Procurement and Contracting in Oil and Gas Companies

776 WordsFeb 4, 20183 Pages
Oil and Gas is a constantly changing business with new areas of exploration on the rise. There have been more companies pushing for development in certain geographic areas. With this contestant evolution of new development contract must be put in place for ownership purpose, which allows companies to develop by being legally protected. Going forward we take a look and how oil and gas companies are awarding agreements through mutual agreements of offer and acceptance, consideration of down payment, capability to perform work and confirmation of legal purposes. Mutual agreements of offer and acceptance can be found in many realms of the Oil and Gas industry in particular agreements are found in the developmental stages of same interest areas. These areas are common place for many oil and gas companies and are sometimes owned by both companies. General there is a contract agreement put in place between two companies specifying the ownership between the two in that particular area. This gives both companies the mutual agreement of offer and acceptance between the two companies. Generally the companies are awarded a specific allocation with certain stipulations. As stated by “AMIs is frequently incorporated in purchases and sales of fractional leasehold interest and farmout agreements, where a third part undertakes drilling obligations for a company wanting to maintain its leasehold interest.” This agreement allows companies to facilitate what they deem appropriate for both
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