Cross-Border Unitization and Joint Development Agreements: An International Law Perspective

Sovereignty, territory, and boundaries are key concepts of public international law. They define essential attributes of a state, the primary subject of international law. Sovereignty represents 'the basic constitutional doctrine of the law of nations, which governs a community consisting primarily of states having a uniform legal personality.' Sovereignty means that states have '1) jurisdiction, prima facie exclusive, over a territory and the permanent population living there; 2) a duty of non-intervention in the area of exclusive jurisdiction of other States; and 3)the dependence of obligations arising from customary law and treaties on the consent of the obligor.' Furthermore, '[t]he territorial sovereignty of states extends to the mineral resources in the soil and subsoil of their land territory and territorial sea to an unlimited depth.' States have exclusive sovereign rights rather than full territorial sovereignty over mineral resources located in the continental shelf. Sovereign rights of a coastal state for the purpose of exploring and exploiting the natural resources extend to the EEZ. Experts predict that demand for petroleum, a relatively cheap energy source and chemical feedstock will grow significantly in spite of the fact that prediction of future oil prices are often wrong. This prediction appears to be confirmed by the current high price for oil. Consequently, the pressure to locate and exploit petroleum deposits that cross international borders or lie in disputed areas will also increase. This may lead to conflicts among neighboring states unless consistent, obligatory practices and binding legal regimes are established. Therefore, the development of cross-border petroleum reserves needs an adequate legal regime in order to prevent future conflicts. Promoting states' efficient and environmentally sound exploitation of these resources must also be a consideration of these legal regimes. Hence, this area of law has increasingly attracted the attention of legal scholars and the international legal community.