Abstract

Unitization occurs when a geological structure containing oil and/or gas reserves, located in more than one tracts or operational areas is unified in order that it could be exploited by an operator, trustee or committee under one production policy and management. Under such situation, then the best exploitation method could be applied in producing the hydrocarbon reserves, as if they were a single property.

By implementing unitization measures, highest possible ultimate recovery could be expected at minimum capital and production operation costs.

During the process of oil production, flow across tract or operational area boundaries could not be avoided. Consequently, if those portions of the structure are not unitized it is possible that one tract or operational area produces more, or less, hydrocarbon than the reserves contained beneath that particular tract or operational area, at the expense, or benefit, of the neighbouring tracts or operational areas; another aim of unitization, therefore, is to guarantee that each tract or operational area be entitled to the amount of hydrocarbon volume produced, proportional to the individual area's hydrocarbon reserves.

In Indonesia, unitization is compulsory and is governed by Law No. 44 Prp/1960 and The Director General of Oil and Natural Gas' Decree No. 402/D.D/Migas/1967.

As stated in the Decree, the other intention of unitization in Indonesia is to speed up the exploration and exploitation activites in order that oil and natural gas can be immediately benefited for the greatest prosperity of the Indonesian people, since frequently in the past there was a tendency among oil companies operating in adjoining operational areas to mutually wait in carrying out the exploration and exploitation works on the structures straddling the boundaries between the adjoining areas.

This paper describes the unitization practices in Indonesia in the last two decades, based on the aforementioned Law and Decree, and Pertamina's experiences in handling such problems.