Recent changes in local laws in various countries set requirements for Essay

Recent changes in local laws in various countries set requirements for National Oil Companies (NOCs) participation in oil and ga - Essay Example Joint ventures are common among the operators within the oil and gas industry in order to tray and minimize operation risks as well as technical challenges often faced while in the normal operations in the industry. Companies involved in exploration of oil and gas, general exploitation of the same as well as appraisal and production activities are in recent times being not executed by single companies but through collaboration by many companies. These joint ventures therefore share in towards contributing for expenditures and other costs incurred and share the proceeds realized in the exploration and exploitation of the commodity according to individual company’s contributions. Joint ventures operate on the platform of sharing on capital investments as well as skills and expertise, which necessitates one company, which would lack such to benefit from the partner(s) in the venture. Joint ventures within the oil and gas industry enjoy such privileges as being unincorporated and hence they are not taxed and cannot sue or are sued for the reason of not having distinct legal personality. The terms of licensure of operations by joint ventures imposes some liabilities on them as stipulated by the governing authority, which the joint operating agreement purposely addresses. The JOA therefore have particular roles in regulating the obligations, relationships as well as the rights that govern the parties in a joint venture. Normally, the agreement is binding over lifetime or until the joint operations ceases because of completion of a task or otherwise as would be determined in termination of a contract. It stipulates the funding procedures as well as the voting procedures and has other stipulations on mechanisms to address corrective measures instituted in the event that a partner fails to act in accordance to the agreement. Therefore, the general infrastructure of the legal framework guiding the joint operating agreements is binding and well laid out. The partie s therefore undertake a critical outlook into the structure of the JOA regarding any unforeseen eventualities, which would occur in the future. However, it is worth noting that the formulation and adoption of a JOA framework must be based on an existing legal structure such as the English law, which then stipulates the institutional framework that would govern the running of the agreement between the parties engaged in the joint venture (Jensen and Failat, 2013, p. 1-13). National governments as well as foreign companies interact in the industry of oil and gas through consent through negotiated contracts. NOC (National oil companies) normally gets involved in the exploitation of and exploration for oil through signing into contracts such as concession agreements, service contracts, joint venture contracts as well as production sharing agreements, which involves collaborating with other external companies in the oil and gas deals. Nevertheless, the operations of such contracts involv ing the national oil companies as well as other external companies necessitates the operation-ization of a structure that would be instrumental in outlining the operations of the agreement and this is formalized through the JOAs. The evolution of legal structures that govern the