Wednesday, 20 February 2013

China rejects Philippine application for UN arbitration over disputed territories

China's Foreign Minister Hong Lei announced on 19 February that Beijing has rejected the Philippines' application for international arbitration over both states claims to disputed territory in the South China Sea which is known as the West Philippine Sea by Manila. The latter's Secretary of Foreign Affairs, Albert del Rosario, had announced on 22 January that the Philippines had taken the step of bringing China before an Arbitral Tribunal, under Article 287 of the United Nations Convention on the Law of the Sea (UNCLOS). The move followed nearly 17 years of unsuccessful bilateral discussions, initiated by the Philippines in 1995, over sovereignty of the potentially oil-rich waters.

China lays claim to, and controls, virtually the entire area, despite six countries claiming maritime territory in the South China Sea. This horseshoe-shaped area, delineated by China's so-called “nine-dash line”, stretches over a vast area that Beijing claims historical rights to. Rosario argues that this territory encompasses not only the entire South China Sea but also violates Philippine rights to a Territorial Sea and Contiguous Zone, an EEZ and a continental shelf, as stipulated by UNCLOS.

China's rejection of arbitration comes amid growing tension in Asian waters. Last year saw a standoff involving Chinese military ships and Philippine vessels after the former took control of the Scarborough Shoal, referred to by China as Nansha, over 500km due West of Manila. Following that incident, in which the Philippines eventually withdrew, China also engaged in military drills in the East China Sea, a clear show of force to Japan over their ownership of the disputed islets of Senkaku. The Philippine Secretary of Foreign Affairs has said that he will not be deterred by China's intransigence and will continue to press for arbitration over the regional hegemon's “excessive claim”.

Tuesday, 19 February 2013

Lebanon announces pre-qualification round for offshore oil and gas exploration

On Friday 15 February the Lebanese authorities announced the launch of a pre-qualification round for those IOCs interested in its offshore acreage. The statement came after news that up to 675 million barrels (MMB) of oil and 16 trillion cubic feet (TCF) of gas have been discovered in Lebanese waters adjacent to its northern maritime border with Cyprus and Syria. So far up to 30 IOCs have expressed their interest with contracts due to be signed in 12 months and drilling to begin at the end of 2015.
Despite the obvious potential, as witnessed by the US Geological Survey's (USGS) 2010 estimate that the Levant Basin as a whole could contain two billion barrels of oil and up to 123 TCF of gas, it has taken over two years for the government in Beirut – which has been dogged by slow-motion politics, neighbouring conflicts, and sectarian divides - to establish a Petroleum Administration to handle applications from IOCs bidding on exploration blocks. The delay has been compounded by the issue of the region's unresolved maritime border disputes.
In 2007 a bilateral agreement was signed between Lebanon and Cyprus on the delimitation of the former's Exclusive Economic Zone (EEZ) but, in protest at the 2010 bilateral agreement between Cyprus and Israel, it has never been ratified by the Lebanese government. There is a disputed area of 874 km2, as Israel began its maritime border with Cyprus at Point 1 which coincided with the final point demarcated between Lebanon and Cyprus. Beirut argues, however, that this final coordinate was deliberately chosen because it was in uncontested Lebanese waters and that the de jure border should actually lie 17 kms further at Point 23. This dispute, as well as Turkish political pressure on Lebanon, has also held up the ratification of the 2007 Lebanese-Cypriot agreement, despite the existence of clauses in these agreements to accommodate for amendments.
In a move to hasten the acceptance of an agreement and strike an accord between Lebanon and Israel, which technically still remain in a state of war, Cyprus' outgoing President Demetris Christofias signed a memorandum of understanding with Lebanon's President Michel Sleiman in January 2013 to “ to increase co-operation to agree on principles and sound means that would allow us to extract this resource.” This latest discovery, plus the huge discoveries already made in both uncontested Israeli and Cypriot waters, have put fresh impetus on all sides to come to an agreement which will enable the whole of the Levantine Basin to be explored without violating each other's maritime sovereignty.