UN awards Sea of Okhotsk enclave to Russia

On 15 March the Russian Minister of Natural Resources and Environment, Sergey Donskoy, announced that the UN Commission on the Limits of the Continental Shelf had recognised a section of the Sea of Okhotsk as part of his country’s continental shelf. The enclave, off Russia’s eastern coast, covers a 52,000 square kilometre area of fishing waters estimated to be rich in oil and gas reserves.

At the press conference, Donskoy told reporters that “This is in fact an accomplished event,” stressing that this decision to place the enclave under Russian jurisdiction was irreversible; Russia will get exclusive rights to the area. He said the Ministry had received a formal certificate from the UN Commission, which gives it exclusive rights to subsoil resources and the seabed, although the Sea technically still remains part of international waters.

Though the news of the UN Commission award is not really new – it was announced back in November – it had to be confirmed by the 33rd session of the body held earlier this month. Speaking last year, Donskoy said "Thanks to recognition of this enclave as a part of the Russian continental shelf, our country will gain more reserves of valuable minerals and other natural resources. This 52,000-square-kilometer territory is a real Ali Baba's cave in terms of resources. Access to it will open up enormous opportunities and prospects for the Russian economy."

The enclave forms part of the Okhotsk Sea, a marginal sea which covers an area of 1.6 million square kilometres in the western Pacific Ocean, located to the west of the Kamchatka Peninsula and north of the Kuril Islands. Traditionally known for its rich fishing waters, up to 40 per cent of the newly awarded enclave could hold hydrocarbons resources. Offshore blocks near the Russian port of Magadan have shown serious prospects in terms of crude deposits.

The Minister has said that Russia’s case for this award is a pre-cursor to its claims in the Arctic Circle, “which will be drafted in the near future”. Russia was the first country to submit territorial claims to the UN Commission charged with demarcating borders in the Arctic. 

Japanese jets intercept Chinese plane

On 7 January, Japanese fighter jets were scrambled to intercept a Chinese government plane flying towards the disputed Senkaku Islands in the East China Sea. The Y-12 propeller plane flew unannounced into Japan’s Air Defence Identification Zone (ADIZ) approximately one hundred miles from the Islands, which China refers to as the Diaoyu Islands. This incident is the latest in a series of confrontations between China and Japan, both of whom seeking ownership of the uninhabited Islands in a bid to claim hegemony over the strategic, hydrocarbon-rich East China Sea.

Tuesday’s events follow what the Japanese view as China’s belligerent announcement of its new ADIZ back in November 2013, which led to the US, Japan’s main ally, flying two B52 bombers through the newly announced air space in protest at the move.  The navies and air forces of the two Asian giants have also repeatedly confronted each other in the locale of the Islands since Japan nationalised them in 2012, with both premiers taking a tougher stand over foreign policy. International observers worry that, if these confrontations continue to increase in frequency and intensity, they could escalate to military engagements drawing in other world powers.

In an unusual diplomatic exchange between officials of the two countries, the Chinese Ambassador to the UK, Liu Xiaoming, wrote "If militarism is like the haunting Voldermort of Japan, the Yasukuni shrine in Tokyo is a kind of horcrux, representing the darkest parts of that nation's soul." In response to the comments referencing Harry Potter’s arch nemesis, the Japanese Ambassador, Keiichi Hayashi, warned that his counterpart’s country risked becoming the “Lord Voldemort of East Asia”.

It is believed the eight uninhabited islands are located near potentially lucrative oil and gas reserves and strategic shipping lanes, as well as being situated in valuable fishing waters. The island's Exclusive Economic Zone would grant the controlling state sovereignty over these resources.

For further analysis on the claims by each side to these islands, please visit our border briefing page on the East China Sea.

Canada makes Arctic claim

Earlier this month, Canada made a partial submission to the UN Commission on the Limits of the Continental Shelf to extend its maritime borders in the Arctic to encompass an extra half a million square miles of territory, including the North Pole. This move has angered some of the other four states who lay claim to a portion of the Arctic, including Russia, Greenland, US and Denmark. Claims to the region will become crucial geopolitical considerations for these states in the coming years, as the area north of the Arctic Circle has an estimated 90 billion barrels of undiscovered oil according to the US Geological Survey.

