International conflicts waged due to territorial disputes often veil a scramble for hydrocarbon resources. In many cases, the problem lies in the overlapping of resource reservoirs with interstate borders, triggering bouts of competitive exploitation and/or confrontation between states. Cooperation in resource development, in the form of Unitization or Joint Petroleum Development, can potentially minimize the probability of conflict if properly integrated into the international legal order.
For as long as man has recorded history, nations and empires have fought and conquered for the resources vital to their sustenance and superiority. In modern times, Hydrocarbon resources are the strings of power, and are thus often at center of both political and military conflicts. Oil, and to a lesser extent natural gas, are the cogs which keep the wheel of the global economy spinning; domination and exploitation of these resources often drives states into headlong political collisions due to the value of the resources and the political factors this value entails.
Conflicts over resources are most likely to reach deadlock in cases involving border disputes and condensations of natural wealth in border areas. Conflicting claims of right over resources leads to an ambiguous legal, moral, and political situation.Border demarcation, particularly maritime borders, is by nature imprecise, which only serves to exacerbate the problem.
Cases in which a single reservoir of petroleum resourceslies under land separated by national borders are particularly problematic. When petroleum deposits overlap borders, resources on one side may often be exploited to varying degrees by the other side.Development of resources is thus either put on hold or is exercised by some or all parties in competitive fashion, producing costs for all parties in lost potential resources and in some instances triggering military conflict as a result of these costs.
In order to minimize geopolitical tension and the probability of military confrontations, a mechanism for resolving such disputes and anomalies must be developed through legitimate channels. This mechanism must provide an attractive alternative to conflict and confrontation, one which presents to the involved parties a cost-benefit scenario preferable over both a non-resolved status quo and resolution through armed force.
Nation states must be offered viable, guaranteed economic gain, along with the least possible amount of political loss. Borders and national wealth are both issues of sovereignty, a volatile and invaluable element in international relations and one which stands as the foundation supporting ruling regimes and entire states.It is instrumental to remove sovereignty from the equation,at least as a zero-sum element, by placing the issue in the realm of ‘forced’ cooperation via international law.
The concept of unitization, often employed between oil companies within the borders of any given state, can and has been implemented in interstate cases.Unitization is a practice through which a single reservoir of resources that overlaps several leases is conjoined as one production unit. Rather than pursuing competitive drilling, the lease-owners use their assets (wells, etc.) in coordination in order to maximize petroleum recovery from the reservoir, dividing the production itself amongst them. In the case of states, its implementation is a possibility when clearly defined borders divide a single petroleum deposit.
Joint petroleum development is a similar concept, applied exclusively in interstate cases and similarly involving optimization of a petroleum reservoir in order to function as one production unit and achievethe highest possible output.Joint development is only different in that it is implemented in the gray areas of international law, namely in cases where the national borders themselves are disputed or two or more states are legally entitled to the same territory.
The incorporation of these concepts into international law in some form is likely to prove helpful in diffusingpolitical standoffs or sidestepping them altogether.Both practices are widely applied in stable situations in which relations between the involved states are amicable and the petroleum reserves in question are not substantial enough to warrant conflict. In more volatile scenarios, however, dispute and conflict often erupt in place of unitization and joint development.
This due to the absence of set rules governing the issue, which leaves political points at stake in the case of failure to secure maximum resources. This is particularly true when the states involved have tense or confrontational relationships on which their domestic and global legitimacy depends. This is demonstrable in the case of the East Mediterranean dispute. In the struggle for Mediterranean petroleum resources,Israel is unlikely to cede ground to either Lebanon or an increasingly hostile Turkey, and the opposite is certainly just as true, not solely for the value resources in place but because of the political consequences it would entail for these states in both the domestic political scene and the international arena.
The ruling regimes of these countries cannot afford to be seen as cooperating in the development of these resources with a non-friendly state, lest it be perceived as a concession of sovereignty. The Eastern Mediterranean’s Levant Basin Province houses an estimated 3.4 trillion cubic feet of natural gas as well as roughly 1.7 billion barrels of recoverable oil.
Cyprus and Israel have already begun attempts at extracting resources in their claimed territory, prompting a furious diplomatic response from Turkey. Lebanon’s unilaterally demarcated border with Israel does not recognize Israel’s right to these resources. The situation is slowly simmering in the background of international relations, escalating towards more significant altercations.
All parties involved are likely to pursue unilateral, confrontational policies as a result of the lack of alternative that diminishes political costs and guarantees economic gain. The assimilation of unitization and joint petroleum development into international law would provide this alternative.
