In recent years, technologies have been developed which have made it possible to commercially develop vast quantities of petroleum and natural gas resources that were previously known to exist but which could not be commercially developed using conventional techniques. When the co-owners of petroleum and natural gas rights decide to use a joint venture structure, they typically enter in to a joint operating agreement (joa) to govern operations relating to the jointly owned petroleum and natural gas rights. A JOA is the constitution which the tenants in common that co-own the joint land right must adhere to for the duration of their co-ownership. Where it is held by several persons, the concession typically that those persons will be jointly and severally liable to the government for the proper performance of the terms of the concession. This means that government could, if it so wished, look to enforce the terms of the concession against any one the parties which are together the concession holders. The JOA reallocates the position of joint and several liabilities between the parties through provision that the party’s liability inter se will be apportioned according to several predetermined share. The JOA typically relates to a single concession and applies in respect of petroleum operations in the area which is identified within that concession.
