The Creation Account as per the Holy Bible(Genesis chpt.1),makes it manifestly clear that Man was created in God's image with instructions to be fruitful, populate and dominate the world making use of other articles of creation for their own benefit and survival.

As the population of humankind in those days increased, the inevitable scramble for power, riches including land and its resources ensued. It became very difficult for people, in the pursuit of their legitimate desire to acquire power and riches, to live peacefully with their neighbors. In most instances the inability to surmount the challenge of counter-claims for specific resources almost always resulted in debilitating struggles among close relations.

Thus in a bid to maintain peace, we are told in the Bible that Abraham had to divide the Promised Land into two halves for himself and his nephew, Lot. Since then resource acquisition and control has always been the germ of unimaginable dispute and conflicts amongst people of the earth in various ways and at various times.

In our times, the modern history of the New World is replete with examples of various scrambles for power and riches. The North American scramble is typified by the rush for gold and oil bearing lands. In 1859, before the American Civil war, Edwin Drake found oil in Titusville, Western Pennsylvania.

After his initial endeavors to invent a mechanism for drilling oil from the ground was successful, thousands of people flocked to Titusville to explore the possibility of enriching themselves by participating in the emerging oil sector; this was reminiscent of the gold rush in 1849.

Thus, the oil industry grew with the application of this potent invention, and until 1901, Pennsylvania produced half of the world's oil. The booming oil industry undoubtedly affected the user and price of land in America in that period. Many risk takers rushed to acquire lands in areas believed to bear substantial oil resource. The surge in demand helped to push up prices of land. In order, therefore, to maximize revenue from their lands, land owners gave out rather small parcels of land for the purpose of oil and gas activities. These parcels tended to be too small in most cases, for the objective for which they were partitioned and acquired. It created situations where oil and gas resources straddled many land parcels belonging to different lessees.

The resultant effect was that concessionaires rushed to develop their concessions in order to avoid the possibility of oil drifting to the field of another concessionaire; or to drill most of the oil in a common field, motivated by the common law "rule of capture" without due regard to the other concessionaires who also had interest in the common field.

This rush to drill for oil anywhere and anyhow became quite baneful to the oil industry in those days and actually epitomized the destructive potency of greed which is accentuated in the ordinary human being when it becomes a matter of gaining material superiority over the other.

Greed therefore goaded concessionaires to drill many wells nearest to the border with one another in order to acquire all that a field contained to them. This action depleted the pressure in the under ground reservoir, which is required to aid rapid recovery of oil. The lack of pressure made oil recovery more difficult and more expensive in a period where secondary recoveries as well as enhanced recovery methods were not as developed as it is today.

In the course of events however, America discovered a causal link between the operation of the "rule of capture" and the decline in oil recovery. The immediate antidote was to prescribe the standard distance at which oil wells could be developed apart. Later on, in the development of the oil industry in America, legislations were developed in the various states to encourage concessionaires to operate in a more economic manner by making it mandatory for joint operation of oil field wherever the oil straddles different land parcels belonging to different operators.

This arrangement of joint operation of a field has come to be known as unitization and indeed America is the unitization capital. It is the first attempt at resource management to stem the resource curse.

Thus a unitization clause forces or encourages operators or contractors to come together to manage an oil find which straddles respective parcels of land. Unitization, therefore, is a joint operation of a producing reservoir that is located within two or more contract areas in order to maximize recovery.

In the United States unitization is somehow voluntary; however, the Conservation Commission can compel unitization. If this is not achieved the "rule of capture" will prevail in the field even though conservation laws such as prorationing and well spacing will be strictly observed. Application of Unitization outside the USA.

This invidious phenomenon which occurred in America is not expected to repeat itself in Ghana. Because unlike America, land ownership in Ghana resides mostly with the people held in trust by the chiefs and elders of communities .The constitution of Ghana, art 257(6)) also bestows all mineral resources in the raw form to the state. Corollary, individual land owners may not have the motivation to parcel out land for the purpose of oil exploration. On the contrary, land ownership in America was mostly private.

In order, therefore, to maximize revenue from their lands, land owners gave out rather small parcels of land for the purpose of oil and gas activities which necessitated extensive unitization activity to conserve nature and resource. It has turned out, however, that the USA is not the only country to apply and thus benefit from the desirable effects of unitization.

