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January 1987

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Operator Cost Recovery

The PJVA Committee on Operation Cost Recovery was made up of ten companies. The committee first set out to establish current industry practice by collecting factual data. This was done on three fronts. First the broadest possible cross section of the industry was polled through a questionnaire. Secondly committee members provided an analysis of their own in-house corporate overhead recover and thirdly specific processing plant and unit operations were analyzed by committee members.

The committee reached consensus on the findings and recommendations. The Committee addressed itself to establishing a framework for operation cost recovery that will be fair and equitable to all industry participants. The recommendations are not intended as the sole formula for all agreements. Each agreement is unique and special site specific requirements may dictate alternative practice which would be structured as a normal part of the negotiating process.