Unitization And Unit Operating Agreement

In this article, we look at some of the issues that are generally addressed in a Unit and Operating Agreement (UUOA) that may require special attention in the context of cross-border unitization. The purpose of the unit agreement is to create the single unit in the two or more licensing or contract areas that contain the reservoir, by combining the respective interests of the licensees and providing the development, operation and closure of the unit. The JOAs that apply to each license remain in effect regardless of the existing unit agreement. The unit agreement usually contains a provision that is important (e.g.B.): This is important, as a JOA remains relevant for the conduct of joint operations in a licensing or contract area outside the unit area. In addition, the JOA remains the relevant agreement on the sale and transfer of the underlying license shares. The unity agreement is often referred to as the “super-JOA” because the shape and structure of a single agreement follows the shape and structure of an JOA. For example, a model unit agreement will include provisions that require cross-border UUOas to meet the terms of the unity contract (JDA) between host governments. Many bilateral unity agreements (and JDAs) do not address redefinition at all, and those that do, such as the framework agreement between the Venezuelan government and Trinidad and Tobago [8], tend to adopt very high principles in terms of new provisions. This is due to the fact that most uniting contracts (and DJD) apply to all cross-border tanks and are not specific to a specific tank. It would be unwise for a single contract (JDA) to apply to all cross-border reservoirs in order to define how the new provisions should be implemented, given that the appropriate redefinition procedures are specific to one area. Various unit contracts and JdA provide for a redefinition framework that must be taken into account in each UUOA, including unit contracts (i) between the governments of Norway and the United Kingdom with respect to the Frigg field [9] and the stratfjord field [10] and the governments of the Netherlands and the United Kingdom with respect to the Markham field; [11] and (ii) the JDA between the governments of East Timor and Australia with respect to the Greater Sunrise Unit.

[12] Given that these contracts are field-specific and governments had some knowledge of the characteristics of these tanks at the time of the conclusion of their contract (or JDA) in the case of the Larger Sunrise unit, it was possible to impose strict redefineable rules in the contract (or JDA) in question.