“UUOA” & “PUA” Agreements in Common Fields

There is no upstream document in the oil and gas industry that does not address the necessity of developing joint fields. It is evident that the reason for this entirely logical emphasis lies in the competition we face with neighboring countries in exploiting these resources.Unitization & Unit Operating Agreement (UUOA) contracts are a type of upstream oil and gas agreements. “Unitization and unit operation agreement” is a contractual framework whereby, in areas where development rights have been granted to multiple parties, and the licensed zones belong to a single reservoir or oil field, the parties decide to jointly develop the field and each benefit proportionally from the future revenues of the field.The AIEN institute (one of the prominent institutions in designing contractual models) has proposed a sample UUOA model.The future parties to a UUOA may also, before entering into the details of such an agreement, mutually establish a Pre-Unit Agreement (PUA), which may or may not lead to a UUOA.Therefore, one of the strategies for developing joint fields can be diversifying the contractual portfolio.Source:

Peter Roberts, “Petroleum Contracts: English Law and Practice”, Oxford University, 2016, p.109