Oil and Gas Unitization: Specific Considerations for Cross-Border Unitization -

Setting the Scene -

There are more than twenty bilateral unitization Treaties and Joint Development Agreements (JDAs) in place today between governments that share an international (usually maritime) boundary. These unitization Treaties and JDAs create the framework for the development of an oil or gas reservoir that straddles the boundary of the two countries that are party to the Treaty (or JDA) – i.e. the cross-border unitization. A number of unitization agreements have been entered into pursuant to these Treaties and JDAs, including agreements for the Frigg field and the Stratjford field which straddle the boundary between Norway and the UK in the North Sea, and the Bayu-Undan field located within the Joint Petroleum Development Area established by the Governments of Australia and Indonesia in the Timor Sea.

In this article we consider some of the issues that are typically addressed in a unitization and unit operating agreement (UUOA) that may require particular attention in the context of a cross-border unitization.