation and what's a reasonable interpretation of the seabed properties.
So when somebody goes offshore and tries to install something by putting in anchors or driving piles or trenching a trench for a cable, array cables or an export cable or whatever when that perhaps doesn't go according to plan why is that, there's hundreds of reasons why it might have nothing to do with the soil, you know the trencher itself might not have worked properly, or the driving of the piles the tools might not have worked but often it's because the assumptions that have been made in the engineering about the properties of the seabed soils are either not appropriate or too broad or too narrow or too, the trenching is taken a lot longer, there's reasonable endeavours clauses within contracts for you know speed and depth and have you met the cover requirement, so geotechnical people know all about the soil conditions and how different things might interact what's reasonable, what might not be reasonable, what's standard industry practice, what might you reasonably expected, it's these phrases like a competent contractor and industry standard and industry practice there's actually very few codes of practice really for geotechnical things they tend to be guidelines, and things where there's still a lot of interpretation in them, they're quite often European focused because that's where a lot of the work has been done traditionally especially in oil and gas. European region has got very variable soil conditions relative to perhaps if you go to Africa where there's lots of soft clay or the Gulf of Mexico or Brazil, you know there's some really interesting soil conditions in the Far East with cemented soils, and then you've got the loading on the foundations, you might get earthquakes in the Far East seismic liquefaction of the soil where it loses its strength if you shake it, so yeah all of those things how things that are put in or on the seabed can be reasonably expected to behave I suppose would be summary of it.
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Gregor
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Excellent, just kind of maybe moving on now to discuss you know when a dispute has actually arisen then so we're kind of out with the kind of normal confines of the kind of project execution and a dispute is arisen, what kind of disputes are you seeing generally, or what is the kind of most frequent thing that you'd be asked to advise on?
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Mark
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So definitely cables, the installation of cables so trenching is probably at least a half of the things that I see. So where trenching contractors or installation contractors haven't been able to meet the specification, how deep they can bury the cables. Been involved in a lot over the past couple of years of pile running, pile freefall, perhaps where piles are being driven then all of a sudden they'll drop because of you've hit weaker soil or for whatever reason, so for instance there's been a couple of projects in the UK where the big piles, the monopiles were designed to be a certain length they're being installed floating vessels and there hadn't been perhaps the focus that was needed on when you put the pile down, it will penetrate to a certain depth and then you put the hammer on and it penetrates again, before you start to drive the piles you've got to make sure there's enough length so you can still hold that pile up at the sea surface on a floating vessel, that's caused a few issues. So yeah there's been some issues with suction platforms founded on suction caissons, because suction caissons are a very clever way to have a foundation you don't get the noise from piling and all the rest of it but they're very sensitive to the soil condition so they're immediately higher risk so you need to be a bit more careful I've seen a few of those. And finally the drilling out of piles which have perhaps, it's either been planned so you drive, you drill out, and you drive again. Drill, drive is a planned scenario or where it's stopped unexpectedly, and you have to drill out hoping you can restart the pile. Drilling anything offshore I mean doing anything offshore into the soil is hard, drilling is particularly hard. So there's been a couple of famous French projects recently where that's been a significant issue and it's not you know these things are very difficult to do it's not that you know no one sets out on a project to get it wrong do they, it’s drilling large piles offshore in a harsh environment is a very difficult thing to do.
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Gregor
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The next topic that wanted to discuss with you, which is essentially what you think it makes a good geotechnical expert?
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Mark
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I think well obviously you have to know your subject. I think you have to have a broad view of the vast majority of these cases tend to be about installation so I think if you haven't actually had experience of installation then it becomes a bit more difficult. You know I have been offshore a lot installing a lot of things and trenching a lot of things so that, quite often sides will choose experts who are well-known academic names who carry a lot of clout, I think I would argue it's probably more important to have a real world experience perhaps, that's not to criticize the professors of this world, but I think it's a quite often the less well-known people that have got experience actually working in the industry, I would say they can make very good experts, whereas people who are perhaps tremendously academically focused, you know clearly very clever guys and contribute an awful lot, but you have to be open to being challenged and it can be, tends not to be very adversarial, but it can be quite stressful you know, essentially being told that your opinions doesn't line up with what they think. I've seen a few experts get quite upset and bang the table and say that's a stupid question and what there's no need, it's more about keeping in your head that you're there trying to help the process not necessarily one side or the other, and it's difficult when you get wrapped up in the whole, yeah stay calm, and again I think the whole Yorkshire stubbornness perhaps helps there. You know if you're not asked a question don't say anything and that's quite hard because lawyers tend to talk in generalities, wanting to get you to talk about things. I think what makes a good expert is somebody who's knowledgeable, calm, wants to help.
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Gregor
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One of the things I look at when instructing experts on a live dispute on behalf of our clients is their experience actually giving evidence, it's usually quite an important thing because it can be a very intimidating environment where you're essentially your report that you've written, however long ago has been poured over by usually a legal team of very capable individuals, who are potentially spearheaded by a you know senior Council or someone very well equipped, in terms of cross-examination, how do you find that kind of examination and the giving evidence?
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Mark
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Yeah I quite like it and that's part of the drama thing but I think you've got to be ready to say I don't know if you don't know. You've got to be ready to concede points that you don't believe that you've probably talked about not being terribly strong technically in your report. I think most importantly you've got to stay in lane. The number of times because engineers love to, and this usually comes out in reasonable endeavours clauses for trenching, engineers love to wander into legal, talking about legal clauses and sort of contractual, and you can see it coming a mile off because of course the other side, they want to get you out of lane so you could you know just anecdotally so last year I was in a trenching dispute I was with the developer and the other side's expert, they were talking about the reasonable endeavours clauses and sort of dragged him talking about the reasonableness of various contract clauses and all the rest of it, and it was clearly not geotechnics and then after 10 minutes the barrister that was cross examining said could you tell me which legal school you went to sir, he said well of course I didn't, he said yeah I thought so! You've just got to say well that's a legal question it's not for me, of course that's fine. So yeah it's that staying in lane and being calm and being yeah I quite like it.
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Gregor
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And I guess partly for my own interest, be interested to understand from your perspective, what makes a good instructing client then from a geotechnical expert instruction?
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Mark
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I think without being too critical so often, if you're brought in at the arbitration stage and there's an agreed set of questions I quite often look at the questions and think how on Earth have you arrived at these questions and it might be valuable to have some input into what the scope might be or somebody else if there's a shadow expert or whatever if there's two different expert I think that's because quite recently there's been a set of questions established and nobody seems to know where, what the providence of the questions is, or wants to take responsibility for them and they're a bit, it doesn't make my job any easier at all the fact that they're quite broad and a bit strange but apart from that I would say you know it's just clarity and it's all the things you expect.
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Gregor
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Excellent, that's been a really interesting conversation Mark so I really appreciate coming on the podcast today. Thank you very much for listening to Risk Rewired: The Energy Disputes podcast. If you'd like to know more about any of the points discussed today, or our energy disputes team more generally and how we can work with you, you can contact us via our website. Thank you.
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