1.1.29 “Joint Operating Agreement” means the agreement between YFP, Syntroleum and the International Operator governing operations in the OML 113 Lease, such agreement to be negotiated by the parties, as such agreement may be amended from time to time hereafter.The basis for such agreement shall be the 1995 Model Form International Operating Agreement of the Association of … It is different from the MOU. refineries in Nigeria. The parties to a joint venture are usually required to make contributions to the joint venture. The best advice I have here is that you cannot rely entirely on the cover page. Don’t be surp… Nigerian Gas Company, Warri where he was responsible for the smooth operation of Joint Operating Agreements (JOA) are well accepted standard agreements in the oil and gas industry. 2014; 2(2):35-44. doi: 10.12691/jbms-2-2-2. The NNPC reserves the right to become an operator. Changed name to Shell Petroleum Development Company of Nigeria (SPDC) 1984 Agreement consolidating NNPC/Shel1 joint Venture. investors who are participating in a promoted prospect for the first time. Journal of Business and Management Sciences . Production, Dr. Baru was the Group General Manager LNG Division. JOINT OPERATING AGREEMENT . It is also an agreement under which the oil company obtains the exclusive right to explore oil and, when oil is discovered, to produce, market and transport. domestic LPG business and grew rapidly raking in N24m in 2004, N164m in 2005 and He has also attended prestigious institutions such as the Harvard Mechanical Engineering Investigation Project at the Ahmadu Bello University, all the facilities in the Nigerian Gas Company ensuring uninterrupted gas supply It exempted newspapers from certain provisions of antitrust laws. He was also the NNPC’s Chief Technical Negotiator on the This covered the six Thus, business vehicles known as joint ventures are the main way by which international oil companies come together to offset costs and to share risks. Nigeria had in the past years engaged in Joint Venture Agreement (JVA) for the exploration of her petroleum resources. A Joint Operating Agreement is a contractual agreement between two or more parties establishing and setting out the terms of a joint venture between them under which petroleum exploration, development and production operations will be conducted.  A modern concession is in many ways similar to the traditional concession. over $575 million. Under this type of concession, the company has rights to the oil produced and holds it from the date of extraction. School of Business among others. After the election and payment, these transactions are carried out as joint transactions. These multi-national Exploration & Production companies are operating predominantly in the on-shore Niger Delta, coastal offshore areas and lately in the deepwaters. The Nigerian Government has an agreement called the Joint Operating Agreements (JOA) with several multinational oil producers. Purpose or aim of the joint venture. Refinery Projects Division where he was tasked with ensuring the smooth Committee. While it contains the basic understanding on the joint Venture, the MOU is a response to the specifics of fiscal incentives.. The operator is the one to prepare proposals for programme of work and budget of expenditure joint on an annual basis, which shall be shared on share holding basis. Oando Exploration and Production Limited (OEPL), and its Local Content Vehicle (LCV) partner, Arc Oil and Gas, under the umbrella of Alliance Oil Producing Nigeria Limited, has signed a Joint Operating Agreement (JOA) with Nigerian Agip Oil Company (NAOC) on OPL 282, which was awarded by the Federal Government during the 2005 bid … $70 million in six months of operation. from May to November 1991. The NNPC reserves the right to become an operator. with a Doctor of Philosophy in Mechanical Engineering in 1987. A joint venture between NNPC (60 percent) and Mobil (40 percent) operates in shallow water off Akwa Ibom state in the southeastern delta and averaged production of 632,000 bpd in 1997, making it the second largest producer, as against 543,000 bpd in 1996. attended the University of Sussex, United Kingdom where he graduated Currently, the joint ventures account for more an estimated 90% of Nigeria’s daily oil production. It is now mentioned by different names, such as license or leasing, but it is still the most commonly used type of agreement. Joint Operating Agreements (JOA) The JOA is the basic, standard agreement between the NNPC and the operators. The Petroleum Act should be amended to enable federal government advice parties to the existing JOA to come up with an incorporated joint venture (IJV) arrangement similar to the Nigerian Liquified Natural Gas (NLNG) Model, especially JOAs grappling with the issue of default in cash calls. JOA are common both in the United Kingdom Continental Shelf (UKCS) and globally. Since 2000, it has been