Gas and Oil Environmental Regulation

Oil and Gas Environmental Regulation & State Control IN the context of a production licences what do you consider to be the main function and aspects (or clauses) of a joint operating agreement (JOA)? a) Introduction: (Set out the context of JOA’s in the industry and explain what you are going to cover to help the reader ) 15 b) Explain the concept and function of a JOA. 25 c) Identify what you consider to be the key clauses within a JOA 40 d) Conclusion 10 e) Structure, presentation and references 10 100%

Running head : GAS AND OIL ENVIRONMENTAL REGULATION
GAS AND OIL ENVIRONMENTAL REGULATION
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Introduction
The agreement of shared operating is the usual method by which the corporation
participates to establish a mutual venture in the production and exploration of gas and oil. The
joint operating arrangement is known both to the continental shelf of the United Kingdom and
also to worldwide. The parties entered into the agreement of joint operating offers various
advantages with fundamentally one being the mitigation of joint risk in addition to that part with
the required outlays for search that is capital intensive, production and development(Pereira and
Hall 2017). The papers explore the function and conception of the Joint Operating Arrangement
and also determine factors that are regarded as key sections in the agreement. Furthermore, the
same can be attained through relevant literature review along with that usage of knowledge
through research.
Function and concept of Joint Operating Arrangement
There is an occurrence of the combined venture when more than two parties in the gas
and oil industry arrive together along with the goal of creating profit. The agreement of joint
operating is the tool that guides the joint venture, and thus, a joint venture is held as an
unincorporated association. The chief characteristic of a mutual joint venture is there exists a
zone of common interest by which the respective parties engaged for the purpose of running
business conjointly by excluding others (Tavakkoli Mohammadi, Ahmadnejad and Eshaghzade
2018). Furthermore, in the year 2009 in the country of United Kingdom, the model of Joint
Operating Arrangement is applied to guide the liberty of functioning of a joint venture with the
goal of reducing expense and also to enhance capabilities in joint venture among the definite
zone of functioning (Pereira and Mathews 2017). Thus resulting which the zone of mutual

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interest is acquired through the agreement, the agreement of joint operating by which there is an
engagement of parties promise to function conjointly but separately and distinctly(Rush 2015).
The joint venture is dissimilar from that of partnership as since in exclusive partnership, the
partners part with the profit and exist joint operation. Therefore in the agreement of the joint
venture there occurs parting with the interest and each party obtain profit share that depends on
the level of engagement of parties to the operation jointly. The agreement of joint bidding in the
country of United Kingdom go before an independent joint venture and also indicates the parties
desires to operate together as under the appropriate licensing (Gómez Picañol 2016). Another
dissimilarity in between and partnership is the obligation of the respective parties to the joint
operating arrangement are not combined. Furthermore, each party in the Joint Operating
Agreement is projected to make disposition of the share of gas and oil independently and thus
identify the profit. The relation in the agreement meant the combined investment in the process
of production and also not combined parting with the profit that is realized in contrary to the
partnership cases.
Scope of Joint operating arrangement
The scope of Joint operating arrangement is to create the respective obligations and rights
of the parties with respect to the activities and operations under the joint operating arrangement
that involves appraisal, disposition, production, joint exploration of the petroleum products and
decommissioning the zone of multiparty operators (Desbarats, Todesco and Royer 2016). The
nature of the agreement will make a determination through a series of activities that constitute
the series of activities and joint operations that specifically aloof from joint operations
definitions as the excluded actions. The current position in the country of United Kingdom for
joint operating agreement is the court favour the clause of withering interest or forfeiture to the

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clause of penalty (Robertson, Moore and Wehmeyer 2015). The scenario of contemptuous
interest is like depreciation of the interest of the defaulting parties that is assessed on the basis of
pro-rata together with the margin of default than forfeiture payment or outright penalty(Kulander
2015). The attitude shift is to address to the issues of the clauses of penalty that destroy the
existing connection in amongst the parties to the joint operating agreement, issues evolving from
gas and oil industry in the country of the united kingdom. Thus the current position is set out in
Butter vs BBC Worldwide
The gas and oil industry in the country of the United Kingdom for the parties who are
involving in joint venture indicates that there exist supposition on behalf of the establishment of
a joint venture than of partnership. In the case of Spree Engineering and Testing Ltd v. O’Rourke
Civil and Structural Engineering Ltd, 2007 the high court made supposition for the establishment
of a joint venture that is unincorporated that presumption is regarded as the tradition of United
Kingdom. The court reasoning was that parties implemented distinct action they had avoided
specifically by the application of partnership in the relationship (Hall 2019). The same reasoning
was upheld in the case of Brian Pty Ltd v. United Dominion Company Ltd, whereby it had been
stated by Justice Samuel that joint venture was held as person association corporate or natural
who granted by agreement for participation in mutual actions for combined profit by combining
respective sources devoid of partnership formation in lawful parameters.

