Aipn Joint Venture Agreement

The operator must present to the parties the annual work program and budget detailing the proposed joint actions and the projected costs to be charged to the joint account for this year. Introduction Two Model Form Agreements Operator Responsibility Operator Responsibility Initially, the 2012 JOA aims to clarify and improve the existing provisions of the 2002 JOA. In the 2012 JOA, the JOA uses broadly defined terms that reflect current industry practice and, unlike the 2002 JOA, commonly used words and phrases are now defined in Article 1 of the 2012 JOA. The 2012 JOA was renamed the International`s Joint Operating Agreement, while the JOA in 2002 was somewhat confused as the « international operating agreement ». The exclusion characterizes the act as intentional misconduct and thus reduces the possibility of such an act within the meaning of the OGUK agreement. As a result, the operator is more likely to avail itself of the disclaimer and be compensated by the parties to the joint venture under the OGUK agreement. Serious negligence and gross misconduct According to the OGUK agreement, non-responsibility and compensation in favour of the operator apply regardless of the operator`s negligence or failure. On the other hand, if the parties to the AIPN contract do not apply the optional provision on gross negligence or premeditation, the disclaimer and compensation may continue to apply, even if the damage is caused by « an existing defect or negligence… gross negligence, premeditation, strict liability or any other legal fault of the operator. The position in the AIPN agreement (if the optional provision is not in force) is very favourable to the operator and in fact means that the only recourse available to the parties to the joint venture against the operator in the event of a breach of the operator`s obligation to carry out the joint transactions, in accordance with the standard set out in the joint enterprise agreement of AIPN, is to: remove the operator. , even if the parties to the joint venture suffered harm as a result of gross negligence or intentional misconduct by the operator. Consecutive damage The last important difference between the approaches to the agreements is the treatment of the operator`s liability for consecutive damages.

The OGUK agreement expressly provides that the operator is not liable for any subsequent damage that may be caused to a joint venture company resulting from the failure to perform or improperly perform its obligations as an operator. Each joint venture is required to compensate the operator for and against this liability. The use of model-type agreements on common enterprise agreements as a starting point for negotiations between the parties is a common practice in the oil and gas industry. There are many common operating agreements circulating and the parties generally tend to choose the agreement that they believe best applies to their particular joint venture as the basis for streamlining the development and negotiation process.