Burley (P2 December 2009)

This topic has 1 reply, 2 voices, and was last updated 7 years ago by P2-D2.

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November 6, 2018 at 7:40 am #483975
wyyy
Member
- Topics: 24
- Replies: 22
Hi,
The question :
Burley owns a 10% interest in a pipeline, which is used to transport the oil from the offshore oil rig to a refinery on the land. Burley has joint control over pipeline and has to pay its share of the maintenance costs. Burley has the right to use 10% of the capacity of the pipeline.
The suggested answer showed that pipeline is a jointly controlled asset and it is not structured through a separate vehicle. Therefore, the arrangement is a joint operation.
May I know how can I figure out pipeline is not a separate vehicle?
Thank you.
November 8, 2018 at 8:05 pm #484232
P2-D2
Keymaster
- Topics: 4
- Replies: 7232
Hi,
When it refers to a separate vehicle, it is referring to a separate company being set up and here there is no separate company that is owned by the two parties, they are merely sharing the use of an asset. It is therefore a joint operation.
Thanks
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