joint operating agreement

8/8/2019 Joint Operating Agreement

http://slidepdf.com/reader/full/joint-operating-agreement 1/31

Presented by :

Arun Kumar (09)Maninder Batra (18)

Rahul Tyagi (31)

Vivek Maurya (41)1



JOINT OPERATING AGREEMENTThe Joint operating agreement basically comprisesof the constitution that governs the joint venture

and it spells out the duties and obligations of theoperator.

HOW ITOPERATES

The JOA governs the relationship between theparties, including budget approval and supervision,crude oil lifting and sale in proportion to equity, andfunding by the partners.

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Purpose of JOAy Two or more gas and oil operators can enter into a JOA to

share the risk and expense of gas and oil exploration.

y

One party is given responsibility for day-to-day operations,often charging back expenses to the other participants inthe JOA.

y The operator is able to keep costs down, and the otherparticipants still retain rights to their share of the gas and

oil, which they can use at their own discretion.

y The parties are seldom considered to be in a partnershipunless the agreement specifically states that they are.

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Article 1Definitions & Interpretation

a) Accounting Procedure

b) Work Programmec) Appraisal Programme

d) Approved Budget

e) Cash Call

f) Contract Area

g) Development & Production Operations

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Article 2Effective Date, Duration And Scope

This Agreement shall be effective from the Effective

Date and shall continue in effect for the term of thelicense and any lease granted including theirextensions.

Thereafter until a final settlement of all accounts

among the Parties has been made or terminated earlier in

accordance with the terms of this Agreement orContract.

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Article 3Participating Interest And JointOperations

A :% X :%

Y :%

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Article 4Operator

In accordance with policies, programmes and

budgets approved in accordance with the provisionsof this Agreement.

Subject to Article 4.2, Operator shall be removedupon receipt of notice of occurrence of any of the

certain events.

4.5 refers to change of Operator that occurs pursuantto Article 4.3 or Article 4.4

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Article 5Operating Committee

Operating Committee consisting of one representative

of each of the Parties to this Agreement. The Operating Committee is the co-ordinating body

for the direction, control and administration of the Joint Operations.

Subject to 5.1.: To establish policies from time to timegoverning various aspects or activities of the JointOperations.

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Article 6Program And Budgets:

yOn or before the 1st day of November of each Year, Operator

shall submit to the Parties a recommended operatingprogramme and budget for the Contract Area for thesubsequent financial year, which include as work &expenditure.

yOn or before the 30th of November of each Year, theOperating Committee shall agree upon and adopt anoperating programme and budget for the subsequent Year.

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Operator shall submit to the Parties holding a ParticipatingInterest for prior

approval Authorisation Expenditure Requests (AERs) like-a) Licences - any initial cash payment for a licence.

b) Exploration - quarterly projects for geological andgeophysical work.

c) Drilling.d) Plant and equipment.

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Article 7Costs And Expenses

y All costs and expenses incurred by the Operator on behalf

of the Parties in carrying out Joint Operations under this Agreement shall be borne and paid by the Parties inproportion to their Participating Interests.

yDefault

If any Party fails to pay in full its share of any Cash Call within30 days from the date of cash call (Due Date) as provided inthe body of this Agreement or in the Accounting Procedure,then the operator shall notify all parties of such default nolater than the fifth business day from the due date.

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Cont..Continuation of Default:

After any default has continued for thirty (30) Business Days

from the date of written notice of Default under Article 7.6,the Defaulting Party shall not be entitled to vote on any matter coming before the Operating Committee during theperiod such default continues.

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ARTICLE 8 Ow nershipOf Assets:

y Subject to Article 2 and 8.3 hereunder, all assets acquired

by Operator for the Joint Operations shall be owned by theParties in proportion to their respective contributions to thecosts of acquisition of such assets.

y whenever Operator considers that any Joint Operationsasset is no longer needed in carrying out of the Operations,

Operator shall notify the Parties and such surplus assets shallbe disposed of as provided in Article 9.4

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ARTICLE 9 Information, Reports And Confidentiality

Daily well progress report (for Exploration and Appraisal

Wells) which shall include for the day concerned, a brief description of the work performed, the number of feetdrilled, the type and depth of the formation or formationspenetrated, the size and landed depth of any casing landed,the type and results of any tests made, and such other well

information or data as the Parties from time to time may reasonably specify.

