Abstract
The rule of capture led to the precipitation of the petroleum industry; however, it also led to competitive drilling and waste. The US courts affirmed that the rule necessitated reciprocal action by the affected land owner. Several States have developed rules structuring unitization to limit the exercise of the rule of capture. Using the Association of International Petroleum Negotiators model as a reference, the unitisation and unit operating agreement (UUOA) contains key clauses as unit creation, determination and redetermination. Developing an oil field of fragmented licences to a single unit, segregating each party’s initial share of the unit and allowing future revision of the ownership structure. The UUOA regulated the process of unitization fosters maximization of economic recovery, minimizes waste and reduces competitive drilling, consequently having serious funding and technical considerations as a mandatory requisite.
Original language | English |
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Title of host publication | National Approaches to Hydrocarbon Development |
Subtitle of host publication | Unitization and Unit Operating Agreements |
Publisher | Taylor and Francis |
Pages | 26-39 |
Number of pages | 14 |
ISBN (Electronic) | 9781040272633 |
ISBN (Print) | 9781032753669 |
DOIs | |
Publication status | Published - 1 Jan 2025 |