Human

Maritime boundary disputes

 By Nicholas Newman

Of the world’s 512 potential maritime boundaries, fewer than half have been agreed, creating uncertainty and room for disputes for the remainder. In addition, Maritime boundary disputes regularly occur over commercial, economic and security interests and are a common but underrated investment risk in the energy sector. Agreeing and fixing maritime boundaries involves the use of geology, oceanography, technology, money, law, history, politics and diplomacy…

The United Nations Convention on the Law of the Sea (UNCLOS), which came into force in 1994, and has been ratified by over 165 countries, gives States the right to claim natural resource rights to the water and ocean floor up to 200 nautical miles from their coastline, known as exclusive economic zones (EEZ). Such rights are potentially highly valuable and are particularly important for energy, mining, fishing and telecommunications industries. However, in some areas, for example the South China Seas, the eastern Mediterranean and the Arctic Archipelago, multiple overlapping claims exist.

The eastern Mediterranean is a case in point where marine territorial disputes between Israel and Lebanon on the one hand, and Turkey with Cyprus and Greece on the other, are ongoing. Another, is the future of the Arctic Archipelago where Russia, the United States, Canada, Denmark and Norway have all been trying to assert jurisdiction over parts of the Arctic as the retreat of the Polar ice creates opportunities for exploration in a region believed to hold a quarter of the world’s undiscovered oil and gas valued at some $30 trillion. This feature looks at some of these disputes, how they are being resolved, the challenges faced and what the law says about such issues.

Arctic Archipelago

International rivalry over the Arctic, a region believed to hold up to a quarter of the world’s undisclosed oil and gas and mineral riches, underlies Russia’s revised bid for greater territorial rights. In this new bid, Russia claims a 1.2 million square kilometers of the Arctic Sea Shelf extending more than 350 nautical miles from the shore. Upgraded military installations and a recent visit by Vladimir Putin serve to reinforce the Russian presence and its national defense and environmental protection credentials. The size of the prize in oil, gas and minerals plus the geographical proximity of eight nations will require complex and lengthy negotiations. While these matters are being resolved, thinning ice of the polar cap offers new commercial opportunities for Russia’s Yamal LNG exports with a new class of icebreaking LNG tankers to Asia in the summer months at least.

Figure 1

South China Sea

Setting the boundaries of a 200-mile exclusive economic zone is not an easy task in the South China Seas due to competing territorial, security and economic claims of several nations including the Philippines, Vietnam and Malaysia. As seen in Figure 2, all the countries bordering the South China Seas have overlapping competing claims to the potentially valuable waters and seabed. The main areas of contention are the waters surrounding the Scarborough Shoal and the barely above-sea-level Spratly and Parcel islands. For all parties economics dominate, since the disputed area holds an estimated 11 billion barrels of oil and 190 trillion cubic feet of natural gas and it is also a pre-eminent trade route, with over fifty percent of global commercial shipping passing through the area, worth some $5 trillion in trade. To strengthen its territorial claims China has built on some subsea mounts to create artificial islands.

Figure 2

Nevertheless, the arbitration Tribunal in The Hague recently ruled that China had violated the Philippines’ sovereign rights as some of the waters claimed by China are ‘within the EEZ of the Philippines’. The Tribunal concluded, that rocky outcrops claimed by China could not be used as a basis of territorial claims, and ruled that there were no legal grounds for recognising China’s historic maritime rights based on claims that the Han dynasty had sent ships to the region.

Eastern Mediterranean

The discovery of natural gas in the Eastern Mediterranean has led the region’s governments to obtain exact delineations of their exclusive maritime and economic boundaries. The United States Geological Survey estimates that the region could hold technically recoverable resources at 122 tcf of gas and 1.7 billion barrels of oil. However, there was upside potential for as much as 227 tcf of gas and 3.8 billion barrels of oil. Although energy industry insiders think the actual volume may be lower, nevertheless, geopolitical analyst, F. William Engdahl comments, “Such finds are significant.” The prospect of significant energy wealth has led to two major boundary disputes. One, between Turkey and its neighbours Cyprus and Greece, and the second, between Israel and Lebanon.

