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20 Jan

OIL AND GAS 1.2B OWNERSHIP OF OFFSHORE OIL AND GAS

OWNERSHIP OF OFFSHORE NATURAL RESOURCES.

Because petroleum is an accident of nature, it occurs onshore[1] and offshore[2]. Water makes up more than 2/3rd of the Earth. Where petroleum is discovered in the waters or deep seas, the question is; who owns it?

International Laws provide answers to this by delimiting the boundaries of states in relation to the owner ship of petroleum found in their territory. This is done in the interest of justice, peace and development of the world-UNCLOS preamble.

Niki Tobi in Abraham V Olorunfunmi defined ownership as the greatest possible right… Section 44(3), Section 2 (PIB), Section 1 Petroleum Act, Minerals Act vest ownership of oil and gas including those in the territorial waters, continental shelf, EEZ…  in the Federal Government.

The international Arena: Is regulated by international law.

The principle of Sovereignty of State over territorial waters: stemming from the postulation of Bynkershoek that coastal states should be able to extend its jurisdiction beyond its waters up to a canon shot range (3 nautical miles) for security reasons. Various declarations like; Permanent Sovereignty over Natural Resources Resolution 1803, Charter on Economic Rights and Duties of states. Article 2 of the United Nations Convention on the Laws of the Sea (UNCLOS) 1982 and Article 1 of the Geneva Convention 1958… recognise that the sovereignty of a state extends beyond its land areas to its territorial sea. Article 3 of the UNCLOS and Section 1(1) Territorial Waters Act, and other laws have extended this to 12 nautical miles subject to the right of innocent passage. This position was reaffirmed in the North Sea Continental Shelf Cases.

Article 77 of the UNCLOS grants coastal states the exclusive sovereign right to exploit natural resources on its continental shelf. Same position in Section 1(2) of the Petroleum Act. Subject to navigational rights of other states- Article 78 and the duty not to pollute the marine environment-Article 193 UNCLOS. Article 60, 79, 81 and 112 of the UNCLOS entitle states to drill, construct, build and carry out similar activities on the continental shelf.

Article 76 defines the continental shelf (With the exclusive economic zone concept) as comprising the seabed and subsoil of the submarine areas extending to a distance of 200 nautical miles from baselines from which the breadth of the territorial sea is measured.

 

Article 55 of the UNCLOS recognises the Exclusive Economic Zone concept. Section 1 of the Exclusive Economic Zone Act of Nigeria defines it as an area extending from the external limits of the territorial waters of Nigeria up to a distance of 200 nautical miles/370.65 km from the baselines from which the breadth of the territorial sea is measured. Similar provision in Article 57.

 

It is pertinent to note that unlike the continental shelf concept, the EEZ concept must be domesticated to be enforceable in a host state.

Where the resources occur trans-boarder, the states are advised to settle amicably. The states can form a Joint Development Agreement (JDA) which is a provisional settlement. JDAs have been concluded between Nigeria and Sao-Tome Principe (2001), Japan and Korea, Sudan and Saudi Arabia and a host of other states.

 

[1] On landed territory

[2] On water. Like the deep seas.

Isochukwu

Quite eccentric really

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