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ARTICLE 10 W ork Programme Commitment

The Parties shall carry on the Work Programme as given in

the Contract. In case of Minimum Work Programme, theOperator is authorised to take all actions necessary as per thecommitment made in the Contract notwithstanding any difference of opinion in Operating Committee. The decisiontaken by the Operator for meeting the contractual

commitment with respect to Minimum Work Programmeshall be final and binding on the Parties.

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ARTICLE 11

RELINQUISHMENT : The Parties holding a Participating Interest shall make reasonable best

efforts to reach agreement on the area proposed to be relinquished onehundred twenty (120) days before such relinquishment is required to bemade. If such Parties are unable to reach unanimous agreement ninety

(90) days prior to the date on which the area or areas must berelinquished.

a) In the event Parties holding at least sixty percent (60%) of the totalParticipating Interests agree on an area or areas to be relinquished,such area or areas shall be relinquished.

b) Each Party shall select a proportionate part of the remaining area orareas to be retained equal to its Participating Interest.

The Operator shall proceed in a timely manner to relinquish the areaor areas determined in accordance with the foregoing procedures and

pursuant to Act and Rules. 16



ARTICLE 12 W ithdra w al

y Any Party may withdraw from this Agreement at any time

provided that during the Exploration Period no Party shall withdraw until all the Exploration Operations obligationshave been met and completed.

y The Party desiring to withdraw (hereinafter called theWithdrawing Party) shall give notice of intention to withdraw to the other Parties at least forty five (45) days inadvance of the date of withdrawal

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ARTICLE 13 Sale, Transfer And Assignmenty The right to sell, assign or transfer a Participating Interest, in whole orin part, shall be subject to the consent of other Parties and to the terms of the Contract.

y Any Party shall have the right at any time, with or withoutcompensation, to sell ,transfer and assign to an Affiliate all or part of itsright, title and interest in the Contract Area.

y Rights of First Refusal- If any Party wishes to sell any part of its

Participating Interest it shall notify each of the other Parties in writing(price and other material commercial terms).Each of the other Partiesshall then have a period of forty-five (45) days to make a counter offer in

writing to, and negotiate with, the Transferring Party for all or part of theSale Interest. Transferring Party can accepts or reject such offer.

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y All costs of sales, transfers and assignments, includingnotarial and registration fees, tax or other expense of whatsoever kind and nature ,shall be the sole obligation of the assignor Party(ies).

y Such transfer to a third party shall have been completed(other than for receipt of GOI approval) within ninety daysfrom the end of the JV Negotiating Period.

Cont..

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ARTICLE 14ForceMajeurey Any non-performance or delay in performance by any Party hereto

of any of its obligations under this Agreement or in fulfilling any condition of any licence or lease granted to such Party, or in meetingany requirement of the Act, such non-performance or delay inperformance is caused by Force Majeure as defined in this Article.

y The term Force Majeure shall include natural phenomena orcalamities, earthquakes, typhoons, fires, wars declared orundeclared, hostilities, invasions, blockades, riots, strikes,

insurrectionand civil disturbance.y Where a Party is claiming suspension of its obligationson accountof

Force Majeure, seven (7)days after the occurrence of the event of ForceMajeure, notify the other Parties in writing giving full particulars of the Force Majeure, the estimated duration thereof, the obligationsaffected and the reasons for its suspension.

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ARTICLE 15 RelationshipOf Parties,Mutual Indemnities And

No Partition

ySeveral Liability

y Mutual Indemnities

y No Partition

y Co-venture(s) undertake(s) that differences or disputes

between them shall not under any circumstances affect the dueperformance of their obligations.

