International Law and the Use of Maritime Hydrocarbon Resources Presented at the World Gas Conference 2015 - Theme Paper

In the “New Dimensions of Geopolitics and Natural Gas”, both opportunities for and hindrances to the development of the natural gas business are emphasised, in the context of new geopolitical realities. Sometimes opportunities and hindrances have regional or local origins, while other times wider geopolitical issues play a role. Opportunities arise from settling potential disputes over cross-border deposits in an amicable manner, while also in situations where disputes have already flared up remedies can be found on political or legal grounds. In this topical paper the focus is on remedies offered by international law regarding maritime hydrocarbon resources.

Currently, disputes among coastal states about sovereignty over maritime hydrocarbon resources in the South China Sea, the East China Sea, and the Eastern Mediterranean Sea regularly feature in news headlines. In the Persian/Arabian Gulf as well, delimitation issues remain outstanding. But also in other areas, delimitations of exclusive economic zones have had to be settled before the expansion of offshore production could ensue. International law often offers solutions to coastal states, but sometimes countries do not accept the outcome for historic or geopolitical reasons and/or refuse to go to arbitration. In these situations other solutions are often found, such as joint production. The agreement between Norway and Russia is an example of a bilateral agreement in which two states settled their dispute amicably and opened up the potential for hydrocarbon exploitation in the previously contested area. Other examples attest to similar conflict resolution successes among states that wish to embrace their offshore hydrocarbon potential.

In some cases wider geopolitical and economic interests get in the way of finding a workable solution. The attempts of the coastal states of the South China Sea to come to a multilateral solution has so far not been embraced by China; China prefers bilateral agreements with individual states. The asymmetry in strategic and economic power between China and the other coastal states may play a role in this.

Although outstanding disputes over maritime hydrocarbon exploitation are often analysed within their geopolitical context, it is important to also look at the potential solutions that can be achieved through international law. Together with the other topical papers, this paper offers a wider perspective on the context of the international gas business.