Review article

Agreement on joint ventures in the oil sector

Ratko Brnabić ; Pravni fakultet Sveučilišta u Splitu
Marko Ivkošić ; Pravni fakultet Sveučilišta u Splitu

Abstract

Ventures in the field of exploitation of hydrocarbons are expensive and complex operations. They require the participation of partners who have sufficient financial resources, special expertise and skills. The paper discusses major issues that should be regulated by these contracts. The aim of the joint venture in the field of oil exploitation consists, in simple terms, of the research phase, of drilling and well completion phase and of setting up the production plant, i.e. the production phase. Undertaking is conducted in the form of partnership or in form of capital company. Thus, the initial articles of the contract provide definitions of terms. Then the agreement regulates the issue of partners shares entered into a joint venture and in particular the value of each share. In the agreement, the partners must identify all the essential information about the exploration field and wells. The agreement should regulate the legal status of operators, insurance funds, the standard of quality in the performance the right to information and monitoring. Partners must accept the financing plan and set rules for the case that one of the partners does not meet its obligations under the financing plan. Partners must decide on the right to transfer shares to other partners or third parties. Furthermore, the contract must regulate the issue of termination and legal consequences of such a declaration but also set the conditions for a valid termination. The contract must also provide a mechanism to resolve conflicts and must specify which law applies in the event of a dispute.

Keywords

Joint venture; Exploitation of hydrocarbons; Partnerships; liability for obligations; Concessions in the oil industry

Hrčak ID:

129106

URI

https://hrcak.srce.hr/129106

Publication date:

22.10.2014.

Article data in other languages: croatian

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