Settlement of Offshore Boundary Disputes

International decolonisation and the end of the cold war at the close of the twentieth century resulted in the emergence of a large number of new nation-states. These developments resulted in a dramatic change to existing international boundaries. This process of redefining territorial and maritime boundaries has implicated the energy industry and, in particular, ongoing exploration and development in the oil and gas sectors. This has often been driven by developments in extraction and transportation technology. New territorial limits have had to be agreed and, where applicable, boundaries delimited. It has proved no easy task, especially when there are clear indications that the disputed area is resource rich such as in the Caspian Sea. This article will look at the ways in which these problems have been addressed, and in particular at the growing popularity of Joint Development Agreements as a means of states cooperating to exploit disputed maritime areas.

The starting point on all these issues is the United Nations Convention on the Law of the Sea 1982 ("UNCLOS") (www.UN.org/depts/los).

UNCLOS

UNCLOS came into force on 16 November 1994. At present it has 138 state parties, (including the UK and most western states except for the US). UNCLOS sets out the international legal regime on which each coastal state may determine its maritime claim. Each state has a right to establish a territorial sea of 12 nautical miles and an exclusive economic zone that "shall not extend beyond 200 nautical miles from the baselines " (Article 57).

UNCLOS also provides all coastal states with a legal claim or "sovereign rights" over the continental shelf (under Part VI). UNCLOS confers sovereign rights on the coastal state "for the purpose of exploring and exploiting, conserving and managing the natural resources." (Article 56(1)(a)) No exploration activities can take place in a coastal state's continental shelf without the consent of that state. Problems can arise where adjoining or adjacent states overlap. There is an underlying presumption that such overlapping legal claims are both legitimate where there is less that 400 nautical miles between the states involved. Article 15 provides that ordinarily the dividing line between two states territorial sea will be a line equidistant from the baseline of the two contending states. The UNCLOS envisages that the "delimitation of the continental shelf between States with opposite or adjacent coasts shall be effected by agreement on the basis of international lawin order to achieve an equitable solution." (Article 83). In the Qatar/Bahrain case no agreement could be reached between the states on the disputed maritime areas. The International Court of Justice (ICJ) ultimately decided the matter and drew a single boundary dividing the various maritime zones of the State of Qatar and the State of Bahrain specifying a series of geodesic lines along identified co-ordinates. (www.icj-cij.org)

The states, if they fail to reach a negotiated agreement, must resort to the dispute settlement provisions of UNCLOS. It is noteworthy that the UNCLOS sets out a mechanism for mandatory dispute settlement. Part XV sets out the dispute settlement provisions. The parties can choose from a number of options to have their dispute on the interpretation and application of UNCLOS decided. These include taking a claim to the International Tribunal for the Law of the Sea (ITLOS), the ICJ or an arbitral tribunal constituted in accordance with Annex VII. To date, disputes relating to delimitation matters have either been brought before the ICJ in The Hague or dealt with by arbitration as in the Eritrea/Yemen case (www.pca-cpa.org). ITLOS has not yet had to determine any delimitation cases nor have there been any final decisions made by an...