Topic 8 Joint Operating (JOA) and other commercial agreements

What JV arrangements between oil companies are there?

Area of Mutual Interests Agreements (AMI)
Joint Bidding Agreements (JBA) Joint forces to win a bid, Probably lead to JOA
, lead will prepare the bid, prepare documents, nomination of operator, cost
sharing
Governing the period / acting as bridge before JOA are formed.
Joint Study Agreements Joint forces to share information and existing studies
Umbrella Agreements
Joint Data Agreements Joint forces to share data probably after formation of
JOA
Joint Drilling Agreements
Joint Operating Agreements (JOA)
Farm-out Agreements
Unitisation Agreements

MCC, PSC,
Host
State

JOA
A

JV

What are the reasons for entering into a JOA?

To share the risks (geological, technical, dev-t, financial, environmental, political
To increase chances of winning a bid, complement each other to be stronger in
the bidding stage
To learn from technology and expertise of other companies
Avoiding the duplication of work, facilities, equipment etc / Sharing overheads,
Economies of Scale
Partial state to prevent over investment of resources and allow individual to not
forgo opportunity in other regions
General questions

 Is state approval required for JOA to become effective?

JOA (Mozambique): WHEREAS, the Concessionaires are obliged to sign and

effectuate a Joint Operating Agreement acceptable to the Government under the
said EPC prior to the Effective Date of the EPC
How are rights and liabilities shared in a JOA?
In accordance with CPs participating interests
Operator
JOA (Mozambique):
(A) Operator shall act on behalf of the Concessionaires to this Agreement, have all
of the rights, functions and duties of Operator under the EPC and shall conduct and
administer all activities under the EPC and this Agreement. Operator may within the
terms of this Agreement employ any persons (including Affiliated Companies) in
such relevant Petroleum Operations.
(B) In the conduct of Joint Operations Operator shall:
(1) perform Joint Operations in accordance with the provisions of laws, regulations,
the EPC, this Agreement, and the decisions of the Operating Committee;
(2) conduct and administer all Joint Operations in a diligent, safe and efficient
manner in accordance with applicable law and such good and prudent petroleum
industry practices and field conservation principles as are generally followed by the
international petroleum industry under similar circumstances;
(3) exercise due care with respect to the receipt, payment and accounting of funds
in accordance with applicable law, the Accounting Procedure and good and prudent
practices as are generally followed by the international petroleum industry under
similar circumstances;
(4)neither gain a profit nor suffer a loss as a result of being the Operator in its
conduct of Joint Operations;
Should operator be paid for doing the work for everyone?