Joint operating agreements—operator and non-operating party perspectives

The following Energy practice note provides comprehensive and up to date legal information covering:

  • Joint operating agreements—operator and non-operating party perspectives
  • The operator's perspective
  • Freedom from undue interference
  • Compellable financial commitments
  • Flexible asset development
  • Manageable information flows
  • The non-operating parties' perspective
  • Adequate operational control
  • Manageable financial commitments
  • Compellable asset development
  • More...

Joint operating agreements—operator and non-operating party perspectives

The principal forum for the battle of wills between the operator and the non-operating parties is the operating committee (OpCom) (at least where a joint operating agreement (JOA) includes the concept of an OpCom—not all do).

This Practice Note presumes that one of the parties to the concession and the JOA has been appointed to act as the operator (rather than that a contracted third party operator has been appointed, although the principles in this paper apply equally in respect of an incorporated operator entity) and that the JOA makes provision for the constitution of an operating committee (OpCom) to represent the interests of the non-operating parties.

For more information on joint operating agreements generally, see Practice note: The purpose and the principles of the joint operating agreement.

The operator's perspective

At the highest level, the role of the operator is to exercise its rights and to perform its obligations under the JOA so as to manage the performance of the joint operations on behalf of all parties, and in doing so to ensure compliance with the terms of the concession and with all applicable laws and regulations.

The concerns of the operator in respect of the management of the JOA typically relate to the following issues:

Freedom from undue interference

The operator will require the freedom to undertake the joint operations without what it

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