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Anatomy of Offshore Platform Sharing Agreements, Platform Handling Agreements and Production Handling Agreements

Jay G. Martin, Oil & Gas Development on the Outer Continental Shelf (1998)

Due to technological advances, new exploration and development activity in the Gulf of Mexico Outer Continental Shelf (“OCS”) has in recent years been the mainstay of oil and gas reserve additions in the United States. An increasing number of operators are advancing new exploration and production projects and building new facilities throughout the Gulf of Mexico OCS1 as a result of being able to drill and complete wells in steadily deeper water, the promise of higher prices for gas and oil in the future, larger domestic drilling budgets, the need to drill a growing number of primary leases before expiration, and declining production elsewhere in the United States.

The keys to success for the Gulf Coast OCS petroleum industry over the next decade will be: (1) the ability to add production and reserves at low unit cost; (2) constant attention to cost control; (3) operating profitability on the basis of conservative price forecasts; (4) maintenance of leading edge technology; and (5) maintenance of an aggressive and skilled exploration organization during a time of depressed energy prices. In order to accomplish these objectives, petroleum companies are employing new operating practices and entering new types of relationships including partnering alliances.

A partnering alliance is a cooperative arrangement between two or more companies where: (1) a common strate