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VOL. 7, ISSUE 5 (2021)
Understanding joint venture agreements in the Nigerian oil industry
Authors
Aderonke Abimbola Ojo
Abstract
Joint Ventures the world over is a contract-hatching partnership platform for heralding the growth and development of oil exploration. Of a fact, Joint Venture contracts have proven to be the most advantageous for the prompt and efficient operation in the Nigerian oil and gas industry as about 71.43 percent optimality of the Joint Ventures are accorded both government and oil companies with the participatory interest in the oil and gas exploration, development and production. This paper attempts to expose peculiar insights into the understanding of Joint Venture Agreements. It identified the reasons for entering into a joint venture agreement, analysed the kinds of Joint Venture Agreements enterable by Operators and highlighted the basic factors to consider before entering into a functional Joint Venture Agreement. This paper concludes that by agreeing that in the effort to distribute risk, maximise the use of investment capital and divide the heavy costs of construction and operation, most developing countries seeking capital often resort to joint venture arrangements as one of the most flexible arrangements available and that there is a blend of mandatory economic and political forces that bring this form of operation into ever increasing use. Whilst the considerable amount of sovereignty is restored to the government’s fiscal powers, the significance of such an extension of sovereignty is that once accepted by the company, it further reduces the areas where conflict can be expected, irrespective of the unacceptably high rate of failure of the Joint venture. Similarly, successful joint ventures are considered as fostering the achievement of the major goals by each partner with clear goals within the stipulation and understanding of the objectives, interest and contributions of the joint venture partners.
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Pages:122-127
How to cite this article:
Aderonke Abimbola Ojo "Understanding joint venture agreements in the Nigerian oil industry ". International Journal of Law, Vol 7, Issue 5, 2021, Pages 122-127
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