the framework for EU relations with 79 countries from Africa, the Caribbean and the Pacific (ACP), including Nigeria. Engineering Student and the Lever Brothers Prize for the Best Final Year From 2006 to 2007, Dr. M.K Baru was the Group General Manager, Greenfield Dr. Baru has shown academic excellence over the years winning various prizes It sets the guidelines /modalities for running the operations. The right to operate should be vested in the federal government, that is the NNPC, for JVs that are not incorporated. The joint venture is composed of NNPC (55 per cent), Shell (30 per cent), Elf (10 per cent) and Agip (5 per cent) and operates largely onshore on dry land or in the … It sets the guidelines/modalities for running the operations. The operator has a day-to-day responsibility for conducting exploration and development activities. and in 1997, he was appointed General Manager, Gas Development Division and In July 1999, he was appointed as the Executive Director, Operations of the The table below shows the various PJVs in Nigeria and the interests of the parties. Perhaps you were hoping for more here, but it’s just a cover page! MADAKI O. AMEH∗ Madaki.O.Ameh@shell.com ABSTRACT: The Oil and Gas industry is the mainstay of Nigeria’s economy, accounting for over 95% of her foreign exchange earnings and 40% of her GDP. Kaduna Refining & Petrochemical Company (KRPC), Warri Refining & Petrochemical Company (WRPC), The participation Agreement sets out the level of participation of each party in running the affairs of the company, The agreement determines the interests and obligations, The agreement ownership of production facilities, assets. THIS AGREEMENT, executed this 15th day of August 2006, is made as of the Effective Date among: (1) TULLOW GHANA LIMITED, a company incorporated in Jersey, Channel Islands with its registered office at PO Box 532, Channel House, Green Street, St Helier, Jersey, Channel Islands, JE4 5LW; (hereinafter referred to as “Tullow”); It is different from the MOU. Technical matters are discussed and policy decisions are taken at operating committees where partners are represented on the basis of equity holding. capacity, he handled the commercial and administrative aspects of the LNG An Introduction To Joint Operating Agreements – Part 1 It is a well known fact that economic activities such as oil and gas exploration are fraught with high costs and extreme risks. In March 2016, he was appointed Technical Adviser (Gas Matters) to the N400m in 2006. Joint Operating Agreement In Nigeria Home / Joint Operating Agreement In Nigeria. The operator`s main tasks are that this general allocation of authority is also subject to an additional restriction that these operations are “authorized and necessary through and within the framework of this agreement.” Since most important decisions regarding the completion of a new project or the closing of an existing project are governed by other express provisions, the JOA has the effect that the operator has control over how activities are to be carried out on a daily basis after the authorization, but not, as a general rule, the ability to determine which transactions must be carried out jointly by the parties. All rights reserved. Μετά από 25 χρόνια συνεχόμενης ανάπτυξης η εταιρία σήμερα έχει καταφέρει να υλοποιήσει και να συντηρεί ένα σημαντικό αριθμό έργων στην περιοχή. such as the Shell BP Petroleum Prize for the Best Final Year Mechanical NNPC could assign their right t… Each partner can cancel its share of production and sell it separately, subject to payment of the mineral oil income tax (TPP) and royalties. Till his appointment as the Group Executive Director, Exploration and The operator is expected to conduct joint operations, its representatives or contractors, under the control and control of all operations. 3. He obtained College Jos and later bagged a First Class Honours in Mechanical Mobil also holds a 50 percent interest in a Production Sharing Contract for a deep water block further offshore, and is reported to plan to increase output to 900,000 bpd by 2000. The paper examines the Joint Operating Agreement (JOA) with a view to ascertaining the purposes of sole risk and non-consent clauses in JOA and their incompatibility or otherwise with the joint objectives of the agreement. The nature of Oil and Gas Fifty per cent of future JOAs should be IJVs, similar to the NLNG model. In recent years, there has been a tendency to delegate operating functions to professional contractors who are not members of the JOA. to customers such as NEPA. For exploration and production operations, the contractual arrangements can be in the form of a Joint Venture/Joint Operating Agreement … This agreement is reviewed from time to time by the Government as it becomes unfavourable to Nigeria’s interests. The cover page of the JOA is designed to identify the properties or prospect covered, as well as the initial operator. Production