In an interesting twist of events, the Ivorian government formally requested the International Tribunal of the Law of the Sea (ITLOS) for a suspension of oil exploration and production activities in the disputed maritime boundary pending the resolution of the case in 2017.
Methinks however that the Ivorians have begun to sense defeat even before the case is adjudicated upon at the Special Chamber of the International Tribunal of the Law of the Sea (ITLOS – Case No. 23) and want to play the strategic game (from a game theory perspective) by pushing for Ghana to stop exploration and production in the said area. ITLOS is expected to give its “full verdict” on the dispute in late 2017, although a decision on the “preliminary measures” filed by Cote d’Ivoire should come by the end of April according to a Tullow press release.
The Tano basin is a proven petroleum basin with a prolific hydrocarbon play potential holding an estimated 8 billion barrels of oil equivalent potential. So, this comes as no surprise to some of us who have been following events in the region. The disputed area covers portions of the Jubilee Field, Tweneboa, Enyenra, the Owo discoveries, West Tano-1X find and the deep-water Tano block in Ghana’s territorial waters. Tullow, Kosmos, Vanco and others are exploring for commercial oil plays in this ultra-deepwater terrain. Arbitration proceedings which were commenced by Ghana in 2014 in an effort to resolve a dispute with regard to the maritime boundary between Ghana and Côte d’Ivoire fell through.
In its request, Côte d‘Ivoire is asking the Special Chamber to prescribe as provisional measures that Ghana shall:
- “Take all steps to suspend all oil exploration and exploitation operations under way in the disputed area;
- Refrain from granting any new permit for oil exploration and exploitation in the disputed area;
- Take all steps necessary to prevent information resulting from past, present or future exploration operations in the disputed area conducted by Ghana, or with its authorization, from being used in any way whatsoever to the detriment of Ccôte D’ivoire;
- And, generally, take all necessary steps to preserve the continental shelf, the waters super-adjacent to it, and its subsoil; and
- Suspend, and refrain from, any unilateral activity entailing a risk of prejudice to the rights of Côte d’Ivoire and from any unilateral action which could lead to aggravating the dispute”
What’s the price to pay?
The Ivorians, in pushing for a postponement of oil and gas activities using legal gymnastics pending the final resolution of the case at the Hamburg tribunal can significantly derail the Tweneboa-Enyenra-Ntomme project (TEN) on the offshore Deepwater Tano block by about two years, time Ghana cannot afford to waste. The TEN project remains key to Ghana’s medium term energy security goals as gas from the field is expected to significantly contribute to thermal power generation as we wean ourselves of supply from the ever unreliable West African Gas Pipeline (WAGP).
Tullow Oil remarked in a press release that “… advice from external counsel is that Ghana has a strong case under international law that the current boundary location, which follows AN EQUIDISTANCE LINE, will be upheld by ITLOS in accordance with the Law of the Sea Convention to which both states are party. Work on the TEN project continues and remains on schedule and on budget for first oil in mid-2016.” Tullow Oil lost over $308 million (7.7%) of its market value on Monday, amidst concerns that a boundary dispute between Ivory Coast and Ghana could delay the TEN project.
In the joint declaration of Judges Nelson, Chandrasekhara Rao and Cot in the dispute concerning delimitation of the maritime boundary between Bangladesh and Myanmar in the Bay of Bengal (Bangladesh/Myanmar) they note:
“Priority is given today to the the equidistance/relevant circumstances method. Resort to equidistance as a first step leads to a delimitation that is simple and precise. However complicated the coastline involved is, there is always one and only one equidistance line, whose construction results from geometry and can be produced through graphic and analytical methods. A provisional equidistance line is to be drawn, calculated by reference to adequate base points chosen along the continental coasts of both parties. As the International Court of Justice stated authoritatively in the Maritime Delimitation in the Black Sea (Romania v. Ukraine) Judgment, it is only if there are compelling reasons that make this unfeasible on objective”
The Judgement of the ITLOS tribunal in the maritime boundary dispute between Bangladesh and Myanmar was the first decision on the delimitation of the continental shelf beyond the 200-nautical-mile (nm) limit (outer continental shelf or OCS). Bangladesh won the case and consequently the territorial sea was delimited by an equidistance line. In relation to the exclusive economic zone and outer continental shelf, the tribunal decided to draw a provisional equidistance line which it then adjusted to take into account the concavity of the Bangladesh’s coastline.
Though the jury is out on this (early days yet), the case somewhat favours Ghana more than Ivory Coast based on the equidistance principle which was used to delimit the maritime border. However, should the Ivorians succeed in winning the preliminary hearing at the Tribunal, the TEN project could face an almost two year hiatus. There are also significant risks should the substantive case go the way of the Ivorians. What happens to sunk investment costs, project delays, legal issues, new contracts, etc?
Recent Experiences from Other Regions
Similar disputes between Nigeria and Sao Tomé and Principé continues to highlight the fact that geology is no respecter of artificial political boundaries. The resolution of the dispute led to the development of the Joint Development Zone (JDZ) and revenue sharing agreements. Eritrea and Ethiopia fought deadly wars over land and territories in the 1980s and 1990s, as have Libya and Chad for similar reasons.
Uganda, Tanzania and Kenya likewise have had border disputes and conflicts. Nigeria and Cameroon clashed several times over the oil and gas rich Bakassi Peninsula which was later settled in favour of Cameroon by the International Court of Justice in The Hague.
Post the ruling on the case in 2017, Ghana and Cote D’Ivoire should push for and agree on a framework for collaboration within a JDZ framework for fields which straddle both maritime borders. Luckily, the new Petroleum and Exploration Bill anticipates this.
|Circle shows the contentious maritime boundary. Ivory Coast’s delimitation is more to the right whereas Ghana’s is more to the left.|
- Part 1: http://theoacheampong.com/uncategorized/crude-oil-find-in-ghana-cote-divoire/