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Are Today's International Model Operating Agreements Looking Far Enough into Tomorrow? --Operator Liability For Major Spill or Blowout Incidents

Robert P. Thibault, International Mining and Oil & Gas Law, Development, and Investment (2011)

• Shared ownership of or participation in international oil and gas concessions is ubiquitous, giving rise to a universal use of operating agreements among the participants and with the host government.

• Depending on the locale and choice by the participants, there is a number of form operating agreements made available for and used in the industry often by industry organizations, including the Association for International Petroleum Negotiators (“A.I.P.N.”) and Oil and Gas UK. There are common example agreements accepted by, and thus a quasi-form for, various governmental bodies. There are also operating agreements uniquely drafted by the parties for individual projects.

• All operating agreements provide, as a central purpose, the appointment of a single entity, invariably from among the participants, to serve as operator of the project with specified duties and resources and treatment of liabilities arising from serving as operator.

• While we can presume that everyone of us who, as party or attorney for a party to an operating agreement, has carefully considered the fullest scope of the provisions governing the operator and its responsibilities under these operating agreements, the recent experience of the major blowout event in the U.S. Gulf of Mexico in April, 2010 may give us reason to re-visit these operator provisions in light of the extreme