Canada's Foreign Minister John Baird said last week that, as part of its submission, his government was making a claim on the Lomonosov Ridge, a submerged mountain-range between Ellesmere Island, Canadian territory, and Russia's Siberian coast. Russia, which has historically named the Ridge as part of its territory, responded to Canada's move by increasing its military presence in the Arctic. President Vladimir Putin has reasserted that the region is key to his nation's interests and that he would build up infrastructure in an area that has seen a Russian retreat in recent years.

Despite the charged, publicly-iterated political rhetoric from Canada and Russia, according to researchers from the International Boundaries Research Unit in Durham University, teams of scientists from both nations are working together on the frozen region, and in reality, there is a great deal more co-operation than their leaders let on. Nevertheless, it is likely that Canada's claim is largely political, more than anything else, given that there are no hydrocarbons reserves at the North Pole.

Canada signed the UNCLOS on 10 December 1982 and ratified it on the 7 November 2003, entering into force exactly a month later. As of August of this year, 165 countries plus the European Union have signed the Convention, with the notable exception of US.

China at odds with Japan, US over new air zone

This week has seen a marked challenge to the US' decades-long hegemony over the Asia-Pacific region. On Saturday 23 November, China announced the creation of a new “air defence identification zone” in the East China Sea, which controversially overlaps with an air zone set out by Japan and covers the disputed Senkaku/Diaoyu Islands. Both Japan and the US are heavily opposed to the air zone and see it is a destabilising move in an already fraught maritime area dividing these two Asian neighbours.

Unannounced, the US flew two B52 bombers over the disputed Islands in defiance at the new Chinese air rules on Tuesday 26 November. The aircraft took off from the island of Guam, a US military outpost in the Pacific, as part of a routine defence exercise, without filing the flight plans with Chinese authorities, sending a clear signal that Washington is not prepared to accept any unilateral change to the status quo. China said that the entire flight was closely monitored and that aircraft that pass through the zone must obey its rules and declare their plans.

Beijing has told Tokyo that the flight information for all Japanese-chartered flights travelling through this air space must be filed with them in advance. Having firstly met the request, Japan's premier Shinzo Abe said shortly after the US bomber flight that Japan would not be doing so in future, saying instead that the zone was “invalid”.

Military muscles were flexed by both powers this week as tensions continue to mount. The day after the B52s flew across the East China Sea, the Japanese parliament passed a bill which enshrined a national security council, effectively handing over more control of the state military apparatus to Abe. On Wednesday 27 December, China's President Xi Jinping launched the country's Liaoning aircraft carrier into the South China Sea – another area where they are engaged in several maritime border disputes.

Relations between the second and third-largest economies in the world have been strained during the last year, as Japan has remained defiant of its territorial rights over islands in the East China Sea in the face of an increasingly robust foreign policy by China. Ships and aircraft from both sides have been involved in provocative military exercises in each other's back yards since Japan officially bought three of the islands from a private owner in September 2012.

It is believed the eight uninhabited islands, referred to as the Senkaku and Diaoyu Islands by Japan and China respectively, are located near potentially lucrative oil and gas reserves and strategic shipping lanes, as well as being situated in valuable fishing waters. The island's Exclusive Economic Zone would grant the controlling state sovereignty over these resources.

For further analysis on the claims by each side to these islands, please visit our border briefing page on the East China Sea.

Offshore exploration tender issued by CNOOC

China's leading offshore oil producer, the state-run CNOOC, has issued a tender on the company website yesterday inviting IOCs to bid to participate in the exploration of 25 oil and gas blocks, the majority of which are located in the South and East China Sea. The blocks cover a total area of 102,577km², include 10 highly attractive deep-water patches and represent the largest offshore tender offered (in terms of real size) by China since the 1990s.

The announcement is the latest in a series of moves by China to assert its claims in the strategically-located South and East China Sea by launching tenders for oil and gas blocks, as well as frequent diplomatic manoeuvres and shows of military strength. Tellingly, the Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe did not formally meet at the Asia-Pacific Economic Co-operation summit last week, following an escalation of tensions between the two Asian giants over the sovereignty of the Senkaku/Diaoyu Islands in the East China Sea. Last week, Abe made a defiant statement claiming that Japan would not make any concessions on its territorial integrity.

