This document provides a general summary and is for informational and educational purposes only. It is not intended to be exhaustive and does not constitute legal advice. Specific legal advice should always be sought before any action is taken or omitted. 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 in order to ensure that the operator is able to submit the work programme and budget to the government when the host government contract so requires. Several optional provisions are included in the work programmes and budgetary provisions and the Parties should ensure that the OJA 2012 is amended to take account of their specific requirements. 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. On the right, you will find a list of current standard contracts. A list of available archived contracts can be found here. One of the main objectives of the appointing authority is to create model contracts that are widely accepted and used in the international energy industry. These contracts are tools for the negotiator that serve as a starting point for negotiations and significantly reduce the time it takes to reach an agreement. The main impact of the new anti-corruption provisions on the JOA parties is in the form of full compensation to cover losses suffered by non-infringing parties and the following optional provisions: (i) non-operators have the right to dismiss the operator for violation of anti-corruption laws and obligations; and (ii) a party that withdraws from the OJA for the sole reason that another party has violated anti-corruption safeguards will receive compensation and has included in its calculation of the damage the amount of its investment that it lost as a result of the withdrawal. It is possible that this right of withdrawal could lead to an abuse of this provision by the parties to the JOA, as an JOA party may have reasons other than the violation of anti-corruption guarantees to withdraw from the JOA.
This research identifies and analyses the types of disputes that often arise from the JOA in a number of developed hydrocarbon jurisdictions, in addition to those that arise in international transactions where jurisprudence is less developed. Given the widespread use of LAO models in the oil and gas industry, this document also provides a detailed overview of the development of LAO models in several jurisdictions and internationally, as well as their impact on industry practices, jurisdiction and dispute resolution arising from contracts based on these JOA models. The document covers the following topics: A brief introduction to the JOA, its use in the O&G industry, and its key principles and regulations; The development and use of LAO templates and accounting procedures; Industry practices regarding the JOA; Oil and gas law with regard to the JOA; A review of international court decisions and arbitral awards rendered in OJA disputes; and an analysis of trends in JOA disputes and lessons that can be drawn from these sources. As a result of joA 2012, the operator now has the right to transfer its ownership to an affiliate, subject to the necessary approval of the competent government and provided that the transferee has the necessary technical and financial resources to perform its functions. This option can be useful for oil and gas companies who prefer the operator function to be regulated by a separate company for tax reasons. Due to its significant use in the upstream oil and gas industry, the JOA Appointing Authority Editorial Board decided to update the model form to adapt it to the current realities of international oil and gas activities. These realities that have redefined the industry`s approach to doing business include the collapse of financial markets in 2008, the Macondo incident of 2010 and the introduction of the UK Corruption Act in 2010. The appointing authority`s model contracts support the parties by allowing them to focus their efforts on key terms and conditions, rather than on provisions of a standard nature. Due to differences in industry practices, standards, laws and practices, appointing authority drafting committees consist of a broad group of practitioners and negotiators who work together to develop a balanced and comprehensive model contract, using options and alternatives as needed to reflect differences in international industry practices. Given the evolution of this area of law in the main international jurisdictions (e.g. B the UK Bribery Act 2010 and the Foreign Corrupt Practices Act in the United States), these provisions were revised in JOA 2012.
JoA 2012 contains stricter provisions to combat bribery and corruption, which include additional safeguards. Parties are also required to keep records, provide information upon request to demonstrate compliance with obligations, and inform other parties of alleged violations of applicable anti-corruption laws and obligations. The Guidelines introduce a new concept of `Integrated Project Teams` (IPTs) (Article 5(4) Guide). An IPT is a team formed at the discretion of the operator and composed of representatives of each of the parties and designed to give non-operators a more active role in project operation and decision-making. The tasks of the IPT could include the preparation of the development plan or the implementation of certain projects during the development phase. IPTs are not common in the oil and gas industry, which is why they are not provided for in the main part of the JOA. However, the guidelines contain comprehensive formulation proposals for a new exhibition that could be included to regulate the creation, scope of work, obligations and responsibilities of the IPT. The revised JOA 2012 is the latest in a series of standard hydrocarbon-related contracts published by the appointing authority to facilitate the negotiation of energy transactions worldwide.
The JOA, the JOA Guidelines and other model contracts can be found on the appointing authority website, www.aipn.org. Editorial boards develop new models and constantly update old versions. Appointing authority members always have free access to download all appointing authority contract templates, as well as guidelines, translations and training modules for these contracts, if any. Archived contracts are also available free of charge online. Members also enjoy the benefit of joining one of the appointing authority`s editorial boards. The Association of International Petroleum Negotiators` (appointing AUTHORITY) Model Joint Operating Agreement (JOA) was first published in 1990 and has undergone a number of subsequent revisions. It is the most widely used (but not always the most popular) joint exploitation agreement in international conventional oil and gas projects today. Despite some anticipation to the contrary, the position of the 2002 OJA that economic operators should not incur profits or losses in the performance of their tasks remains unchanged by the 2012 revision (Article 4(6)). The exception to this basic principle remains in cases of gross negligence or wilful misconduct on the part of the operator`s senior supervisory staff, with the exception of indirect or environmental damage for which the operator cannot be held liable. Operator liability will always be a potential source of conflict in the negotiation of DAAs when it comes to balancing minority participants` concerns about actions taken outside their control with operators` reluctance to accept responsibility for operations conducted on behalf of participants. .