Resilience in global contracting in the energy services sector

The UK energy sector continues to wrestle with numerous headwinds involving energy policies, tax changes, regulatory and planning obstacles, the challenge of enticing inward investment in a globally competitive world, a historic move away from a national manufacturing base and the broader concept of what is a “Just Transition”. There are many column inches being written on the impacts we are seeing from these challenges in the local and national market.

At the same time, we are also seeing an ongoing diversification of oil & gas and energy service companies into other sectors (such as defence, nuclear, marine, avionics, clean energies etc.) and broader geographical jurisdictions. SMEs and private equity backed portfolios are racing to grow their market share and are broadening their targeted markets whilst seeking to maintain and grow revenues and margin in their traditional space. And in the volatile and complex world of oil & gas and energy services, resilience has become a critical factor for success in this ever-changing global contracting matrix.

The sector operates at the intersection of geopolitics, economics, environmental regulation, and technological innovation, making it particularly susceptible to disruption. Whether facing fluctuating commodity prices, regulatory shifts, supply chain constraints, geopolitical tensions or more recently the risk of hyper-aggressive trade wars, companies that build resilience into their contracting strategies are better positioned to sustain operations, manage risks, and capitalise on emerging opportunities. Here we look at a few areas where companies can consider how to build greater resilience into their contracting philosophies and strategies.

Energy Market Volatility

The global energy market is inherently cyclical. Price crashes like those seen in 2014 and again during the COVID-19 pandemic in 2020 underscore the importance of flexibility and adaptability in contract design and execution. Resilience in this context means crafting agreements that seek to absorb or mitigate the impact of shocks – whether from demand collapse, political instability, or unexpected environmental challenges. Long-term contracts tied strictly to fixed pricing models have often proven vulnerable in downturns. In contrast, resilient contracting may include dynamic pricing mechanisms, force majeure clauses that are finely tuned to a broader set of risks, and options for renegotiation that allow both parties to remain viable partners even in shifting market conditions.

Supply Chain and Operational Continuity

Resilience is also critical in maintaining the continuity of supply chains and field operations. Contractors and suppliers are now expected to not only deliver cost-effectively, but also to continue performance under stress. Global contracting strategies must, therefore, account for potential bottlenecks, from raw material shortages to labour strikes and shipping delays. More companies are embedding resilience through diversified sourcing, digital supply chain management, and collaborative frameworks with suppliers. In turn, contract terms increasingly emphasise performance metrics linked to continuity, reliability, and crisis response capabilities.

Turnkey Contracting

In many cases, customers are increasingly looking to push risk down into the supply chain. Where customers would previously procure multiple diverse scopes separately and individually, in some cases we have seen significant changes in procurement strategies where customers are requiring turnkey solutions for multiple and varied scopes. This raises questions (and opportunities) regarding the appropriate solution to deliver that one-stop-shop approach – whether that be, alliances, joint ventures, mergers or acquisitions etc. And each option brings a different type of contracting vehicle and structure. Understanding market shifts and taking strategic decisions quickly regarding how to grow market share are key to avoid being left behind. Progressing those solutions at pace and under robust contracting models is just as important in managing and placing risk whilst positioning to win.

The Regulatory and Environmental Dimension

Resilience is no longer just about weathering economic storms – it must also seek to address environmental and regulatory changes. The global shift toward decarbonization is imposing new compliance obligations and performance standards on contractors. Whether it’s methane emissions reporting, carbon pricing, or environmental impact assessments, energy service providers must navigate an increasingly complex legal environment. Resilient contracting includes proactive compliance planning, whether considering embedding ESG metrics in performance clauses, or ensuring flexibility to adapt to new regulatory frameworks.

Technological Change and Cyber Resilience

The rise of digital technologies in energy and infrastructure management adds another layer of complexity, and with it, greater vulnerability to cyber threats. We are now seeing contracts in the energy services sector regularly incorporating provisions for cybersecurity standards, data governance, and incident response protocols. Technological resilience also means being able to adopt and integrate new tools rapidly. Contracting models are increasingly reflecting the need for agile implementation of automation, remote monitoring, and AI-driven analytics. Parties that can integrate new tech capabilities without renegotiating foundational agreements can gain a strategic edge.

Human Capital and Organisational Resilience

Behind resilient contracting lies resilient organisations. This means not only having robust risk management and legal teams but also fostering a culture of adaptability, continuous learning, and proactive problem-solving. Contracts are ultimately executed by people, and resilient teams are more likely to be comfortable operating in the midst of ongoing change. Training, cross-functional collaboration, and scenario planning are increasingly viewed as investments that pay off during uncertain times.

Ultimately, resilience is no longer a reactive muscle to be developed in the energy services sector; it is a proactive strategy. In a world marked by disruption, uncertainty, and accelerating change, resilient global contracting provides the foundation for operational continuity, regulatory compliance, and strategic growth. As the sector evolves, it will become more and more important to prioritise resilience – in contracts, operations, and cultures – as part of a successful business strategy.

To discuss any of the points raised further, please contact a member of our Enrgy law team here.

The information and opinions contained in this blog are for information only.  They are not intended to constitute advice and should not be relied upon or considered as a replacement for advice.  Before acting on any information contained in this blog, please seek solicitor’s advice from Gilson Gray.