A clause in a joint operating agreement providing that no operations may be conducted except as Joint Operations or Exclusive Operations does not prohibit a party from undertaking, at its own expense and without using Joint Property, preparatory development work such as FEED studies, evaluation of long lead items, and procurement contracts, where those activities do not prejudice or interfere with the functions of the Operating Committee. For the purposes of operator removal clauses requiring breach 'in its capacity as Operator', the capacity in which a breach is committed is determined by reference to the objective facts and the contractual provisions breached, not the subjective intention of the party. A breach is not 'material' for removal purposes where the non-breaching party suffered no demonstrated prejudice and the only input denied was the right to add names to a tender list without evidence that contractors were unsuitable or prices uncompetitive.
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