By Andrew Hobbs
AGREEING early on how best to share information between partners in a joint venture is essential to ensuring they continue in a harmonious fashion.
Speaking with Oil & Gas Australia, partners at law firm Piper Alderman Anne Freeman and Ewan Robertson said it was important potential joint venture partners agreed which groups had the rights to what information when joint venture agreements are first made.
“I am urging everyone to think about what information they need, how regularly, and in what format well and truly before they enter into these agreements – so that really clear provisions can be made in the agreements themselves without having to rely on common law or other rights which may not give you what you need,” Ms Freeman said.
While some companies were happy to rely on pro-forma agreements when setting up a joint venture, Ms Freeman said that each joint venture was different, and their founding agreements needed to reflect that.
“Don’t adopt a clause that is just in some other agreement, because that may not give you exactly what you need for that interest in the joint venture,” she added.
“People can get caught up for months and months in disputes about things they need to resolve quickly.
Fellow Piper Alderman partner Ewan Robertson said it was crucial that joint venture parties understood what they wanted the joint venture agreement to achieve, as well as how they expected such an agreement to end.
“If you are a minority party and are letting someone else operate the project for you, not having visibility over management or operations tends to create a bit of suspicion, a bit of mistrust, and that is never good for a joint venture,” Mr Robertson said.
“It is fundamental that you get that information and you set it in stone… so there’s no ambiguity about who does what and who is responsible for what as well.”
Ms Freeman will discuss this further in her address to the Australian Petroleum Production and Exploration Association Conference on Tuesday, 7 June.