What Is A Joint Operating Agreement In Oil And Gas

However, this does not mean that members of hereditary building rights always have competing interests. Often, oil and gas leasing companies will have the desire to involve other parties in exploration and development projects in order to share risk and raise capital. [8] John Orban, Money in the Ground: Insider`s Guide to Oil and Gas Deals (4.4th edition. Meridian Press 2000). For example, many of the current methods of raising funds for the exploration and development of oil and gas properties involve buying and selling shares undivided from the hereditary building right to investors. [9] In addition, one of the most common methods of allocating the costs and risks of exploration and drilling a development is the sale or „agriculture“ of undivided portions of leases in oil and gas concession areas. [10] Patrick H. Martin and Bruce M. Kramer, Williams & Meyers, Oil and Gas Law Abridged Fifth Edition, §503.2 (LexisNexis Matthew Bender 2013). In each of these scenarios, the parties involved are likely to have common core objectives, and their respective interests are more or less aligned.

[11] Michael E. Curry, The Operating Agreement – After the Honeymoon, Texas State Bar, 31st Ann. Oil, Gas & Min. L. Inst. (April 2005). However, a joint venture agreement will provide these parties with a structure to deal with future disputes, unforeseen differences, and points of contention that often develop. [12] Oil and gas operators jointly responsible for the exploration, development and development of leased land in pooled areas or in more than one area must use a joint development agreement as the underlying contractual framework for their joint venture. The parties to the OJA can, on the whole, be classified as one or the other: the operator for joint operations is named in the OJA. According to the wording of the JOA, the operator appears to have enormous control because he has the power „to carry out and direct all operations in the contract territory and to have full control over it“. The Joint Operating Agreement (JTA) is often used in the oil industry as a contractual framework for joint ventures on different continents and standards.

The first part of this book deals with considerations before concluding an JOA, such as . B compliance with corruption laws; standards, practices and procedures throughout the petroleum industry; Applicability of the OJA and understanding of decommissioning obligations. The second part focuses on the key clauses of an OJA that cover issues such as health and safety considerations. liability and insurance; and control of operations and expenditures. This is a unique publication dedicated to analyzing all those important practical issues facing oil and gas companies in different parts of the world when negotiating and implementing an JOA in a single book publication. 2. RISK MITIGATION: The oil industry is not only capital-intensive and discouraging in day-to-day operations, but also poses a major risk to infrastructure and human lives. A failure in the development or operation of an infrastructure development or operating activity can effectively bankrupt a company. .

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