UK Government Approaches to Oil and Gas Resources

UK Government Approaches to oil colour and flub ResourcesDiscuss the efforts underinterpreted by the UK governing to ensure that the training of offshore cross-border inunct and gas resources in the UKCS argon non delayed because of differences with neighbouring states such as Nor guidance and the Netherlands.IntroductionWhat is unitization?A primary objective of Governments and planetary embrocate Companies (IOCs) is to maximise the economical recovery of Oil and throttle valve from a common hydrocarbon reservoir. Thus, unitisation is an start which has been developed to ensure that these objectives are met.1 Unitisation in essence base be described as,the process whereby the embrocate and gas reserves of a reservoir which do not sit within an firmament cover by a single license are treated as a single unit for the purposes of development and operation, with the resulting production from the field shared tabu surrounded by the licensees in agreed proportions irresp ective of from where within the unitised area the oil and gas has been produced.2As such, it essentially means that two licensees are not going to argue and instead agree surrounded by them how the reservoir is to be developed, under unitisation and a unit operating agreement (UUOA).3 Thus, unitisation is a response to the common-law concept of rule of capture which originated in the US where the private ownership of Oil and Gas resources resulted in the using of these resources in complete disregard of common oil field practices. This was make by locating such wells and drilling close to the point of accumulation of block, which would draw enough Oil from the adjoining area. However, this encouraged the proprietors of the neighbouring areas to carry out similar behaviour to maximise their own recovery, also known as competitive drilling.4 Accordingly, under the rule of capture, this was permitted as the owner of a portion of land acquires title to the oil and gas which he prod uces from wells cut thereon, though it may be proved that part of such oil or gas migrated from adjoining lands.5To contest this, unitisation was subsequently take by IOCs in other jurisdictions, one of which was the UK.In the UK, where ownership is vested in the state, the crown has the sovereign right to exploit resources in the UKCS, and as such, s.4 of the oil color Act 1998 allows the UK government to make regulations prescribing Model Clauses unless otherwise as he thinks fit to modify to exclude them in whatever particular display case to be incorporated in any such licence. To which, they also hold up the power to impose unitisation between licensees if it is in the interest for the purposes of ensuring maximal recovery of Oil and Gas and to avoid unnecessary competitive drilling.6 The government will then issue a written notice to the licensees to drum a development scheme for developments of the Oil Field as a unit by the licensees the notice must contain descript ion of the area and a deadline for submission to the government.7 However, in practice such a notice, has neer had to be served, as the mere existence of these powers has ensured that the licensees concerned have taken the initiative in this regard.Cross-border Unitisation agreement JOAInternational law in agreementsBilateral treaties UK-Norway UK and Netherlands 2005 Approach This approach can be seen as the beat out practice, as it is very pro-active and as such, there is not a tummy of scope for confusion. It is one of the best examples of a framework agreement masking piece cross-border Oil and Gas development, as it contains specific provisions regarding unitisation. As such, it was use by UK and Norway in 20058 for two cross-border fields, these macrocosm Enoch and Blaine as an alternative way to harmonise regulations and simplify the administration with Oil and Gas cross-boundary projects. The treaty includes an bargain on each Government to unitise in accordance with the footing of the Framework Agreement, unless it has been agreed between them that should not, and as such, to require their licensees to enter into a Licensees Agreement to regulate the exploitation of a transboundary reservoir.9 Its main aim is in securing economic benefit for both States and separate provisions are do for the possibility of such a development by infrastructure set(p) on one side of the boundary e.g. the Boa field more often than not in Norway and Playfair fields, mostly being entirely in UK. So far, the treaty only applies to cross-border boundary fields, but it has been hopeful to extend the procedures to all projects in UK-Norway, as they would have the potential to reduce costs significantly for the Oil and Gas industry.10Third Party resolution approach There are certain situations where States cannot reach such an agreement after negotiations have dragged for years. As such, they may through agreement refer the dispute for third troupe resolution to the International Court of Justice, arbitration panels or as a last resort, group experts due to the sovereign nature.11 Resulting in this approach being used by Nigeria and Sao Tome and Principe to develop cross-border upstream co-operation or vocalise exploitation orders through the unitisation of Ikanga and Zarifo fields. 12 The government of Sao Tome and Principe has claimed archipelagic status under bind 46 of the 1982 UNLOS based on a 200-mile exclusion zone hold by a median line in the North easternmost and North West as being the meridian line between Sao Tome and Principe and Nigeria.The Government based their claim on the Exclusive Economic Zone Act and EEZ which overlapped with Sao Tome and Principes zone, therefore they agreed to resolve their differences by developing a JDZ around the overlap enabling exploration and licensing to proceed. Article 3 of the treaty provides provisions for oil color unitisation and considers it from three perspectives. Firstly, where a geological petroleum structure or petroleum field extends across the dividing line between the zone and the exclusive ocean area of one of the States parties or, between any contract areas within the zone and lastly, between the zone and an exclusive maritime area of a third State. Therefore, under the Nigeria Sao Tome Treaty, the principles that involve joint development are recommended to include joint control by the States parties of the exploration as well as, exploration of resources with the aim of achieving commercial unitisation.1 Andrew Kenyon, Unitisation The Oil And Gas Industrys Solution To One Of Geologys Many Conundrums Lexology (Lexology.com, 2014) accessed 20 March 2017.2 Nicola MacLeod Unitisation in Oil and Gas law of nature at 414 quoting Michael Taylor and Sally Tyne, Taylor And Winsor on Joint Operating Agreements (2nd edn, Longman 1992).3 Nicola Macleod Unitisation in Greg Gordon, John Paterson and Emre Usenmez, Oil And Gas Law Current Practice Emerging Trends (2nd edn, Edinburgh University Press 2010) 13.6.4 John Lowe et al, Cases And Materials On Oil And Gas (4th edn, West group 2002) 786.5 The Rule of Capture and Its Implications as use to Oil and Gas (1935) 12 Tex.1,. Rev. 391 at 393.6 vegetable oil Licensing (Production) (Seaward Areas) Regulations 2008, Model cl. 27(1).7 Petroleum Licensing (Production) (Seaward Areas) Regulations 2008, Model cl. 27(2).8 Nicola Macleod Unitisation in Greg Gordon, John Paterson and Emre Usenmez, Oil And Gas Law Current Practice Emerging Trends (2nd edn, Edinburgh University Press 2010) 439 4419 Ibid, 43910 UK/Norwegian Co-Operation In sexual congress To Cross-Boundary Petroleum Development (Cms-lawnow.com, 2005) accessed 20 March 2017.11 Perry A Oil and Gas deposits at international boundaries New ways for governments and oil and gas companies to turn an increasingly urgent problem (Vol. 5 OGEL 2007) O Igiehon, Present International law on delimitation of the Continental shelf (Sweet Maxwell 200612 Ibid