What Is A Unitization Agreement Oil And Gas

An example is the redefinition of Balmoral Field7, where the underwriters attempted to reduce their shares because of the high cost of capital and the resulting losses to the licensees. Although the case itself focused on the contractual interpretation of the provisions of the unitary agreement concerning the calculation of participation by the designated expert, the case shows that ukCS licensees will use the redefinition provisions in a single agreement to achieve a reduction in economic losses resulting from the reduction of their shares per unit. The retraction provisions in the Cross-Border Unit Scenario need to be examined in detail. The AIPN approach is unlikely in a cross-border entity, as the government revocing the contract is unlikely to accept that the group parties in the other country acquire the interests of the parties to the revoked contract. Jubilee UUOA`s approach does not provide a solution in the context of cross-border unitization, as there is no NOC interested in both groups. The question then arises as to who acquires the rights to the revoked contract in order to allow the continued operation of the unit. This will be a matter of negotiation between the contracting parties to the UUOA, taking into account the applicable laws of the host country. The merger agreement will generally cover (among other things): there are a number of comments on the application of international laws, such as the Un Convention on the Law of the Sea (UNCLOS), reservoirs crossing an international border, and the rights and obligations of host governments arising from international law. [3] Rather, this article focuses on specific issues that may arise when negotiating a UUOA that may require special attention or treatment in a single cross-border context. It is important to recognize that the merger is a joint enterprise agreement between joint ventures that existed before the agreement came into force. These existing joint ventures are either the result of production-sharing contracts or state-granted licences, so the single agreement is based on a number of agreements that form the basis of the single agreement. The superior nature of the single agreement on previous agreements may undermine the interests and obligations of the parties under previous agreements, which may pose difficulties for co-managers in fulfilling their obligations under their previous agreements to the state or to third parties.

The exchange of data between licensing groups can be problematic, as licensing groups strive to preserve the confidentiality of their own data acquired in connection with their license. In practice, negotiating a confidentiality agreement between licensing groups can be a lengthy process, especially when the parties do not agree with the specific purpose of using confidential data and then request the collection of data that does not fall within the scope of the confidentiality agreement protecting the confidentiality of the data already exchanged. [2] International union treaties and association agreements are publicly available. Cross-border UUOas must comply with the terms of the relevant unit 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.