Joint Development Schem of Shared Oil and Gas Resources

Joint Administrative Commission (JAC)

For the development of joint oil and gas resources, the establishment of the decision-making body or regulatory body as the joint authority or joint administrative commission (JAC) would be another column that holds and reinforces the complete structure of joint development agreement. JDZ is the place where material and body of joint development agreement and JAC are the heads, soul and spirit within it. The JAC is a body to find practical solution for the States parties and as the best mechanism to resolve any dispute before resorting to a third party. After creation of these two fundamentals by the States parties, it can be claimed that the Agreement is born efficiently. Without a preliminary decision on determination of JDZ and establishment of JAC, it will be very intricate to go through the other ways to overcome each State discretionary power along with special circumstances that rule over each area holding shared petroleum resources.

Such entities are equipped with legal personality, adequate power and reasonable autonomy to undertake all required functions to be practiced in JDZ,177 such as granting exploration and exploitation rights, legal and contractual management and settlement of dispute, preparation of enforcement instrument and applicable law, protection of health, safety and environment, collection and apportionment of revenues and taxes and financial management and all other competences bestowed by the States Parties. Such entities is a temporary organisation under the management of States Parties’ petroleum ministry. Crucial issues challenging closely political economic matters or the States’ national interests would be initially managed by JAC with the final approval or disapproval of the relevant ministry of each States Parties. Regular meeting, communication of their viewpoint and position to any new circumstances arisen during the implementation of the Agreement, being easier and faster solution of issues coming from private parties’ participant in development, are the privileges of establishment of JAC in the context of joint development agreement.

Planning the structure of the Joint Administrative Commission (JAC) by the States parties and its accountabilities is the last difficult step in the process of negotiation and agreement. The members of the JAC are the governmental high-rank authorities from relevant ministries of each States Parties in equal numbers.180 These members of governmental high-rank figures might be changed by previous coordination between States Parties. The delegates from States Parties from co-managers to the committee members under each department are deployed from their own State permanently and till the termination of the joint development agreement. If their deployment and mission are terminated by any reason, each State party shall select and propose the replaced figure one month before termination of the previous figure. The reason for permanent mission and position of all members of JAC is to keep the managers, delegates and experts, who have become experienced and dominant, over all aspects of the Agreement. The new delegate shall be approved by both co-managers and the new expert in each committee shall be approved by the head of the related department.181 Two co-managers from each States parties are appointed from ministry of oil and gas or petroleum. The other members of the JAC are acting under the co-managers are introduced by the Ministry of foreign affairs from both States parties and these delegates are the head of each technical committees. The establishment of group of experts in each aspect of the joint development agreement operating under JAC is to particularly serve the JAC and not States parties separately (see figure). The opinions of the conclusions that the committees come to, would have to pass the approval of the head of each committee and finally the JAC co-managers approve or disapprove them. JAC the technical committee in the framework of six separate committees have the advisory role to the head of each committee listed as follows;
a. Petroleum Development Committee
b. Economic and Financial Committee
b) Legal Committee
c) HSSE Committee

d) Administration, Human Resource and Logistics Committee

Joint Administrative Commission (JAC) as the regulatory body for implementation of the agreement has a priority and preference over all stages of agreement except JDZ determination. This commission is actually the focal point, spirit and soul of the joint development agreement. After the fact that the States Parties which succeeded to establish JDZ and JAC, it can be claimed that the Agreement between the States Parties is efficiently constructed and come to. Organizational Structure of this commission planned in a way that almost all aspects of the project is covered by this transnational commission. Five main committees of the JAC is illustrated in Figure 4.3 and article 5 of the model agreement. Duties and functions of the commission have been enumerated in precision in Article 6 of the Model agreement.
Exploration and exploitation in JDZ are schemed in part three of the model agreement and in the context of, JDZ Plan, Model Contract and Petroleum Codes. The next phase of the agreement after establishment of JAC, is to codify the JDZ Plan by the JAC. Codification of the JDZ Plan is to be commenced after 150 days as written in the model agreement in italic letters to be open for any changes and modifications by the parties which are going to apply this model. The JDZ Plan after codification by Petroleum Development Committee of the JAC which would be attached to the agreement as defined in the model agreement in Annex B.
The implementation of the model agreement from the first stage to the last is illustrated in this chapter with a reasonable degree of precision, these stages are; Determination of the JDZ, establishment of JAC, establishment of committee in JAC, codification of the JDZ plan, codification of petroleum codes, codification of the model contract and unitization, signing the agreement between JAC and concessionaires and commencement of activities within the JDZ.
The clarity of all steps to be taken to finalize the agreement would provide States trustworthy insights to commence cooperation, negotiations and consultations in compliance with what international law recommend for this issue. Despites this model agreement is capable of being improved by future researches, but for the time being, it would be a feasible and practical benchmark in a universal context for the States to adopt most of provisions in it and by slightest changes implement and adopt it in their shared oil and gas field with the other neighbouring States.