Unitization in the Oil and Gas Industry
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Unitization in the Oil and Gas Industry Course
Introduction:
Hydrocarbon tends to tread two or more license concessions areas or even international boundaries. Unitisation is a mechanism whereby reservoirs for petroleum and or gas are developed as a unit by a single operator (the Unit Operator) and use common production facilities under an agreement called a Unitisation Agreement. The objective is to obtain the maximum recovery of hydrocarbon by the parties. Unitisation requires rather complete and real knowledge of the field which justifies there being a Unitisation Agreement which is among interested parties. The Unitization Agreement seeks to provide for the participating interests equitably to avoid transit impact on the participating interests and help to avoid some legal traps. Unitization should be implemented early in the life of a field, before development as the owners seek to establish leverage in negotiating a larger share of the field or drain the field.
Course Objectives:
At the end of this training course, you will learn:
- International oil and gas legal and technical principles used in unit operations
- The key legal and commercial issues that arise in a unitization
- Issues to consider when preparing a UUOA for a specific project
- Specific issues to be considered in a cross‐border unitization
- Provisions aimed at limiting the liability of adjoining operators/contractors
Who Should Attend?
This course is suitable for a wide range of professionals but will greatly benefit:
- Contract/Agreement Managers/Specialists
- Commercial Manager
- Legal Counsels/Advisors
- Commercial Lawyers
- Negotiators
- Project Owners
- Project Directors/Managers
- Project Engineers/Planning Engineers
- Operation Managers
- Contract/Agreement Managers/Specialists
- Financial Controllers/Finance Managers
- Business Development Managers
Course Outlines:
What is unitization?
- The development of the concept of unitization
- Different approaches to unitization
- Terminology in Unitization Agreements
- Pooling and Unitization, Voluntary & Mandatory
- Order of Unit Operation of Pool
- Multiple Leases
Documenting unitization
- Where the unitization agreement fits within the upstream contractual regime
- The need for a pre-unitization agreement
- Important provisions of a pre-unitization agreement
- The essential elements of a unitization agreement
- The structure of a unitization agreement
Key Concept Affecting Unitization Agreements
- Determination of the initial track participation/unit interest
- Change in the unit area
- Units and Unit Operating Agreements
- Redetermination
- How does the redetermination process work in practice?
- The redetermination process – the role of the expert
UUOA - Unit Operating Agreements & Unitization
- Connecting the dots between Unitization and UOA?
- Unitization in practice
- Government approval
- Important Pits falls to avoid in UOAs
Key issues in UUOAs
- A One-Size Fits All UUOA?
- Tract participation,
- Determination and redetermination provisions,
- Role of the expert
- Unit Operating Committee Voting Thresholds
- Default of Parties
- Specific Unitization Issues for LNG Export Projects
Transboundary Unitization and Boundary Disputes
- Examples, include the Netherlands, UK and Norway, Nigeria, Saudi Arabia, and Kuwait
- Transboundary developments
- Resolving Transboundary Disputes
- Case Studies on Transboundary Disputes
