Territorial delimitation and

hydrocarbon resources
Mhairi Main Garcia
Ashurst LLP

This chapter examines whether the combination of territorial delimitation and

hydrocarbon resources is a toxic mix. It considers what constitutes sovereignty and
territory and the mechanisms available for settlement of disputes. The issues relating
to maritime delimitation and disputes and the risks confronted by oil and gas
companies operating in contested boundary areas are then examined in greater
depth.

1. Introduction
The frontiers that divide States are among the most fundamental elements regulating
their relationships. For they limit and define the authority each wields.1

Territorial sovereignty and territorial limitations are of fundamental importance in

international law, as sovereignty represents the basic constitutional doctrine of the
law of nations, which governs a community consisting primarily of states having a
uniform legal personality.2
The discovery of oil and gas increases the economic and political pressures to
settle territorial disputes and define boundaries. The United Nations Convention on
the Law of the Sea 1982 (the Convention) confers on coastal states sovereign rights
for the purpose of exploring and exploiting, conserving and managing the natural
resources.3 As a result, where there is a dispute concerning which state has
sovereignty over a territory, or a boundary is uncertain or disputed, resolving that
territorial dispute or defining that boundary will be key to resolving who has rights
over the resources. This is particularly important where there is a risk that oil and gas
deposits are located in a disputed area.

2. Dispute resolution and the international legal order

The principle of the sovereign equality of states is enshrined in Article 2 of the
Charter of the United Nations (the UN Charter). Article 2 goes on to provide that all
states must fulfil their obligations in good faith in accordance with the UN Charter
and must settle their disputes by peaceful means in such a manner that international
peace, security and justice are not endangered. However, there is no obligation under

1 Evan Luard, Conflict and Peace in the Modern International System, State University, 2nd Edition, 1988, at
p 68.
2 Ian Brownlie, Principles of Public International Law, Oxford University Press, 5th Edition, 1999, at p 289.
3 Articles 56 and 77, the Convention.