Taylor And Windsor On Joint Operating Agreements

A modern concession is, in many ways, similar to the traditional concession. It is also an agreement under which the oil company obtains the exclusive right to explore oil and, when oil is discovered, to produce, market and transport. The company pays certain costs and taxes to the state that has crude oil. Under this type of concession, the company has rights to the oil produced and holds it from the date of extraction. It is now mentioned by different names, such as license or leasing, but it is still the most commonly used type of agreement. The initial period is usually 20 years. Coverage has also been reduced. The company generally only gets rights to crude oil and sometimes natural gas. Oil remains the property of the state in almost all such agreements at any given time. The JOA can also be defined as the private agreement that „divides” the solidarity commitments (as awarded by the State concerned) imposed by the licensing conditions and regulates relations, obligations and rights between the partners of the joint venture.

A JOA covers many aspects of partner investments and is generally designed to last the entire life of the investment, from exploration to production. It will address issues such as project accounting funding, voting procedures and default mechanisms if a partner does not act in compliance with the JOA and meets its funding commitments. [8] Therefore, the JOA is a contract between two or more parties. „In addition to this liability, the operator or his company linked to the subsidiary is not liable for losses or damages resulting from joint activities, unless such loss or injury is attributable to gross negligence and intentional misconduct by its directors or supervisory staff, provided that the operator or its associated companies are not held responsible for damage or pollution of the reservoir. , consequential damage or damage. but not limited to production losses or loss of profits. The above measures do not exempt the operator from exercising the utmost care, in accordance with good oil field practices, in the selection, training and monitoring of its personnel, contractors and representatives. This general allocation of power is also conditional on limiting the performance of these transactions „as authorized and necessary by and within the framework of this agreement.”