Abstract

Fewer than half of the 500 or so potential maritime boundaries in the world have been agreed, creating uncertainty not only for the coastal States involved but also for their investors active in the offshore oil and gas industry. The complex process of agreeing and fixing boundaries or of making provisional arrangements can be time-consuming and expensive but once agreed can significantly contribute to the economic wealth of the affected countries. Disputes over maritime boundaries regularly flare up around the world and sometimes result in skirmishes. Coastal States with competing claims to maritime areas routinely offer and award oil concessions in disputed waters without the investors taking blocks being fully aware of the underlying inter-State dispute and the risks presented by an un-delimited boundary, especially one featuring straddling deposits. Indeed, maritime boundary disputes form a misunderstood and frequently overlooked area of investment risk management in the energy sector.

The Figure below shows, in red lines, the limit of the Exclusive Economic Zones ("EEZs") of the world, together with maritime boundaries delimited by treaty (depicted by blue lines) and interpreted "strict equidistance" lines in locations where no current delimited maritime boundary exists (shown in orange). The world's EEZ waters, as measured from coastlines (in black) up to the EEZ legal limit (in red), cover approximately 169,000,000 square kilometers (geodetic).

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