Exploitation of Offshore Transboundary Oil and Gas Reservoirs; an International Law Perspective

Abstract

Under international law, state's territorial sovereignty ends at its boundaries and any hydrocarbons reservoirs that straddle across would belong to a different state with control over such territory. The United Nations Convention on the Law of the Sea (UNCLOS) provides a legal framework for maritime boundary delimitation. However, it does not entirely solve the equation in regard to exploitation of cross-border hydrocarbons. What happens when the hydrocarbon cross boundaries of different states? It may be difficult to determine the quantity of hydrocarbons due to one state. Szekely defines trans boundary natural resources as those situated in a zone through which a territorial or maritime border runs, separating two sovereign States or a state and a marine zone which is beyond the limits of national jurisdiction. Neighbouring states have access to the same reservoir and any activities by one state would have an impact on the position of the other to exploit the same. This paper analyses different frameworks adopted by states to exploit shared offshore reservoirs. It discusses the challenges posed by exploitation of such deposits and the status of international law, specifically on the obligation to cooperate. Further it focuses on state practice and how different concepts in the cycle of hydrocarbon exploitation have been tackled; from discovery to cessation. This paper shall use examples of Norway-UK, USA-Mexico, Australia-Timor-Leste, and Nigeria Sao Tome, Principe arrangements.