Unitisation and Unit Operating Agreements

Eduardo G. Pereira, Marianthi Pappa, Damilola S. Olawuyi

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

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 languageEnglish
Title of host publicationNational Approaches to Hydrocarbon Development
Subtitle of host publicationUnitization and Unit Operating Agreements
PublisherTaylor and Francis
Pages26-39
Number of pages14
ISBN (Electronic)9781040272633
ISBN (Print)9781032753669
DOIs
Publication statusPublished - 1 Jan 2025

Fingerprint

Dive into the research topics of 'Unitisation and Unit Operating Agreements'. Together they form a unique fingerprint.

Cite this