Two of the newly announced blocks, 33/02 and 41/14 in the Lishui Sag area, are located in close proximity to the disputed Islands, whose purchase by Japan last year reignited the centuries-old question over ownership. The state-run company is also thought to be investing $5 billion in developing submerged gas fields in the East China Sea, with the possibility of tapping gas deposits in Japanese waters through diagonal and horizontal drilling methods. The company has already come under scrutiny this month from Green Dragon Gas, which claims that CNOOC breached production sharing contracts by drilling wells on its licences without notification.

In June, China angered Vietnam by inviting IOCs to jointly participate in the development of nine blocks in the waters around Hainan, blocks which Hanoi considers overlap into their maritime territory. CNOOC's usual operating procedure is to team up with foreign firms during the exploration phase, but holds the right to take a 51% in the block once a commercial find is made. PetroVietnam was involved in a dispute with its northern neighbour last December when Beijing accused it of 'unilateral oil and gas exploration activities'.

For more background on the China-Japan Islands dispute, please refer to our previous news story dated 30 September 2013.

A new 'flashpoint'? The Israel-Lebanon maritime border dispute

Overview

At first glance, a new flashpoint in the Middle East appears to be emerging in the form of the disputed maritime border between Israel and Lebanon. The states have not successfully formalised their maritime borders, and this has become problematic with the discovery of natural gas reserves in the Levantine Basin. The discovery of the Tamar and Leviathan fields has prompted speculation that other, similar discoveries stand to be made along the coastline of the eastern Mediterranean. This suggests the increasing criticality of precisely delimited maritime boundaries between the states' exclusive economic zones (EEZs), within which they exclusive rights over natural resource exploitation.

Four hundred and thirty square miles are contested in the present dispute which is made further problematic by the diplomatic relations between the state parties: Lebanon, for example, does not recognise Israel and has left the matter open for resolution by the UN. The UN has said that it cannot take any such action on the basis that the delineation of the maritime boundary between the states is no part of the UN Interim Force in Lebanon (UNIFIL) mandate. For its part, Israel includes the maritime boundary as but one aspect of the generalised political crisis that it says characterises the entire maritime and land border that separates it from Lebanon. The other major player, the US, has appeared to support the Lebanese position for instrumental reasons, and its representative has sought to depoliticise the current crisis, and frame it in technical and legal terms.

It would seem that the US is on its own, at least in this respect. Media reports have speculated on the potential for a repeat of the war fought between Israel and Lebanon five years ago, with the maritime border as the new, critical factor. But while the dispute may be overtly political it seems that risks of a new confrontation are being exaggerated. Moreover, it may also be that the position adopted by the US with respect to its ally, Israel, is not as unusual as it may first appear; rather, it is the continuation of policy through more nuanced means.

The nature of the dispute

In August 2010 the Lebanese government submitted a map to the UN which, through the use of a border line, defined the extent of its EEZ. This line is to the south of the equivalent line proposed by Israel on 10 July 2011, but its position has been endorsed by the US government. Prime Minister Netanyahu of Israel has argued that the Lebanese line contradicts both the lines that both Lebanon and Israel have agreed with Cyprus in, respectively, 2007 and 2010, on the western extents of their EEZs.

In international law, the principle of acquiescence suggests that a right to a claim may be lost if a party remains silent when a unilateral move, i.e. the claim to territory articulated by the Lebanese submission of a map, is made. It was for this reason that the Israeli cabinet approved its own border delimitation during the last week. Lebanon's response has been to signal its commitment to protecting the 2010 borders. The hydrocarbon reserves enclosed by the limits of these overlapping claims are those at the centre of the present dispute. Energy analysts have discussed how Israeli control of them would make Israel a gas-exporting state whereas, at present, its supply is under threat of disruption, the pipeline from Egypt having been repeatedly bombed in recent months.

Elements within the Israeli government have argued that protestations to the Israeli line are made by elements within Lebanon, principally Hezbollah, intent on provoking a conflict. This, to Israeli officials, may represent a maritime Shebaa Farms—the area of territory that Hezbollah has long accused Israel of occupying illegally, but claimed, by Israel, as a part of the Golan Heights—and, thereby, offer the pretext to a conflict. As in the case of the Shebaa Farms, their policy view is that the territory is legitimately held, and that the existence of the dispute and the competing claims presents little more than a rationale for a confrontation provoked by the hostile powers that surround Israel. Indeed, a position used by Israeli politicians is that the present dispute is symptomatic of a relationship with Lebanon, in which elements within the country will seek to thwart everything that Israel seeks to do.

