What is Oil and Gas Unitisation and Redetermination?

May 29, 2018
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oil and gas unitisation and redeterminationSome aspects of oil and gas unitisation and redetermination services can be cloudy, but essentially, the term is used in application to the migratory nature of pre-discovered oil and gas as it lies underneath the earth’s surface. Of course, should oil or gas, or any resource be discovered on or underneath a country, the law states that country receives a percentage of the price the resource commands.


This, of course, can lead to problems. By the very nature of the earth itself, more often than not, oil and gas pays no attention to where the borders of countries lie, and can very well be anywhere, either in disputed territories or even between two different countries entirely, and both respective Governments can decide to stake a percentage claim at a prospect, which may, in turn, make the prospect less of a prospect and more of a liability to a gas and oil company.


The costs of excavation are not cheap, after all, and an oil and gas company must carefully weigh all of the costs of retrieving the oil or the gas from the prospect. This is compounded by the fact that no two prospects are the same. The earth itself is very much like human beings. While of course, the same basic principles of excavation apply, there is a differing amount of resource beneath the earth, it will not always be at the same depth, and there are a host more factors which make the prospect differ from others.


In the case of retrieving oil and gas, it can be a delicate act in order to balance the safety of the act of retrieval for the workers involved in this, a delicate act to balance the costs of retrieval, and also a delicate act to calculate just how much the oil and gas underneath the ground is actually worth. When you add in the fact that you may have multiple parties legitimately requiring a percentage of the price of the retrieved product, the costs can spiral out of control – especially when it is up to each respective Government how much they wish to take as a cut.


There are Oil and Gas Unitisation and Redetermination companies which are old hands at this balancing act, such as ERC Equipoise. This oil and gas reservoir evaluation company takes a multi-disciplined approach to oil and gas, and allows your company to get a complete service with Unitisation and Redetermination taken into account and so much more.

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