The lack of a legal framework also allows plenty of maneuvering room for states looking to attain optimum economic gain regardless of the principles of international law and the modern international community. A prominent example from recent history is the conflict of the Gulf War of 1991, between Iraq and Kuwait.
The Iraqi regime of Saddam Hussein blamed Kuwait of using slant drilling techniques to extract oil from the Iraqi side of the Rumaila oil field, one of the largest in the world, the vast majority of which lies on the Iraqi side of the border. Regardless of the accuracy of the accusations and of who the culprit is, military conflict ensued because it was determined as the most advantageous course of action by the Iraqi regime in the absence of international legislation that organized resource development in the territory.
Kuwait would not have been afforded the chance to plunder Iraqi oil, nor would Iraq have been given a window of opportunity to attack Kuwait on such pretenses, had there been an obligation by both sides to unitize the field’s production. Iraq would have been contractually guaranteed the lion’s share due to the fact that most of the reservoir lies under its land, maximum oil extraction would have been achieved, and the costs of the war for both countries and their oil industries would have been avoided.
As it currently stands, international law prohibits theft of natural resources from other states, and actively encourages cooperative development of joint or disputed resources. The concept of territorial sovereignty over natural resources does not apply to ‘fluid’ resources like petroleum in the same way it applies to ‘solid’ ones like gold. States are obligated by international law to respect and not exploit the natural wealth of neighboring states, and thus there it is argued by some experts that there is a de facto obligation to develop resources are disputed or overlapping in collaboration. Several United Nations General Assembly resolutionsback this notion through their stressing of cooperation in exploiting such resources.
It can therefore be argued that unitization and joint petroleum development are tenets of customary international law. But the issue is volatile enough to warrant a solution that puts an end to all argumentation. Primary rather than secondary sources should assert the notion of mandatory unitization and joint petroleum development between states whose borders are disputed as well as those whose petroleum reservoirs cross borders. Ideally, an international treaty should be drafted to clearly outline said obligation.
Cross-border unitization and joint petroleum development are both extensively complex processes. Reaching agreeable terms for all parties involved, including separate agreements for lease-owners in the case of unitization can be exceedingly difficult and may dissuade states and corporations from currently adopting these practices more frequently.Furthermore, inducting them into the international legal framework will not guarantee adherence since international law, while legally binding, lacks any mechanism of effective enforcement.
States cannot be forced to comply, nor can they be forced to sign into treaties they perceive to be not to their advantage, and international treaties are only binding towards signatories. Creating international legal obligations in the international community does create political pressure on countries to comply, however. Political costs will also be minimized due to the fact that sovereignty will not be substantially compromised. Rather than conceding its claims over territory and resources to the opposite party by agreeing to jointly produce resources, a state will simply be bowing down to international law, which is a partial surrendering of sovereignty expected of and accepted from any modern state. Economic gain, while potentially lower, will also be guaranteed.
The risk of new disputes arising as a result of reinforced legal rights is virtually non-existing in this scenario, owing to the fact that non-disputed, clearly demarcated borders are not open to renegotiation or change under any circumstances, according to the rules of international law.
As stated, there is no way to truly keep nation states in line regardless of the amount of international legislation instated. There is, however, a historically unique opportunity in the modern era to reduce the amount of conflict over resources simply because violence for the sake of gain at the international level has lost most if not all credence in the mainstream discourse. Creating the proposed legal boundaries will further marginalize the legitimacy of war while simultaneously producing economic gain and development.
This will diminish the probabilities of military and political conflict and reinforce global security and geopolitical stability, but it is not exclusively an issue of security. It is also good business sense. The Rumaila oilfield ceased production for six years due to the Iraq-Kuwait dispute. Resource development in the East Mediterranean has placed several states on a collision course that is bound to affect production. Border disputes between the Republic of Sudan and the newly seceded South Sudan are almost entirely oil-centered, and have prompted the government of South Sudan to halt oil production despite the fact that the overwhelming majority of the country’s resources come from the industry.
Disputes resolved through force may eventually be beneficially to the winning side, but unresolved disputes serve no one, including petroleum companies.This is precisely where the initiative may potentially rise. If the big companies realize it is in their economic interest to promote stability in volatile areas in order to exploit resources, nation states may follow suit with the necessary legislation and practices.
It is impossible to successfully regulate the international community according to an unchanging legal or moral code, but in an age in which economic interest often trumps political rivalries and violence must be legitimized, cooperation for the sake of guaranteed gain presents unprecedented opportunities. If unitization and joint petroleum development are mandated by international law, security and economic development (both goals of all rational statesmen) will be boosted on a global scale.
By Ahmed MaatyDownload