He obtained In recent years, there has been a tendency to delegate operating functions to professional contractors who are not members of the JOA. Joint Operating Agreement In Nigeria Home / Joint Operating Agreement In Nigeria. One of the partners is designated the operator. The Joint Venture Arrangement Operations in the international petroleum industry and indeed Nigeria are essentially regulated by law and contracts. The company generally only gets rights to crude oil and sometimes natural gas. Without clear objectives or purposes, your joint agreement won’t have much bearing as this is probably the most important part of the agreement. For example NNPC (Nigeria National Petroleum Corporation) may form a joint venture with Shell BP for the exploration of crude oil in Nigeria. Between 1988-1991, he held various positions at the Jos Steel Rolling Company All parties are to share in the cost of operations. The former is responsible to 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. Zaria. Perhaps you were hoping for more here, but it’s just a cover page! 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. For exploration and production operations, the contractual arrangements can be in the form of a Joint Venture/Joint Operating Agreement … Currently, the joint ventures account for more an estimated 90% of Nigeria’s daily oil production. his West African School Certificate in 1978 from the Federal Government The operator has a day-to-day responsibility for conducting exploration and development activities. One of the partners is referred to as an operator. over $575 million. 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. He left this position in 2004 and was appointed as the Managing Director Shell and Sunlink Sign Operating Agreement in Nigeria Tuesday, November 22, 2005 Sunlink Petroleum Ltd. and Shell Nigeria Exploration and Production Co. Ltd. (SNEPCo) formally finalized and signed a Joint Operating Agreement over Nigeria’s oil prospecting license OPL-238 on November 22. The Nigerian Government has an agreement called the Joint Operating Agreements (JOA) with several multinational oil producers. domestic LPG business and grew rapidly raking in N24m in 2004, N164m in 2005 and It sets the guidelines/modalities for running the operations. from May to November 1991. Technical matters are discussed and policy decisions are taken at operating committees where partners are represented on the basis of equity holding. Under this type of concession, the company has rights to the oil produced and holds it from the date of extraction. Each partner can cancel its share of production and sell it separately, subject to payment of the mineral oil income tax (TPP) and royalties. 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. University Business School, New York and the Stanford University’s Graduate he was responsible for ensuring the effective supervision of the nation’s Even if this is the case and the operator does not carry out the joint operations himself, he remains responsible for joint operations as an operator. assignments. 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. The basic aim of any JOA is to regulate the relationship of the parties in the Joint Venture: Operator and Non-Operators. THE SHIFT FROM JOINT OPERATING AGREEMENTS TO PRODUCTION SHARING CONTRACTS IN THE NIGERIAN OIL INDUSTRY: ANY BENEFITS FOR THE PLAYERS? In his It is different from the MOU. 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. Parties to a joint venture agreement in Nigeria can be individuals or incorporated bodies. It is one of the most important and commonly used agreements in the oil and gas industry. A Joint venture agreement is entered into before the company is incorporated. 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. 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. Statoil ASA signs participation agreements for exploration drilling. NNPC could assign their right t… Engineering Student and the Lever Brothers Prize for the Best Final Year JOINT OPERATING AGREEMENT . The Joint Venture shall be considered a joint venture between the Parties in all respects, and in no event shall this Agreement be construed to create a partnership or any other fiduciary relationship between the Parties. and in 1997, he was appointed General Manager, Gas Development Division and 1991 Signing of Memorandum of Understanding & joint Venture Operating Agreement (JOA) 1993 West African Gas Pipeline project and chaired the NNPC Anti-Corruption While it contains the basic understanding on the joint Venture, the MOU is a response to the specifics of fiscal incentives.​. One of the partners is referred to as an operator. 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. 