9. Conclusions
The pressure to discover and exploit hydrocarbon resources is intensifying with an
increasingly energy-hungry world. This will lead to a greater likelihood of resources
being exploited in areas where boundaries have yet to be delimited and/or are
disputed. The mix of hydrocarbon resources coupled with an undelimited or
disputed boundary offers the potential for toxic disputes in the future.
Where there is a dispute, it may not be possible to predict the outcome and
timing for resolving that dispute, since a single rule or method may not be
applicable. Although the equidistance line is generally the starting point, it is subject
to extensive uncertainties which arise in the equitable solutions language used in
the Convention and by the International Court of Justice and international
tribunals, and in some cases the equidistance rule may simply not be an appropriate
solution. However, although it may not be possible to eliminate uncertainty, it is
at least possible to minimise that uncertainty. Oil and gas companies seeking an
interest in a potential contract area where the boundaries have not been delimited
or are in dispute should mitigate the risks involved by carrying out careful due
diligence, working proactively with the host state government and seeking the
appropriate contractual safeguards. In so doing, oil and gas companies should be able
to make an informed assessment of the risks involved and reduce the potential for a
toxic mix.
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