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OPEX meaning

Published by a LexisNexis Energy expert
What does OPEX mean?
OPEX most commonly refers to operating expenditure: the recurring costs of running a business, asset or project (for example, payroll, utilities, routine maintenance, consumables and third‑party services), as distinct from CAPEX (capital expenditure). In legal practice it features in M&A, finance and project documents, PPP/outsourcing contracts, energy and infrastructure agreements, and commercial leases (including recoverable service charge). Allocation and definition of OPEX affect pricing, risk transfer, indexation, pass‑through and benchmarking, and may inform financial covenants and budgets. OPEX is a commercial/accounting expression rather than a term defined by legislation or case law. Its meaning is usually set by the contract (sometimes by reference to IFRS or UK/Irish GAAP) and should be checked carefully for inclusions/exclusions (e.g., major repairs, overhead allocation, taxes, insurance, lifecycle costs). Usage is broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland, though tax and accounting treatments may vary by regime and should be considered where relevant. In some regulated sectors (notably nuclear and process safety), OPEX is also used to mean operational experience (learning from operational events to improve safety and compliance). Where this sectoral sense is intended, it is typically evident from context or defined in the relevant framework or contract.
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