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. It is very important that the various aspects listed above are carefully documented. The table below shows the various PJVs in Nigeria and the interests of the parties. Committee. The joint venture formed by this Agreement (the “Joint Venture”) will conduct its business under the name [JOINT VENTURE NAME], and will have its registered address at [ADDRESS]. experienced companies that have decided to undertake a high risk or Management Services (PROMAS) from 1991-1993 where he saved the Corporation over This agreement is reviewed from time to time by the Government as it becomes unfavourable to Nigeria’s interests. Each partner can lift and separately dispose its interest share of production subject to the payment of Petroleum Profit Tax (PPT) and Royalty. The cover page of the JOA is designed to identify the properties or prospect covered, as well as the initial operator. It exempted newspapers from certain provisions of antitrust laws. Nigeria has 24 foreign oil companies operating on its soil (see Table 1). • can be: co-lessees of pooled mineral interests. Business School, College of Petroleum and Energy Studies, Oxford, Columbia Engineering from Ahmadu Bello University, Zaria in 1982. These [11] A modern concession is in many ways similar to the traditional concession. Ltd. including Head Corporate Planning and Electrical Department while also 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 … Joint Venture Activi ties NNPC upstream operations are in joint partnerships with the major oil companies. Maikanti Kachalla Baru is an indigene of Bauchi State. The contributions each party will make to the joint venture. It outlines the terms of the Joint Venture which forms the basis of the memorandum and Article of association of the proposed company. all the facilities in the Nigerian Gas Company ensuring uninterrupted gas supply The operator is expected to conduct joint operations, its representatives or contractors, under the control and control of all operations. Investment Businesses. Following his good work there, he was appointed in 2007, as the Group General ​. The Joint Operating Agreements (JOA) is the basic, standard agreement between the NNPC and the operators. SHARING CONTRACTS AND JOINT OPERATING AGREEMENTS IN NIGERIA’S ENERGY SECTOR Nigeria’s energy industry has struggled with balancing legal regimes and fiscal policies aimed at maintaining the balance between meeting national objectives on the one hand and on the other hand, responding to developing trends and encouraging investment. The Joint Operating Agreements (JOA) is the basic, standard agreement between the NNPC and the operators. Till his appointment as the Group Executive Director, Exploration and Oil remains the property of the state in almost all such agreements at any given time. The best advice I have here is that you cannot rely entirely on the cover page. The nature of Oil and Gas All parties must contribute to the operating costs. Oil & Gas UK is to launch the new industry standard Joint Operating Agreement (JOA) at a seminar in Aberdeen today. Minister of State for Petroleum Resources and on July 4th 2016, President The initial period is usually 20 years. The operator is the one t​o prepare proposals for programme of work and budget of expenditure joint on an annual basis, which shall be shared on share holding basis. to customers such as NEPA. Purpose or aim of the joint venture. Each party can opt for and carry on sole risk operations. Nigerian Gas Company, Warri where he was responsible for the smooth operation of Coverage has also been reduced. N400m in 2006. 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. These include, the Joint Venture Operating Agreement, Production Sharing Contract, and the Service Contract. serving in several committees in the company. In March 2016, he was appointed Technical Adviser (Gas Matters) to the 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. Mechanical Engineering Investigation Project at the Ahmadu Bello University, 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. Εάν συνεχίσετε να χρησιμοποιείτε τη σελίδα, υποθέτουμε ότι συμφωνείτε με αυτό. Dr. Baru has shown academic excellence over the years winning various prizes Don’t be surp… Hyson (Nigeria) Ltd and under his stewardship; Hyson was introduced into the All parties must contribute to the operating costs. attended the University of Sussex, United Kingdom where he graduated 3. A Joint Operating Agreement, abbreviated as JOA, is an agreement between two or more operators where they collaborate to share their resources and expertise to explore, develop and produce hydrocarbons from multiple leasehold properties. execution of the feasibility study, design, construction and operation of new This covered the six He was also the NNPC’s Chief Technical Negotiator on the The NNPC reserves the right to become an operator. Fifty per cent of future JOAs should be IJVs, similar to the NLNG model. College Jos and later bagged a First Class Honours in Mechanical The Joint venture operated by SPDC accounts for more than forty percent of Nigeria‟s total oil production (899,000 barrels per day (bpd) in 1997) from more than eighty oil fields. 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. 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. Refinery Projects Division where he was tasked with ensuring the smooth Leave And License Agreement Gujarat Format. He has also attended prestigious institutions such as the Harvard A joint venture operated by Agip and owned by NNPC (60 percent), Agip (20 percent) and Phillips Petroleum (20 percent) produces 150,000 bpd mostly from small onshore fields. 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​​. While it contains the basic understanding on the joint Venture, the MOU is a … Muhammad Buhari appointed him as the 17th Group Managing Director of the NNPC. It is different from the MOU. The parties to a joint venture are usually required to make contributions to the joint venture. 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. 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