Key Learning Objectives
- Appreciate the key attributes of the joint venture business structure as well as the risks and benefits associated with forming joint ventures
- Understand the strategies required to effectively secure suitable partners and operators which are complimentary for the project being undertaken
- Gain detailed knowledge of how joint ventures work in practice and the important commercial terms that require particular attention
- Discover the tools and techniques required to maximise the benefits of joint ventures for your company
- Learn important negotiation skills and strategies to deliver desired commercial outcomes
- Review other ancillary agreements to the joint venture operating agreement and understand their purpose
About the Course
Joint ventures are the most common business arrangement for oil and gas companies engaging in exploration, appraisal, development and production operations.
The ability for oil and gas professionals to effectively interact with their counterparts within the commercial and technical constraints of a JV is an important skill. It requires a clear understanding of their own Company’s desired position and recognition of the objectives of each other partner in the JV.
This one day course is designed to equip participants with the knowledge required to establish well-structured and balanced joint ventures that will lead to commercial success and further partnership opportunities.
The program is focused on providing participants with an understanding of the key elements of joint venture operating agreements, develop effective negotiation strategies during the joint venture formation phase, appreciate the rights and responsibilities of operators and non-operating partners and if required, understand the options for conflict resolution.
Hands on negotiations exercises and case studies using industry based scenarios will reinforce the strategies required to implement predetermined technical and commercial objectives via a commercial arrangement.
Participants should in turn be able to appreciate the attributes of suitable partners and preferred operators required for a successful JV and develop conflict resolution strategies to avoid unnecessary value destruction from unresolved conflicts.
Case studies will be used to simulate joint venture formation and negotiation.
Who Will Benefit
This course is aimed at oil and gas professionals involved in establishing or managing upstream joint venture relationships on behalf of their companies. It is intended that this course provides the necessary tools and knowledge required to negotiate, execute and administer successful joint ventures. It is suitable for management of Major oil and gas companies, IOCs and NOCs
“Very approachable Encourages discussion and tailors material to the needs of the class”
LNG Offtake Coordinator, Woodside
Introduction to types of Joint Ventures
- Asset Joint Venture
- Business Joint Venture
- Marketing Alliance
The Role of Joint Venture in the oil & gas industry
- Joint Venture Agreement evolution during the oil and gas project life cycle
- Joint Venture SWAT analysis
- Governing law and arbitration
- Corporate drivers and strategies
- Relationships with host governments
- Contrast of key drivers between IOCs and NOCs
Joint venture negotiation and formation
- Joint ventures operating principles
- Roles of Operators and non-operating participants
- Partner selection criteria
- Guidelines for successful joint ventures
- Negotiating and setting up joint ventures – key agreements and issues
Key accounting and financing provisions
- Cost control and management systems
- The JOA accounting procedure
- Cash calls, mechanisms/methodologies, notices late payments, defaults, remedies
- Carried interests
- Approval limits
Common ancillary agreements
- Joint Bidding Agreements
- Farm in Agreements
- Joint Marketing Agreements
- Field unitisation agreements
Agreement cost, risk and value balance
- Assessing the value, costs and liabilities
- Striking the right balance of risk and reward
- Strategies for minimizing costs, liabilities and risks
- The effects of recent oil price and regulatory trends impacting joint ventures
Case study – Joint Venture formation and negotiation
The Joint Venture Agreement (Agreement Walk Through) including the following
- Work programs and budgets
- Voting provisions
- Abandonment provisions
- Role Technical Committee and Operating Committee
- Operator and non-operator rights and responsibilities
- Sole risk and non-consent provisions
- Notices, defaults remedied and penalties
- Force majeure
- Transfers and Pre emption
- Accounting Procedures
On-site & in-house training
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