The AMPLA JOA does, however, provide for the implication of certain conditions precedent,5 with the securing of any necessary authorisations and the provision of any agreed collateral support (see 3.3) suggested as conditions precedent.
The relationship between the concession and the JOA has been commented on previously (see Chapter 2). The JOA will generally not subsist if the concession to which the JOA relates is terminated, since the essential purpose of the JOA (which is to regulate the horizontal relationship of the parties in respect of the vertical relationship created by the concession) will have been extinguished.
Because the business of the JOA is to enable the effective performance of the concession the JOA should ideally subsist for as long as the concession is in existence. This will entail the simultaneous signature of the concession and the JOA, such that both documents have the same execution date.
If the duration of the concession is extended because of force majeure under the concession, the duration of the JOA should be extended accordingly.
If there is a point at which the concession is extended or renewed beyond its original term then the duration of the JOA will also be extended so as to track that extension or renewal. Similar principles will apply where there are different concessions for different phases of the joint operations (see 1.8). This assumes that all of the parties to the JOA will be party to the extension or the renewal, but this will not necessarily be so if a party has withdrawn from the concession’s extension or renewal.
In contrast with a conventional commercial contract, the JOA does not contain many of the customarily recognisable termination provisions. There are a number of circumstances that are defined in the JOA which can lead to its termination in relation to an individual party (such as a party’s withdrawal (see 14.7), the forfeiture of a party’s interests (see 18.7)), and loss of the concession against a party (eg for a party’s insolvency or unremedied breach, or in response to an alleged breach by a party of the anti-bribery and corruption principles recited in the concession) will obviate the need for the JOA for that party, but it will be apparent that the correlation between termination events in a JOA and a general commercial contract is quite incomplete.
It will always be an option for the parties to vote to terminate the JOA, which may well be reserved as an item requiring unanimity of voting between the parties (see 8.4), and they might well resolve to do this where the concession has terminated in accordance with its terms, such that the very purpose of the JOA’s existence has been removed.
The JOA will also become redundant where a single party has aggregated all of the other parties’ interests (whether by agreement or through the exercise of the forfeiture or the withdrawal mechanisms), such that it has become the sole party to the concession. In this circumstance there will be no joint operations to be conducted between a group of parties as a joint venture and so no need for a JOA. If there is a subsequent admission of another party to the concession, it will be necessary to reanimate the JOA for that joint venture, but that will result in the creation of a fresh JOA.
Whether the right of a party to terminate a contract at common law in consequence of a repudiatory breach of contract by another party that deprives the innocent party of substantially the whole benefit of the contract6 might apply in respect of the JOA and the relationship that it creates should also be considered.
The English courts have ruled7 that explicit contractual termination clauses will not necessarily operate so as to exclude the implication of the common law termination right, unless the relevant contract was sufficiently clear in evidencing this intention. The relative paucity of express termination clauses in a customary JOA could therefore further emphasise the potential for the application of the common law termination right. The application of such a termination right in respect of the JOA would not result in a corresponding termination of the underlying concession, however, which would lead to an illogical outcome.
The right of withdrawal (considered at 14.7) is effectively a free surrender by a party of all or part of its interests in the JOA, which is exercised by the withdrawing party giving notice of its intention to withdraw from the JOA and the concession to all of the other parties. Careful consideration will be needed of how the right of withdrawal in the JOA is reconciled with any comparable right in the concession. The concession might not always contain an obvious right by which a party, as a concession-holder can elect to surrender its corresponding interests in the concession at any time and for any reason. Thus, a right of withdrawal in the JOA allowing a party to withdraw at its option might not always be matched by an equivalent right in the concession (in which case a withdrawal by a party only of its JOA interest would make little sense).
Where the concession comes to an end in accordance with its terms, then the JOA should ostensibly end too. However, most JOAs do not end completely on termination of the concession, because there will be a number of ongoing items that the parties will need to address through the vehicle of the JOA,8 such as the following.
•Decommissioning – the most obvious ongoing issue that the parties will need to be involved with, notwithstanding the termination of the concession, is the decommissioning of any petroleum production, processing, storage or transportation infrastructure that has been installed and used as joint property in the performance of the joint operations (see 3.4), and in any exclusive operations (see 13.1). The business of decommissioning is addressed in more detail in Chapter 16, but suffice it to say for present purposes that the continuing existence of the JOA could be necessary in order to conclude the decommissioning process9 and any residual liability at law that the parties might have in respect of any of the decommissioned infrastructure.10 However, this will not be an issue if the concession and the JOA are terminated prior to the installation of any such infrastructure. This may be the case, for example, if the exploration and appraisal phase activities do not indicate sufficient quantities of petroleum to justify the introduction of a development plan, any exploration and appraisal wells that have been drilled have been properly plugged and require no further decommissioning activities to be performed, and there has been a withdrawal from the concession and the JOA.
•Final accounting – the JOA should continue to exist for as long as may be necessary to enable the operator to complete a final accounting and reconciliation between the parties in respect of their respective petroleum entitlements, which will include final accounting in respect of joint operations or exclusive operations and addressing the reconciliation of any underlift or overlift balances (see 12.3).11 Once again, this will be of no relevance as an issue if the concession and the JOA are terminated before any petroleum is actually produced.
Even where the JOA does come to an end, there could still be some individual provisions of the JOA that are expressed to continue in force for some