three ways to share a fieldFor oilfields SA has right of capture...

three ways to share a field

For oilfields SA has right of capture - drill and produce what you can from your own permit (oil in this quality of rock will not travel much more than 600m in the life of the field so effectively there is only a 1.2km overlap)

1. Each drill and produce - effectively ignoring each other
2. Each drill/develop seperately but jointly fund the topside (collection and potential pipeline)
3. Full unitization - map the volume of oil - divide this volume by each JV's share - one company is named operator - each side gets their proportionate share of the revenue

I suspect the talk right now is about #2 and the two JVs have had such a different drilling approach it is unlikely they would map (calculate reserves) in the same way. Unless forced by legislation most companies do not fully unitize since they can seldom agree on the volume split.

A sensible sharing of the topside costs would be to VPE/ITC's advantage since it would lower operating costs. The VPE haters/doubters on the site can relax as any deals would affect the JV as a whole so any VPE benifit would equally benifit ITC.