The Lebanese government's position has been that Israel has violated international law, and Lebanese sovereignty, in coming to the 2010 agreement with Cyprus. In January 2011 the Lebanese Foreign Minister wrote to the UN Secretary-General to ask that the UN work to prevent Israeli exploitation of hydrocarbon reserves in within the EEZ determined in the maps submitted by his ministry in August 2010. The Energy Minister, Gebran Bassil, has said that the government plans to auction off concessions in 2012; before then he has said that Lebanon will seek to counter Israel's continuing aggression and retaliate through political and diplomatic means.

The position of the US, and of the senior US diplomat in charge of the Israel-Lebanon brief, Frederic Hof, has been to ensure that the dispute cannot become the pretext for conflict that the Israeli government anticipates. Hof has sought to ameliorate tension through the appearance of appeasement, if not appeasement outright. The US, after all, has a number of private commercial interests within this context; companies are involved in exploratory and research activities in the Levantine Basin. Hof has appeared to back, at least in part, the Lebanese line, and has suggested that Israel submit the dispute to the UN, and indirectly negotiate with Lebanon through this channel, given the non-recognition problem. (Israel has, of course, refused this option and called upon Lebanon to negotiate all of the current border issues, both on land and at sea.) Its commercial interests considered—and its future access to the reserves in question—it is in US interests to adopt a policy that does not automatically privilege its longstanding regional ally in the Middle East. The US has recognised the danger of the pretext in the specific setting and played its hand accordingly; it will back the Lebanese claim to avoid a Shebaa Farms situation at sea and protect the interests of American firms and investors.

The way ahead

Perhaps this apparent marginalisation of Israel by the US makes more sense than at first it might appear. Granted, the commercial interests are important, but two other concerns should also be considered: Israel's energy security (and recognition of the potential disruption of the gas supply to Israel, and the increase in prices that this would dictate); and the actual scale of the natural resource reserves in the disputed area. A third factor, the likelihood of a new conflict, five years on from the border war, is also debatable despite the line peddled by news sources.

The disruption inflicted by recent attacks upon the gas pipeline between Egypt and Israel have shown that attacks on Israeli gas facilities will not be borne lightly. In this sense the US and Israel can work together: Israel can perform a display of jealously guarding its sovereignty, while its more powerful ally can adopt a pragmatic, conciliatory line, and support the Lebanese claim. This may reduce the potential for gas supply disruption to Israel given that the justification for Hezbollah sabotage could evaporate; the US conciliates so that Israel does not have to appear to stoop so low.

With respect to the scale of the deposits in the disputed area, it may be that the problem is being inflated quite falsely. According to one source, the border route that follows the Lebanese course affects only the northern parts of the Alon and Ruth licences which, although they may contain smaller oil and gas deposits, are not the prime concerns of Noble Energy and Delek, the firms that own the licences. Their primary interests are situated further south. If this view is correct then the major consequence of adopting the Lebanese maritime line would only be to delay—and by no means permanently forestall—the development of the less consequential Alon and Ruth licences.

Hof has attempted to frame the dispute in technical and economic terms and to ensure that it does not become a political matter. Perhaps this is in line with an overall US strategy, concerned with protecting Israel but, moreover, with appeasing Iran, Syria and Hezbollah. Put simply, perhaps the stakes are not as high, and maybe Israel is not conceding as much, as the US and Israel might like it to appear at first sight.

In any case, as Eyal Zisser of Tel Aviv University has argued, a conflict between Israel and Lebanon is unlikely. Both sides have a great deal to lose. Rocket attacks on Israel, and the destruction of Lebanese infrastructure would be the consequences, and the 2006 war is still a memory fresh enough to provide a measure of deterrence. Supporting the Lebanese interpretation of the maritime boundary therefore provides the US with a route to protect the Israeli energy supply, articulate a show of its own strength (and independence from Israel), at cost (in resource terms) that is lower than it seems.

Sources: Al Arabiya, Bloomberg, The Financial Times, Haaretz, The Independent, Jerusalem Post, Jewish Week, New Zealand Herald

For more information, please see the Menas Borders website, here.