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Approaches to Resolving

Boundary Disputes
Facilitating Offshore Oil & Gas Development
Nick Norton Energy Advisor, Climate Change and
Energy Department, FCO London
TUROGE 2014, Ankara
UNCLASSIFIED
Generic Sea Areas
Source : Wikipedia UNCLOS
Approaches to Dispute Resolution
Direct peaceful negotiation of boundaries
o Preferred but compromise can sometimes be difficult
Proceeding under the United Nations Convention on
the Law of the Sea (UNCLOS)
o Some pros and cons of this approach
Unconventional approaches such as confidence
building steps, Joint Development Zones (JDZs) and
revenue sharing
o Avoids some drawbacks but may create new
uncertainties and risks
Direct Negotiation the win / lose dilemma
Disputed Area
Agreed Boundary
50/50 Compromise
A
B
Geological Risk; Country A wins negotiation but reaps no benefit post exploration
Oil Field
UNCLOS Proceedings
International Court of Justice, International Tribunal
for the Law of the Sea and arbitration options
Difficult to predict outcome and hence domestic
political reaction
o Requires goodwill of parties to accept ruling
Some countries have not signed UNCLOS
Slow process, e.g. Peru v. Chile case introduced in
2008 and ruled on by court in January 2014
Peru v. Chile ICJ Case Example
Claims Summary ICJ Ruling
Good relations between parties has facilitated acceptance of ruling
Source: ICJ, United Nations Source: Political Geography Now, www.polgeonow.com
Unconventional Approaches
Co-operation in areas such as environmental
protection, mutual aid and disaster recovery can build
confidence leading to negotiations
Joint Development Zones (JDZs)
Revenue sharing agreement possible ahead of
definition of boundaries
Reducing uncertainty is key for investors
JDZs & Revenue Sharing
Deals with geological risk prior to exploration and win
/ lose dilemma
Parties do not need to have signed UNCLOS or
accepted its principles
Negotiations can proceed at pace determined by
parties and outcomes remain under their control
Potential new issues such as who pays for regulation,
accident liability, accounting and taxation may arise
JDZ Example - Timor Sea Treaty
2002 treaty defines a Joint Petroleum
Development Area (JPDA)
Within JPDA revenues are shared 90%
East Timor and 10% Australia
Agreement has be subject to some
controversy
Other examples include Norway /
Iceland around Jan Mayen island and
Nigeria / Sao Tome and Principe JDZs
In principle revenue sharing can be
agreed independent of final boundaries
Source: Geoscience Australia
Conclusions and Resources
More than one way to settle boundary disputes that
are holding up resource development
No single approach fits all circumstances its good
to talk and sometimes practical co-operation is a start
Acknowledgements and Resources
o Dundee University Centre for Energy, Petroleum and
Mineral Law and Policy, www.dundee.ac.uk
o The Carter Center, Approaches to Solving Territorial
Conflicts, May 2010, www.cartercenter.org
o Many countries have used different approaches so
good offices are available
Thank You
nicholas.norton@fco.gov.uk