Wednesday 5 December 2007

Oil & Gas UK launches new joint operating agreement at industry seminar

Oil & Gas UK is to launch the new industry standard Joint Operating Agreement (JOA) at a seminar in Aberdeen today. Most oil and gas fields on the UK continental shelf (UKCS) are jointly owned by several companies and the JOA sets out the shares of those co-venturers. The agreement also details the way in which they will work together to operate the asset, share and account for costs and revenues, and ultimately handle its decommissioning.

Paul Dymond, Oil & Gas UKs operations director, said: The long-term future of the North Sea industry is dependent on maximizing the recovery of the UKs remaining oil and gas reserves. In order to ensure the longevity of our industry it is important to develop best practice and to continue evolving those agreements which facilitate successful partnerships.

With much advice from legal experts, two industry work groups addressed the content of the agreement, its tie-in with the new Decommissioning Cost Provision Deed (DCPD) and the accounting guidelines, which have also been updated recently.

Paul Dymond continued: The standard JOA has been updated to reflect new regulations and practices which have been enforced over the last five years and to rectify some inconsistencies within the document. It was also decided that input from a wider cross-section of industry while upgrading the JOA would encourage more extensive use in the commercial environment.

Oil & Gas UK hopes to maximise industry buy-in to the new standard JOA. The seminar is being held to inform industry of changes to the agreement and the options that now exist within it, which have the potential to improve joint venture business processes. To encourage adoption of the JOA by industry, its design must ensure it is as useful as possible and delegates opinions on whether the agreement should be further shaped and improved will be gathered.

The new industry standard JOA and its supporting documents are available at www.oilandgasuk.co.uk

Ends

Sally Fraser                                      

Oil & Gas UK Media Relations                 

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Email: sfraser@oilandgasuk.co.uk

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