Cyprus, Turkey and Greece

News that Cyprus could have an estimated 4 trillion cubic feet of natural gas valued at around $50 billion in its own EEZ zone adjacent to the boundary with Israel and Egypt has attracted Turkish interest. The recently discovered Aphrodite gas field, located in Cyprus’s maritime EEZ, close to Israel Leviathan, discovered in 2010, is estimated to hold 18.9 trillion cubic feet (535 billion cubic meters) of natural gas, along with 34.1 million barrels of condensate. See Figure 3.

Figure 3

Under UNCLOS conventions, the Greek southern part of Cyprus, known as the Republic of Cyprus, has the legal powers to create its own exclusive economic zone, mainly in the waters to the west, south and east of the island. Turkey, which is not a signatory to UNCLOS, is contesting the Cypriot EEZ. Turkey does not recognise the Greek Cyprus’s right to a continental shelf nor its claim to an EEZ around the whole island and consequently dismisses previous demarcation agreements reached between Cyprus and Egypt and Israel. As a result, it claims sovereign rights to both the north and south of Cyprus as shown pictorially in Figure 4.

Figure 4

The Cyprus Mail reports that Turkey is not supportive of Cypriot drilling in the Aphrodite field, but the US, EU, Russia and the United Nations support drilling. It is widely predicted that re- unification of the island will resolve the boundary dispute and allow Cyprus to construct an undersea pipeline linking its gas network with offshore subsea gas fields being developed in neighbouring Egyptian and Israeli waters.

The Aegean

According to the US Geological Survey, there could be some 4 billion barrels in the northern Aegean Sea an amount sufficient to spark a boundary dispute between Greece and Turkey’s proposed EEZs. Complicating the delineation of their respective EEZs is the presence of multiple Greek- administered islands lying close to the Turkish mainland. Turkey claims that the seabed of the Aegean forms a natural extension of the Turkish mainland and that therefore it is entitled to an EEZ extending into the middle of the Aegean (excluding the territorial waters around the Greek islands in its eastern half, which would remain as Greek enclaves.) Greece, on the other hand, claims that all the islands must be taken into account on an equal basis. This would mean that Greece would gain the economic rights to almost the whole of the Aegean under UNCLOS rules. See Figure 5.

Figure 5

Israel

Once again, competition for natural gas resources and overlapping claims over an 854 square kilometre area as in Figure 6 lie at the heart of the maritime boundary dispute between Israel and Lebanon. Experts commenting on this dispute say that the lack of an official land border makes it more difficult to decide a precise maritime one. Moreover, “Israel has not signed the UN Law of the Sea, which means that Lebanon cannot force Israel to resolve maritime disputes through an international tribunal”, says Georges Pierre Sassine, GE Energy’s Global Strategy team. This uncertainty and lack of a foreseeable resolution are a major disincentive for foreign energy companies to explore for oil and gas in Lebanese waters and therefore prohibit Lebanon from emulating Israel’s good fortune in finding gas amounting to 199 bcm in its gas fields.

Figure 6

The law

UNCLOS offers countries the opportunity to settle maritime boundaries without recourse to the Courts. Two approaches are available. The first is for countries to agree to drawing an equidistant line between themselves such as is the case between England and France at the 20-mile wide Straits of Dover. The second approach is an equidistant line that is adjusted to achieve a fair result. For example, the 2010 agreement of the Arctic Ocean maritime boundary between Norway and Russia, where significant concessions were made on both sides so that both could explore for oil and gas.

However, in some cases recourse to the courts is inevitable in which case the disproportionality test is applied. Where the respective country’s shares of the relevant area are markedly disproportionate to their coastlines, as was the case of the Gulf of Maine dispute between Canada and the US, where the issue was resolved by the World Court.
As the examples above illustrate, simply drawing a line on map is not equitable and therefore other considerations have to be taken into account, most notably, political, economic and environmental factors. Potential energy investors in offshore resources are advised to seek specialist legal advice and assure themselves over who has sovereignty over a potential oil or gas field before making any commitments.

SEE MORE: The mediterranean surprise by Moisés Naim

about the author
Nicholas Newman
Freelance energy journalist and copywriter who regularly writes for AFRELEC, Economist, Energy World, EER, Petroleum Review, PGJ, E&P, Oil Review Africa, Oil Review Middle East. Shale Gas Guide. https://nicholasnewman.contently.com/