The shelf - a future strategic base

25 july 2014

Recently, the Analytical Center held a roundtable dedicated to the management mechanisms of transboundary oil and gas deposits in the Arctic shelf. The discussion was on the implementation of Annex II to the Treaty between the Russian Federation and the Kingdom of Norway on maritime delimitation and cooperation in the Barents Sea and the Arctic Ocean.

The continental shelf and maritime territories are delimitated by the Treaty concluded between Russia and Norway, but there are transboundary deposits (Varangian, October, Kurchatov, etc.), which will be exploited under a special scheme indicated in Annex II to the Treaty. According to the Director of International Law at MGIMO University Alexander Vylegzhanin, “there are challenges in terms of the interpretation and implementation of the articles of the Treaty”. For example, a special agreement should be concluded between the parties regarding solving the common issues in the operation of transboundary deposits, to approve the companies that will be exploiting the deposits and agree on the operator, which will be approved at the government level in the future. There can be only one operator, and accordingly, one jurisdiction, which also entails a number of organizational issues. An agreement must be reached on the choice of the active environmental law and other legal regulations, which sometimes are very different in the two countries.

The official from the Legal Department of the State Duma Olga Glickman talked about the need for an international treaty that would indicate the general principles of cooperation in the oil and gas sector, including the shelf exploitation. “It is necessary to compare the Russian practice regarding conclusion of agreements in this area with the practices of other countries”, - she said. According to Ms. Glickman, the contractual documents should contain all possible risks, because it is better to overestimate them than to underestimate. The expert believes that monitoring of international treaties is necessary regarding the economic impacts, especially for energy.

“The shelf – a future strategic base. According to experts, its development will scale in the 30s, and we still have time to prepare for this process from the legal point of view”, - said the Head of Division at the Ministry of Energy Ivan Panichkin. According to him, Norway is practically our main partner for the development of the Arctic reserves. “We are on a practical approach to the implementation of the Agreement. A Working Group of the two countries has been established and bilateral agreements have been signed, in particular, governing joint actions in cases of oil spills - said Mr. Panichkin. - However, there are unresolved issues – the jurisdiction of the operator and the procedure for crossing the state border”.

The Head of the Department for engineering and technology for offshore exploitation of “Gazprom” Vadim Petrenko talked about the need for founding a practical school for future shelf specialists. “We need a government program to provide practical training for students that will speak the same professional language within future international collaborations”, - he said.

Experts also discussed aspects of Norwegian vision regarding implementation of management mechanisms for transboundary hydrocarbon deposits on the Arctic shelf.