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image: Oil & Gas Environmental regulation
It is argued that Joint operating agreement is defined structure for the proportional
interest of the respective parties and also descriptive document for connection of parties under
proper licensing. The agreement entails the description of proper rights that are approved by
licensing under Petroleum Act, 1989. The obligations and rights must be clearly apportioned in
Joint Operating Agreement else could tend to parties dispute (Moreira et al. 2015). The
agreement in the United Kingdom shields the development, exploration, and petroleum and
storage logistics. The activities stand till the petroleum that is commercially recoverable and also
discharging has taken place. The characteristic of the agreement varies from the settlement of
2002, where the parties liabilities did not expand to the stage of decommissioning of activities.
The Joint operating agreement under the United Kingdom of 2009 is the most significant clause

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that dealt with the interest of the parties. The clause entails that the rights and duties that are
abided by the respective parties engaged on the basis of pro-rata as per contribution proportion to
license excluding where there exist sole operative of risk (Gordon 2015). Furthermore, the assets
and properties under the agreement each party possess non-demarcated portion that is equivalent
to the chosen action the transportable interest that is subjected to the sanction of the state
secretary of the United Kingdom (Pereira 2015). The assignment of the interest of the agreement
was confronted by limitation in the joint operating agreement earlier versions; however, the
governmental authority eradicated them as they are considered as an obstruction to free trading
in UKCS.
Key clauses
The role that has been applied to comprehend the character of both the non-operator and
also operator. The exclusive risk is considered a state where the undertaking has unsuccessful to
attain the sanctioned pass marks by the committee of joint operating however single party elect
to progress anyway with the undertaking (Aires et al. 2018). The drive of sole risk is to safeguard
the economic interest of the participants whereby the suggestion for creating proper investment
in joint venture disallowed by the committee of joint operating or the individual is against the
proposal of termination for the facility of production that supported by him. Furthermore, in the
situation, the taker of the sole risk acquires the liability of the specific activity and also enjoy the
advantages. Thus the Joint operating agreement makes create the section for the taker of the sole
risk to participate in the agreement after punishment to the taker of sole risk or the premium
payment. It is stated that the provisions of sole risk are enhancing important in the United
Kingdom in comparison to the clause of non-consent. It is evident from the 20th draft of Joint
operating agreement that is offered by offshore operators association of the United Kingdom

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presently denote as gas and oil in the country of United Kingdom. The undertaking of non-
consent is where the agreement has decided to the required actions; however, one party had made
decisions to pull out from undertaking. Nevertheless in such situation and in much joint
operating agreement the operator who concluded in adopting the venture of joint risk however
thee are situation where the non-operator concluded being the undertaker of sole risk (Mavridis
2018). The joint operating agreement may make sections where the non-operator are the
undertakers of sole risk the operators stay to act willingly or through an appeal for hand in the
resignation and thus permitting for the employment of new operator by the ones who are non-
operators. This is regarded as significant provisions as it makes the determination of the parties
of Joint operating arrangement. The default clause is applied to indicate the scenario where the
parties have unsuccessful in making payment of final contribution to the agreement that is
referred to as cash call. It is provided by the agreement for the required impact by mentioning
that after the expiry of the specific period. In addition to that the party is in default along with
that relevant intimation served to parties who are at default the parties lose the proportion of
interest that is sanction to the parties in the agreement. The sole risk in the country of United
Kingdom take preference over developments that take place subsequently made by the state
secretary, and reasonable care must be taken for the eradication of disputes in between the
prevalent joint venture as well as the business of sole risk. Furthermore, the parties who are non-
defaulting fail to compensate the necessary monetary obligations according to the joint operating
agreement there may be decommissioning and abandonment of relevant undertaking as well as
the subsequent liabilities sharing in amongst the respective parties.

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Conclusion
Thus it can be concluded from the above-mentioned discussion that the joint operating
arrangement is the conception that is common to the gas and oil industry by which the
corporation joint to institute the base for the worldwide oil corporation for sharing the liabilities
and rights as per the agreement of joint venture under licensing along with that to contribute for
behaviour of operations as per the license. The three chief clauses that are establish under joint
operating agreement ae clause of non-consent as well as sole risk that are applied to comprehend
the character of non-operator as well as the operator by safeguarding the economic interest of the
participants where the suggestion for establishing proper contribution in the agreement of joint
venture has disallowed by the joint operating corporation. The default clause determines the
connection of the respective parties of the agreement and thus applied in the case whereby the
parties have unsuccessful in making payment of economic contribution to the agreement that is
termed as cash call, and the clauses of forfeiture and penalty is the remedy that is exposed to the
non-defaulting parties to the agreement and is able to be articulated by the act of liquidated
compensation and not as forfeiture action.

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