Section 80: Unitisation.

1 A licensee or lessee shall promptly notify the Commission of any petroleum reservoir which extends beyond the boundaries of its licence or lease area.

2 The Commission may, for the purpose of ensuring optimum recovery of petroleum from a petroleum reservoir, require all petroleum operations relating to commercial discovery to be carried out by a licensee or lessee on the basis of a unitised development of the applicable commercial discovery, where—
a the petroleum reservoir covered by an area to which a licence or lease relates extends beyond the boundaries of such area into an area to which another licence or lease relates and in respect of which a different person is the licensee or lessee; and
b at least one licensee or lessee has made a declaration of a commercial discovery.

3 The Commission may, upon receipt of a notification under subsection (1) direct the applicable licensee or lessee to enter into a unit agreement to develop the petroleum reservoir as a unit, within a period of time to be determined by the Commission, which shall not be less than two years.

4 The unit agreement referred to in subsection (3) shall be approved by the Commission and shall—
a be based on terms agreed by the parties and in a form that conforms with good international petroleum industry practices; and
b contain terms and conditions as may be required by a regulation issued by the Commission under subsection (9).

5 A unit agreement shall, in addition to the requirements of subsections (3) and (4)—
a be based on reliable technical, operational and economic considerations;
b set out the proposed operator of the applicable unit; and
c set out technical information regarding the petroleum reservoir subject to unitisation, including structure mapping, net pay and such other engineering and geophysical information as may be required by a regulation issued by the Commission under subsection (9).

6 Where the applicable licensees or lessees are unable to reach agreement within the time limit imposed by the Commission under subsection (3), the Commission may, in compliance with subsections (4) and (5), require the licensees or lessees to jointly appoint a consultant to develop terms and conditions that are fair and equitable to licensees or lessees and Government and which shall be binding on the licensees or lessees after approval by the Commission and where the applicable licensees or lessees fail to appoint a consultant within two months after the requirement by the Commission, the Commission shall appoint the respective consultant and the remuneration of the Consultant shall be paid by the licensees or lessees.

7 Where a petroleum reservoir extends beyond the boundaries of the licence or lease into an adjacent area which is not covered by a licence or lease, the Commission may—
a extend the boundaries of the licence or lease to include the entire petroleum reservoir within such licence or lease, provided that the licensee or lessee submits to the Commission a field development plan that includes the additional adjacent area acceptable to the Commission; or
b conduct a bid round for the adjacent area in accordance with the licensing round guidelines and the provisions of this Act.

8 Where a petroleum reservoir unitised under this section is able to continue in production after the expiration of one or more licences or leases relating to the petroleum reservoir, the Commission may grant an extension of the licences and leases in the unitised field.

9 The Commission may from time to time issue regulations in relation to unitisation.