The Joint Operating Agreement

Following the entry into a Joint Study and Bidding Agreement ("JSBA") and the submission of an application for the award of a new licence on a consortium basis, where a licence application has been successful on that basis the immediate focus of the consortium parties should be on the entry into a joint operating agreement ("JOA") in order to provide for the impending unincorporated joint venture to be effective.

The JOA is the vehicle necessary to structure and govern the unincorporated joint venture and to allocate the joint venture's liability to the government amongst the joint venture members. The unincorporated joint venture lacks any inherent constitution, save for that which may have been contemplated by a forward-thinking JSBA pre-licence award; and, in the case of the UK continental shelf ("UKCS"), licences are awarded on the basis of each of the parties to the licence being jointly and severally liable to the government for the performance of its terms -