Unitization Agreement Definition

Unitization Agreement Definition

The JOAs that apply to each license remain in effect regardless of the existing unit agreement. The single agreement usually contains a provision that (z.B.): a pre-agreement. B sets out how parties to licences containing a common hydrocarbon reservoir within the licence limit jointly assess the reservoir to present a development plan on the common ground, including a consolidation plan. As a general rule, a unit agreement contains provisions on what happens if the division of units is changed. For example, the unit agreement may provide that any change in the division of units requires the unanimous agreement of the parties, except in the case of the declaration of dissemination or revocation, termination or expiry of licenses. Some changes have been made to the redefine procedures for Schedule E of AIPN-UUOA 2020, but the process remains largely intact. Much more radical changes have been made to the technical redefinition procedures of Schedule F up to AIPN UUOA 2020. The technical redefinition procedures of 2006 have been criticized by technical experts of unitization as being too prescriptive and often inadequate. Each unit tank has unique characteristics and it has often proved impractical to apply the technical redefinition procedures of the 2006 AIPN to the unit concerned. AIPN`s technical procedures for 2020 redefinition take a more principles-based, more diverse and less likely superfluous approach, as industry technologies and standards evolve over the life of UUOA. An oil or gas tank may be deer in adjacent areas of the contract. Unitization is the process by which the straddling reservoir is jointly developed by interested parties in adjacent contract groups. The joint development of an inter-territorial reservoir is generally more economical and efficient than the distinct developments of adjacent contractual groups.

An essential principle of unity is that the interterritorial reservoir is physically developed, as if the boundary between contractual domains did not exist. Similar questions arise in the context of the exit of the UUOA. Article 15 C of the AIPN Model Unit Agreement provides that, if all parties to another group decide to withdraw from the UUOA (and the underlying contract), all contracting parties in the other group or certain parties to the agreement may decide to transfer interest interest to them without compensation. The reason for this provision is to allow the parties to the non-withdrawal group to acquire the rights they need to continue to conduct unit operations under the UUOA in the event of withdrawal of the parties from the other group. Whether this provision can come into force must be the subject of particular attention in the context of a cross-border unit. We doubt that the two host governments will approve in the UUOA withdrawal provisions that could lead contracting parties who do not withdraw to Country X to acquire the rights of contracting parties who retire to country Y without consideration. At each negotiation, any UOAA provision must be carefully considered to ensure that it is viable and achievable in the current circumstances. In the case of a cross-border unit, additional review may be necessary, as the complexity and constraints arising from the fact that the reservoir is subject to the jurisdiction of two governments (whose trade objectives may not always be well coordinated).