Scottish Power UK Plc v BP Exploration Operating Company Ltd & Ors

The Agreements, in which words with capital letters are defined terms, are lengthy and complex documents. The scheme of them is as follows. Under Article 6.12 the Sellers were bound to deliver on each Day at the Delivery Point the quantity of Natural Gas properly nominated by Scottish Power. By Article 6.13 Scottish Power was obliged to make weekly nominations of gas to be delivered over the following week. If it failed to do so it was to be deemed to have made a nomination in the amount of the most recent preceding Daily Nomination.

"Throughout the Contract Period the Seller will, in accordance with the Standard of a Reasonable and Prudent Operator, provide, install, repair, maintain and operate those Seller's Facilities which are (in the opinion of the Seller and the other Sellers) necessary to produce and deliver at the relevant times the quantities of Natural Gas from the Andrew Field which are required, in accordance with the terms of this Agreement, to be delivered to the Buyer at the Delivery Point."

"the production wells, platforms, separation, processing and treating equipment, pipelines and other equipment … whether or not owned by the Seller and the Other Sellers installed or used for the purpose of producing Natural Gas from the Andrew Field and delivering the same at the Delivery Point under this Agreement."

"...a Person seeking in good faith to perform its contractual obligations and, in so doing and in the general conduct of its undertaking, exercising that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator engaged in the same type of undertaking under the same or similar circumstances and conditions, and the expression the 'Standard of a Reasonable and Prudent Operator' shall be construed accordingly."

Article 16, headed “Default”, contained provisions in relation to underdeliveries.