As a general rule, the host government prefers to transfer its portfolio of assets/blocks to different companies and contracts. This involves awarding different licensing areas and licenses to different licensees. The licensees then enter into a separate agreement (i.e., a joint enterprise agreement) to determine the relationship between them with respect to how they wish to jointly conduct exploration, development and production activities for this specific licence. However, as is often the case, nature does not fit as easily into the rules made by man. In the oil industry, this can be illustrated by oil and gas deposits that do not always correspond to pre-defined ownership limits, commonly referred to as “contractual zones.” This is because hydrocarbon reserves can often have two or more licences that would not otherwise be linked to each other. The agreement between the parties of the groups that hold the adjacent contracts defines the conditions under which the interterritorial reservoir is developed jointly. This generally results in a unit in which all resources and facilities are jointly held and each group`s share of production and costs is based on the agreed share in the unit, regardless of the location of the facilities. In certain circumstances, the parties enter into two separate agreements concerning: (i) the formation of the unit and the distribution of unit costs and production between the contractual groups (a “unit agreement”); and (ii) the operation of the unit tank (“unit operating agreement”). However, it is more common for trade and operational provisions to be grouped into a single agreement – a single agreement and a single operating agreement – of the UUOA. The UUOA creates a non-community joint venture between the groups and their participants. UUOAs are private contracts between interest owners and, although they are generally subject to the approval of the host government, they are not publicly available. One of the most important nuances of the pre-unit agreement that the parties must be aware of is that the interests of the parties contained in the merger agreement will not necessarily be reflected in the subsequent unity agreement. This is because the parties will learn more about the reservoir through geological studies and reservoir engineering that will be conducted following the conclusion of the single agreement, and then as soon as one or more new provisions are implemented (see below).
This is an important principle because it allows for a more precise distribution of costs and production between the parties to the single agreement. However, as with all questions relating to technical data and interpretations, which are subjective, there will still be uncertainty as to the results of a redefinition. In the market, the philosophies underlying the conclusion of a single agreement can be: be expressed as (i) as a desire to jointly develop a redefined area of units and to participate together in the goods and misfortunes of this area, as if the participants were all partners in a single license, or (ii) the desire to “do to Caesar what Caesar is” and to ensure that the share of each hydrocarbon group in hydrocarbons represents the hydrocarbons that are originally present in their own field of licensing. The role of the British government in the unity process can be summed up as follows: when a licensee objects to the development system, that taker has 28 days from the date of written notification of the Secretary of the Development Scheme of the Secretary of State to refer the matter to arbitration in accordance with Type 43. The JOAs that apply to each license remain in effect regardless of the existing unit agreement. The unit agreement usually contains a provision that (z.B.): a UUOA is usually a complex agreement that requires significant contributions from legal, commercial and technical specialists, including tank engineers, who are familiar with the characteristics of the container.