Master Service Agreement — Oilfield Services

Master Service Agreement — Oilfield Services

Drafts a litigation-tested MSA for the operator-contractor relationship in upstream oil and gas, with knock-for-knock indemnification compliant with state anti-indemnity statutes.

Prerequisites

Collect before drafting:

1. Party details — legal names, entity types, states of organization, principal offices
2. Service scope — drilling, completion, workover, maintenance, or other oilfield services
3. Operational jurisdictions — states where services will be performed (controls anti-indemnity compliance)
4. Insurance specs — existing coverage requirements or broker constraints
5. Existing agreements — prior MSAs, rate schedules, HSE policies
6. Special terms — exclusivity, minimum volume commitments, subcontracting restrictions

Core Workflow

Step 1 — Identify Jurisdictions

Determine all states where services will be performed. This drives indemnification drafting — anti-indemnity statutes vary dramatically and can void entire provisions.

Step 2 — Draft Articles

Produce a complete MSA with these 14 articles, adapting detail to engagement scope:

Step 3 — Define Terms

Include these defined terms at minimum:

Step 4 — Set Insurance Minimums

Policy requirements: Operator + affiliates as additional insured (all except WC); primary and non-contributory; waiver of subrogation; 30-day cancellation notice; occurrence basis; A.M. Best A- VII minimum.

Step 5 — Draft Knock-for-Knock Indemnification

Mutual indemnity model:

Anti-indemnity statute compliance (CRITICAL):

Include a savings clause: indemnities enforceable to fullest extent permitted by law; prohibited provisions deemed modified to minimum extent for compliance.

Indemnification procedures: prompt written notice (failure doesn't relieve unless material prejudice); indemnifying party controls defense with acceptable counsel; no settlement admitting fault without consent; indemnified party cooperates.

Step 6 — Attach Work Order Template (Exhibit A)

Include a blank Work Order form with fields for: Operator, Contractor, services description, well/location, jurisdiction, start date, duration, personnel, equipment, deliverables, compensation structure (day rate / unit price / lump sum / cost-plus), rate schedule, reimbursable expense threshold, special terms / MSA modifications, and representative contact info for both parties.

Pitfalls and Checks

• Never use broad-form indemnity in anti-indemnity states — always carve out sole negligence/willful misconduct at minimum
• Insurance must support indemnities — additional-insured and waiver-of-subrogation endorsements must align with knock-for-knock allocation
• HSE is non-negotiable — do not weaken Operator stop-work authority or incident reporting requirements
• Mark all statutory citations [VERIFY] — state O&G statutes are frequently amended
• Conspicuous provisions — jury waivers, liability limitations, warranty disclaimers must be bold or caps per state enforceability requirements
• Data ownership default — all well, reservoir, geological, and production data belongs to Operator; Contractor gets use-license only during engagement
• Survival clause — indemnification, confidentiality, IP, payment, dispute resolution, and audit rights must expressly survive termination