The expansion of the application of unitization has been engendered by the modern economic development paradigm which makes the use of fossil fuels almost indispensable. As a result, therefore, of increasing consumption of oil and gas in many spheres of life, resulting in the expansion of oil and gas exploration in many other regions, unitization has become important in the past three decades not only in America but also in other places.

The following may be assigned as reasons for the rapid growth of unitization out side the USA: In the 1970's due to the oil embargo placed by the OPEC which resulted in a phenomenal hike in oil prices, many more companies were encouraged to join the stampede for exploration for oil in many countries. Having relaxed monopoly over exploration and production by the State in many resource rich countries in the '80'S ;competition in resource development was enhanced providing the impetus for International Oil Companies (IOCs) to venture into countries hitherto considered unattractive to investors.

Exploration blocks have become narrower as oil rich countries tend to seek more revenues through signature bonuses and more rapid development of reservoirs. In a bid to secure large fields for exploration and development, IOCs have ventured into undefined boundary areas contested by rival coastal nations because offshore areas have become promising for the highest potential for large field discoveries. Types of UnitizationUnitization can take place internationally and nationally (between licensees of a host nation). Internationally, unitization may be developed when a reservoir straddles the boundaries of two or more sovereign nations whether the boundaries are delimited or undefined.

The legal framework of such unitization is multilayered and contains: International law - treaties, conventions and international custom, national laws and regulations of the host governments and licensees, and, private contracts among licensees.Nationally, unitization is developed when licensees owning different blocks are joined by a common field within the boundaries of the host country.

Thus, in some jurisdictions unitization is enforced or encouraged when oil reservoir straddles various fields which belong to different licensees within the territorial boundaries of the host country. Unitization for a delimited boundary takes the form of a joint Development Agreement (JDA) where an operator is appointed to develop the resource for the fair distribution to the various nations involved. Where the boundary is undefined however, the area will be declared as a joint Development Zone (JDZ) where the resources will be developed on behalf of the claimants. The revenue accruable on this occasion is lodged in an escrow account until the boundary dispute is resolved.

Purpose of Unitization

Unitization serves three essential objectives:to prevent physical waste;to prevent economic waste; andto protect correlative rights (fair shares).

The purpose of unitization may vary from country to country .For instance, Some countries do not stress on the correlative rights protection as a purpose of unitization because in such countries the state may be the landowner and therefore, will not be affected in the unitization process but rather continue to receive its share of royalties, taxes and other payments regardless of which contract area is produced and developed.

In many jurisdictions, unitization has a strong position in the statutes and is often made mandatory with an accompanying stated objective. In Ghana, the decision to enforce and/or encourage unitization lies with the minister responsible for oil and gas development. PNDCL84 which makes it possible for the minister to exercise the power to cause unitization or not, states in section 4(7) that: "Where a petroleum field extends beyond the boundaries of an area covered by a petroleum agreement or any other authority granted or recognized under this land, the secretary may determine that such petroleum field shall be developed as a single unit and may give appropriate directions to the corporation or the contractor or any other person concerned".

Thus unlike other countries where unitization is often made mandatory without discretionary powers given to anyone and with stated objectives, Ghana's law on unitization is some how vague. Obviously, the intendment of section 4(7) is to cure physical waste as well as economic waste. Section 4(7) as it stands is bereft of any potency and may not ensure that any situation that calls for unitization in Ghana is properly addressed.

I may also like to observe that "field" which may be crucial in the interpretation of section 4(7) is not defined in the Act. A "field" in this sense can mean a geographic area situated over several separate oil and gas reservoirs which are vertically or horizontally separated from each other, or which are overlapping, contiguous, or superimposed on each other. A field may embrace several pools of oil and gas, or a field may mean each physically separate productive stratum that is not in pressure communication with another stratum. (Houston Journal of International Law, 2005).

As a general principle, the unit area should be geographically defined in a manner that best prevents physical and economic waste regardless of how many strata or reservoirs lie within the area. Other host countries, however, have developed much more focused and purposive approach to unitization issues. Angola and China for example, require unitization of separate fields to achieve operating efficiencies that render commercially viable a field that would not be viable unless jointly developed.

