The flight of the operators: Resignation provisions under joint operating agreements
As the turbulence in oil prices continues full pace, participants in the upstream oil industry are increasingly having to reassess the commercial viability of their assets. That reassessment is particularly acute for operators who may even decide to step back from their operatorships. Resignation under a joint operating agreement is, however, a daunting prospect for all concerned - the pitfalls are many and the chances of finding a replacement not always apparent.
How can the right of resignation be properly exercised? What happens where there is no successor operator? When is the outgoing operator released from its obligations?
This alert takes a brief look at some of the most thorny issues for both operators and non-operators within, notably, the framework of the 2012 AIPN JOA, from both an English law and French law perspective.