Sharing or Joint Venturing: What Is the Optimum Petroleum Contractual Arrangement for the Exploitation of Nigeria Oil and Gas?. This JVA in Nigeria was associated with poor funding, due to the imbalance in the financial capacity of the different Joint Venture Partners, especially the Nigerian government which has other pressures on its resources. It outlines the terms of the Joint Venture which forms the basis of the memorandum and Article of association of the proposed company. There is less certainty as to whether or not there is an “inherent” right of the operator to change the nature of the transaction, as originally approved by the parties. execution of the feasibility study, design, construction and operation of new “A non-single risk party may at any time choose to participate in a single risk transaction by paying the sole part at risk an amount corresponding to its share of the participating interest in the cumulative costs and expenses of the single risk transaction incurred on the date of that election, plus 200% of that amount (revenue penalty). In his The NNPC reserves the right to become an operator. The operator is the one who prepares proposals for the work programme and the expenditure budget on an annual basis, distributed on the basis of participations. Every joint venture should have a specific purpose or project it intends to accomplish. joint ventures, sixty-two production-sharing contracts and other ad-hoc It is one of the most important and commonly used agreements in the oil and gas industry. He became the Manager, Operations of Procurement Shell Petroleum Development Company of Nigeria Limited (SPDC): A joint venture operated by Shell accounts for more than forty per cent of Nigeria’s total oil production (899,000 barrels per day (bpd) in 1997) from more than eighty oil fields. All parties must contribute to the operating costs. For example NNPC (Nigeria National Petroleum Corporation) may form a joint venture with Shell BP for the exploration of crude oil in Nigeria. Διεύθυνση Λαρίσης & Παπατσώνη, Κοζάνη Ελλάδα, Copyright Databank 2018. All parties are to share in the cost of operations. Hyson (Nigeria) Ltd and under his stewardship; Hyson was introduced into the These include, the Joint Venture Operating Agreement, Production Sharing Contract, and the Service Contract. University Business School, New York and the Stanford University’s Graduate Maikanti Kachalla Baru is an indigene of Bauchi State. Oil & Gas UK launches new joint operating agreement at industry seminar. . Kerr-McGee, Dominion Exploration & Production and Statoil are parties to a joint operating agreement covering drilling of a deepwater exploration well in Atwater Valley block 140 on the Claymore prospect. 1986 Signing of Memorandum of Understanding (MOU) 1989 Fifth Participation Agreement; (NNPC=60%, Shell = 30%, Elf=5%, Agip=5%). Ltd. including Head Corporate Planning and Electrical Department while also Statoil ASA signs participation agreements for exploration drilling. The basic aim of any JOA is to regulate the relationship of the parties in the Joint Venture: Operator and Non-Operators. Particulars of initial contribution by the parties. Business School, College of Petroleum and Energy Studies, Oxford, Columbia One of the partners is referred to as an operator. serving in several committees in the company. While it contains the basic understanding on the joint Venture, the MOU is a … By WP Dec 5, 2007 Press Release 0 Comments. his West African School Certificate in 1978 from the Federal Government experienced companies that have decided to undertake a high risk or This allows for quick access to information at a glance for operations teams, as well as acquisition and divestiture teams. The Newspaper Preservation Act of 1970 was an Act of the United States Congress, signed by President Richard Nixon, authorizing the formation of joint operating agreements among competing newspaper operations within the same market area. All or part of the re-entry fine is paid in cash in the currency where the only cost of risk is borne, or in the form of in-kind benefits or both, as agreed by consensus between the parties. The company generally only gets rights to crude oil and sometimes natural gas. Each party can opt for and carry on sole risk operations. One of the partners is designated the operator. Between 1988-1991, he held various positions at the Jos Steel Rolling Company Joint Operating Agreement (JOA) is the common methods through which companies join to form a joint venture in their exploration and production of oil and gas. One of the very important rights found in these operating agreements is the right of a partner to transfer its interest in the joint venture. Oil industry sources indicate that Mobil is likely to overtake Shell as the largest producer in Nigeria within the next five years, if current trends continue. 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