Joint Study Agreement

The Joint Study and Offer Agreement (JSBA) is a common contractual agreement in the international oil and gas industry, where several parties wish to jointly examine a certain licensing area in order to present a joint licensing/concession offer outside of a registered joint venture. For more information on licences and concessions, see the practical note: understanding of upstream oil agreements – concessions, production sharing contracts and service contracts. With regard to the analysis of the above considerations, it should be noted that the importance of the content and purpose of the JSBA should not be underestimated. As is the case in many situations in the oil and gas industry that require the recall of contractual agreements, there are JSBA models that make a reasonable but incomplete attempt to address key issues and, to some extent, do not address the nuances of the UKCS in the absence of desirable important provisions. To support a successful joint application and the ensuing joint venture within the UKCS, there is no real substitute for a bespoke JSBA and timely preparation. As a precursor to the JOA, JSBA is conceptually a short-term agreement that must work between the issuance of the license and the conclusion of the JOA. However, it is not uncommon for JOA negotiations to take a long time and expose themselves to lengthy litigation, particularly when the parties come from different legal systems and have different experiences in the use of the British Continental Shelf („UKCS“). A longer negotiation of the JOA will result in an extension of the duration of the consortium`s dependence on JSBA as a management vehicle for the joint venture. This may be an alarming proposal for the consortium if the JSBA does not anticipate this eventuality.

Before the start of the JSBA negotiations, the parties should assess what they offer the consortium (and what they expect from others). These discussions always involve the disclosure of economically sensitive information, so the parties must enter into a confidentiality agreement before any in-depth discussion. A particular party may bring much more value to the consortium than the others, if it alone holds certain high-quality information.