Nigeria's 1969 Petroleum regulations require unitization if it is in the national interest for the grantee, Licensee, or lessee to secure the maximum ultimate recovery of petroleum.The 1979 service contract of Nigeria authorizes unitization to secure "as far as is practicable minimum total expenditure and maximum Oil recoveries and economic efficiency... to prevent waste of reservoir energy and consequently prevent the loss of recoverable hydrocarbons".

The U.K. Petroleum regulations state that unitization is authorized if it is in the national interest "to secure the maximum ultimate recovery of petroleum and in order to avoid unnecessary competitive drilling".

Ecuador's 2002 Petroleum Regulations authorize unitization to "improve the efficiency and economy of the operation".

It is quite evident that different oil producing countries have enforced unitization through legislation where appropriate, to avoid the waste of natural resources. Wastage in natural resource is considered as one of the symptoms of resource curse. Therefore, a strict observance of provisions of unitization is necessary to avoid wastage and consequently the occurrence of resource curse.

It is in light of this, therefore, that a unitization and unit operating agreement and plan of development has been concluded recently under the aegis of government for the Jubilee Field in Ghana which covers a lot of interest relating to Kosmos, Tullow, Anadarko and Sabre.

Effects of Unitization

Apart from its economic and environmental importance, unitization touches on the root of relation between the affected contracting parties.

Internationally, unitization helps avoid conflicts between countries claiming portions of an oil and gas field. Unitization will forge the needed understanding for common exploitation of resources that straddle boundaries.

In Ghana, we may have to consider a unitization arrangement with Cote d'Ivoire and probably Togo. Because a close study of the resource map provided by GNPC reveals that Ghana's oil find is very close to the Ivoirian side. In my view therefore it is prudent practice for Ghana to establish whether the field or reservoir is common to both countries before proper development and production commence. This can be a very expensive undertaking however, the result will be beneficial. In the event that the reservoir is common to both countries, unitization arrangements will ensure that Ghana is reimbursed for the exercise.source:GNPCConversely, failure to establish the commonality of a field will lead to suspicion as nationals of the other side may conclude that with exploitation so near their border, the oil resource which genuinely belongs to them may migrate into the exploited field. This can degenerate into protectionist aggression and consequent border clashes. For example, quite recently in 2009, according to JSN Security Watch, Bangladesh, Burma and India have all laid claim to a potentially lucrative oil and gas fields in the Bay of Bengal. This dispute has created tension in the region and at the instance of Bangladesh and Burma, the United Nations and the Commission on the limits of the continental shelf, has been respectively requested to mediate.

Another conflict situation has arisen between Australia and East Timor as a result of lack of proper delimitation of boundaries and respect for any JDZ arrangements. Inter press Service of December 2004, reports that tension between Australia and East Timor is high as a result of struggle for control over the sea border, which dictates how the two countries will divide oil and gas profits.

There are many of such inter boundary conflicts spotted around the globe which can not be recounted here. Some of these conflicts may develop into fully blown wars leading to a resource curse.

In West Africa, however, Nigeria and Sao Tome and Principe have had a unitization arrangement to exploit deep sea oil and gas resources. This arrangement has wiped out any potential conflict.

Unitization will also limit expenditure on the exploitation of the oil resource. In the first place the cooperation approach means that the licensees will combine resources to exploit few wells for the same quantum of oil instead of many companies developing wells scattered around for the same quantum of oil resource. Additionally few wells which are well spaced will maintain the integrity of reservoir conditions, requisite pressure will be achieved thus cutting down on expensive oil recovery programme under reduced reservoir pressure which almost certainly occurs under the operation of the "rule of capture" where licensees, in order to capture more of the petroleum resources, drill more wells than needed in the field.

There is also the possibility that the drilling of many wells as a result of the wanton competition among licensees who have not unitized will further aggravate environmental problems as the operation of petroleum wells have the tendency of polluting the environment. For these reasons Weaver and Asmus have concluded that much economy is achieved in the development of petroleum resources where different licensees and countries are concerned, through unitization (cooperative) rather than competitive mechanism. (Houston Journal of international law 2005).

Applications of unitization is therefore very crucial for the maintenance of the integrity of oil and gas resource as well as for the protection of the environment. Unitization in effect helps to obviate some aspects of resource curse. In the next issue we shall attempt to discuss to a limited extent resource curse and in particular, the role the Ministry of Trade and Industry can adopt to help mitigate the probable scourge of oil resource curse in Ghana.