Joint ventures and consortiums have become increasingly important as a medium through which international contractors can undertake significant projects. As producers, traders and owners seek to expand their infrastructure assets, there has been an increased need to consider engaging or partnering with a joint venture or consortium contractor in order to tap into a particular expertise, or work with companies active within a particular geographical location. This client alert looks at some of the factors to be considered and the risks to be aware of when working with a joint venture contractor or consortium (JVC).
Why consider engaging a JVC?
Where the project and investment is significant, a JVC relationship tends to be the most widely used vehicle through which contractors can establish a presence in a specific jurisdiction for the purposes of undertaking projects or managing business opportunities.
There are a number of commercial benefits to engaging a JVC:
- Capital intensive: the construction of large energy and infrastructure projects can be too big for a single company to undertake on its own. A JVC allows contractors to pool their capital and assets in order to undertake capital intensive and technically challenging projects without stretching their balance sheet.
Please see full Alert below for further information.
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