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ARTICLE 16 Notices

y Any notice or other communication provided for in this Agreement

shall be in writing and shall be deemed to have been properly given ordelivered when delivered in person to an authorised representative of the Party to whom it is addressed, or when sent by airmail, electronicmail, facsimile, telex, telegram or cable to the Party at its addresshereinafter specified:

The Company Secretary

Telex No : 031-65184/66262

Fax No : +91-11-3316413

and shall be effective from the date of receipt thereof.

y Any Party may from time to time change its address under this Articleon fifteen (15) days notice to the other Party (ies).

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ARTICL

E 17

TerminationThe Agreement may be terminated in accordance with terms andconditions described hereunder.

y By giving ninety (90) days written notice of to the other Partiesof its intention to do so in the following circumstances:

A. If the other party has knowingly submitted any false statementto any party in any manner which was a material consideration

in the execution of Bidding Agreement and this Agreement.B. Is adjudged bankrupt by a competent court or enters into or

scheme or composition with its creditors or takes advantages of any law for the benefit of debtors; or material particular

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C.Has passed a resolution to apply to a competent court for its liquidationunless the liquidation is for the purpose of amalgamation orreconstruction of which the party has given notice and the party issatisfied that the performance under this Agreement would not beadversely affected thereby and has given its approval thereto.

D. Has assigned any interest in the Agreement without the prior consentof the Other Parties.

E.Has failed to make any monetary payment required by law or under this Agreement by the due date or within such further period after the duedate as may thereunder be specified by the Government or any of its

Authorities.

F. Has failed to comply with or has contravened the provisions of the Agreement

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ARTICLE 18

y All differences relating to, disputes arising out of in connection withthis Agreement, which cannot be amicably resolved by the Parties

shall be referred to Arbitration in accordance with Arbitration andConciliation Act, 1996.

y The Arbitral Tribunal shall consist of three Arbitrators. Each party shall appoint one Arbitrator notifying the differences / disputes to beadjudicated by the Arbitrators. The two Arbitrators appointed by theParties shall appoint the Third Arbitrator i.e. Presiding Arbitrator.

y The venue of Arbitration shall be New Delhi (India).

y A reasoned decision in writing by the arbitrators shall be issued notmore than 30 days following the conclusion of the arbitration hearing.

Arbitration

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ARTICL

E 19

Applicable La w

y This Agreement shall be governed by and interpreted

in accordance with the Laws of India ,both substantiveand procedural. Delhi Courts in India shall haveexclusive jurisdiction in all matters arising under this

Agreement.

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ARTICLE 20

General

y No waiver by any Party of any provision of this Agreement, no consent to or departure therefrom

shall be binding unless made expressly and confirmedin writing by authorised representatives of the Parties.

y This Agreement may be amended or varied only by an

instrument in writing executed by all of the Parties.

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y Conf lict of Interest

Each Party undertakes that it shall avoid any conflict of interestbetween its own interests and the interests of the other Parties indealing with suppliers, customers and all other organisations orindividuals doing or seeking to do business with the Parties inconnection with activities contemplated under this Agreement.

The provisions of the proceedings paragraph shall not apply to:

(1) A Partys performance which is in accordance with the localpreference laws or policies of the host government; or

(2) A Partys acquisition of products or services from an Affiliate, orthe sale thereof to an Affiliate, made in accordance with rules andprocedures provided in this Agreement.

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y Public Announcements

Operator shall be responsible for the preparation and release of all public

announcements and statements regarding this Agreement or the Joint

Operations; provided that, no public announcement or statement shallbe issued or made unless prior to its release all the Parties have been

furnished with a copy of such statement or announcement and the

approval of Parties has been obtained.

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Severance of Invalid Provisions

If any provision of this Agreement is deemed or declared to be Invalid for any reason whatsoever, such invalidity shall not affect the validity or operation of any other provision of this Agreement except only so far as shall be necessary to give effect to the construction of such invalidity, and any such invalid

provision shall be deemed severed from this Agreement without affecting the validity of the balance of this Agreement.

Modifications

There shall be no modification of this Agreement except by writtenconsent of authorised representative of all Parties.

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THANK YOU

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joint operating agreement

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