For more than 20 years, AIPN JOA has provided a reference for international oil and gas joint venture agreements. It is now one of the largest and most widely used contracts in the oil and gas industry. The appointing authority JOA strives to give an intermediate representation of what is „standard“. As its use has increased over the past two decades, particularly in emerging markets, its provisions have increasingly become the standard used to compare, measure, bank and finance upstream oil and gas joint ventures. Apply for membership before registering and receive member awards! After completing your membership application, please email aipnevents@aipn.org for registration assistance. It will be interesting to see to what extent the proposed new wording is followed with respect to the costs transferred. It is common to treat transfer provisions as part of the host government contract (e.g.B. in the production-sharing agreement) and therefore not in the JOA. Commercial arrangements for a portage generally depend on the outcome of negotiations between the host government and the oil and gas companies involved. The 2002 JOA reflects the generally accepted position underlying an OJA that the operator should not make any profit or loss in the performance of its duties as an operator. (The operator`s profit and loss from joint operations is generally limited to the share of its holding in the JOA.) In the past, the basic position on the operator`s liability under the JOA has always been that operational liabilities are distributed proportionally among shareholders, including the operator. However, this is usually subject to an „exception“, in which the operator is guilty of gross negligence or intent. This liability of the operator expressly does not apply to indirect or environmental damages.
The definitions and approach of this spin-off company vary from agreement to agreement. A relatively common approach to the impact of „intentional misconduct“ is to include the inclusion of senior management in the definition of intentional misconduct. There is also a new optional provision according to which each draft development plan to be submitted to the works council for consideration must be accompanied by a provisional work programme and a budget for dismantling (Article 6(5), optional). In the case of a permit, the operator is required to take all necessary steps to obtain government approval for the work program and decommissioning budget. The JOA 2012 extends the option of the Article 10 Security Agreement (Task) contained in the OJA 2002 and establishes a new methodology for determining when the parties should establish provisions to cover expected decommissioning liabilities. The operator has a new obligation to calculate a work programme and a decommissioning budget at the end of each calendar year and to submit it to the other parties containing an estimate of the decommissioning costs (Articles 6.3.A.6 and 6.5). The guidance notes contain linguistic suggestions for the introduction of an integrated project team. An integrated project team is composed of representatives of all parties (or all parties with participation above a certain defined threshold) and the scope of its work must be clearly defined in the OJA. Integrated project teams have been discussed and debated over the years (including in previous joA revisions).
They are seen as a tool for non-operational parties to actively participate in the operation and decision-making of the project. Although the JOA Editorial Board in 2012 and the Appointing Authority Board of Directors ultimately decided that integrated project teams are not a recognized industry practice, they generated enough discussion and interest from the appointing authority editorial board to be included in the guidelines. The publication of JOA 2012 is an important event. This is a welcome improvement over an already strong and widely used joint venture framework for oil and gas operations. The latest version of the JOA appointing authority has been adapted to better reflect legal, technical and economic developments in joint ventures and oil and gas structures internationally. In early 2012, the Association of International Petroleum Negotiators (AIPN) released a new version of its Model Joint Operating Agreement (JOA). The new OJA 2012 updates the existing JOA 2002. It was first published in 1990, then revised in 1995, 2002 and now 2012. The JOA 2012 Editorial Board (composed of 180 international oil negotiators) began its work in December 2007 and lasted more than four years to complete the JOA 2012. Although the guidelines are not included in Joa 2012, they include proposals for text to extend the 2002 JoA provisions on NOC participation. The guidelines contain possible language for a noC transport provision that could be included either in Joa 2012 or in a separate agreement.
The proposed wording provides for a scenario in which non-NOC participants would fund certain work on behalf of the NOC, with the repayment of this portage (financing) being made from a portion of the NOC`s share of proven hydrocarbon reserves. The provisions on the presentation of work programmes and budgets, evaluation, development and production plans will be extended in the framework of the OJA 2012, with the possibility of including costs, resources and staff estimates (Article 6(1)). C). New provisions concerning the procedure for submitting work programmes and budgets for approval by the Government, either after approval by the works council or if the works council has not reached a decision within the specified period without such approval (Article 6.1, Section G). This new provision reduces the risk of government approval being refused due to delays by the works council and increases the pressure on non-operators to approve a work programme and budget. Firstly, joa 2012 aims to clarify and improve the existing provisions of JOA 2002. JoA 2012 uses broadly defined terms that reflect current industry practices, and unlike the 2002 JOA, commonly used words and phrases are now broadly defined in Article 1 of JOA 2012. The 2012 JOA was renamed the „International Joint Exploitation Agreement“, while the 2002 JOA bore the somewhat confusing name of the „International Exploitation Agreement“. As part of JOA 2012, operators must develop and establish a health and safety plan to ensure safe and reliable operational management. The operator must execute the plan in accordance with the relevant laws and in accordance with the standards and procedures generally applied in the petroleum industry.
The works council must review the HSE plan every year (unlike the 2002 JOA, which required regular review). The 2012 JOA also contains a number of alternative provisions on the extent to which the operator must carry out HSE checks, which the parties must take into account when preparing the OJA. Each party has the right to propose changes to work programmes and budgets under the 2012 JOA (Article 6.1.H), but these changes require the approval of the works council and, where appropriate, the consent of the government. As oil and gas fields mature, host governments are increasingly working to ensure that arrangements are made for the decommissioning of offshore facilities. This is also a problem for joint ventures, as they will inevitably have to bear the cost of such dismantling. The main objective of the new provisions of the 2012 JOA is to give greater importance to dismantling and to ensure that a co-shareholder does not bear a disproportionate share of these costs. Therefore, the OJA 2012 expands in particular the decommissioning safety options included in the OJA 2002. The 2012 OJA is more prescriptive than the 2002 JOA in its work programme and budget requirements.
Under the 2012 JOA, the Parties will agree in more detail on the content, exchange and approval of all information relating to joint operations. This is a response to concerns that operators are not providing adequate and timely information to non-operators. In particular, there are new provisions for work programmes and budgets that prescribe the content to which operators must adhere and specify how and when the approval of the operating committee must be granted to ensure that the operator is able to submit the work programme and budget to the government if the host government contract so requires. .