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Payvand Iran News ...
06/19/14 Bookmark and Share
Is Qatar plundering Iran's share in the South Pars joint gas field?

By Bahman Aghai Diba, PhD international law of the Sea


Map source: www.theenergylibrary.com

The South Pars gas field, which is the largest single gas field in the world, is a joint gas field in the Persian Gulf in the borders of Iran and Qatar. While Qatar has succeeded to use these resources in the line of achieving the highest per capita income in the world, Iran had hardly been able to do anything other than supplying gas to its own domestic consumers in subsidized prices. The main obstacle for Iran in developing these resources is the sanctions imposed by the UN, US and EU on Iran, especially on the oil and gas sector. Iran is in serious need of technology and investment to reach its set goals in exploitation of these resources. However, at the moment, some persons in and out of Iran are warning that Qatar may be using the joint resources in a way that Iran’s share is depleted. Also, there is an important point here: is Qatar under any obligation to cooperate with Iran for using this common deposit?

According to the International Energy Agency (IEA), the South Pars (Qatar calls its part the Northern Dom) field holds an estimated 1,800 trillion cubic feet (51 trillion cubic meters) of natural gas and some 50 billion barrels (7.9 billion cubic meters) of natural gas condensates. This gas field covers an area of 9,700 square kilometers (3,700 sq. mi), of which 3,700 square kilometers (1,400 sq. mi) (South Pars) is in Iranian territorial waters and 6,000 square kilometers (2,300 sq. mi) (North Dome) is in Qatari territorial waters. The Iranian section also holds 18 billion barrels (2.9 billion cubic meters) of condensate in place of which some 9 billion barrels (1.4 billion cubic meters) are believed to be recoverable, while Qatari section believed to contain some 30 billion barrels of condensate in place and at least some 10 billion barrels (1.6 billion cubic meters) of recoverable condensate.(1)

Iran remains insignificant as a natural gas exporter. There are several key reasons for its poor export records .International sanctions present one of the major obstacles, seriously crippling the entire Iranian economy including its gas industry, which is approaching collapse. Until 2010 their effect on the Iranian energy sector was rather modest, but new sanctions which directly targeted the Iranian energy sector have significantly impacted the development of the natural gas industry, with all Western companies leaving the Iranian market. European Union sanctions introduced in 2010 blocked Iran from receiving all technology used in exporting liquefied natural gas, including tankers for transport. As a result, all LNG projects in Iran stalled, as Russian and Chinese experts could not provide substitutes for Western technology so the country could only export by pipeline, which accounts for only a fraction of its natural gas sales. In comparison with Qatar which exports around 125 bcm of its natural gas, creating huge account surpluses, Iran uses almost all produced gas to satisfy the needs of its 77 million citizens. Natural gas was provided to Iranian people at highly subsidized prices, triggering overconsumption. (2) for now, absent tangible sanctions relief, officials developing South Pars must rely on domestic resources and Chinese firms. (3)

A great number of oil and gas resources, are in the maritime and land boundaries of two or more countries. This has led to development of an extensive amount of legal materials and rules that can be used for delimitation of shares or arrangement of joint efforts for exploration and exploitation of the resources. (4)

The entire seabed of the Persian Gulf is continental shelf and due to the rich resources, it has to be carefully delimited. Iran has concluded a delimitation agreement with Qatar in 1969 and the agreement concerning the boundary line dividing the continental shelf between Iran and Qatar, dated 20 September 1969, provides that: “If any single geological petroleum structure or petroleum field, or any single geological structure or field of any other mineral deposit, extends across the Boundary line set out in article one of this Agreement and the part of such structure or field which is situated on one side of that Boundary line could be exploited wholly or in part by directional drilling from the other side of the Boundary line, then: (a) No well shall be drilled on either side of the Boundary line as set out in article one so that any producing section thereof is less than 125 meters from the said Boundary line, except by mutual agreement between the two Governments, (b) Both Governments shall endeavor to reach agreement as to the manner in which the operations on both sides of the Boundary line could be coordinated or unitized.” (5)

As it is evident from the text of this agreement, the cooperation of two countries on the joint fields is referred to a separate agreement that the two sides will try to reach. Up to now, there have been some coordination efforts by the two sides, but no such agreement has been concluded. Therefore, at the moment, Iran and Qatar follow basically their own separate plans for exploiting the gas resources of this joint field.

Also, Article 142 of the UN Convention on the Law of the Sea (1982 UNCLOS), provides that “Activities in the Area, with respect to resource deposits in the Area which lie across limits of national jurisdiction, shall be conducted with due regard to the rights and legitimate interests of any coastal State across whose jurisdiction such deposits lie.” This is calling for attention of countries to the interests of others during actions that are related to the seabed when the resources are across the limits of national jurisdiction lines, according to the related rules. In the South Pars also, an arrangement for joint work is the best way but it is blocked by the sanctions against Iran.

So the answer to the first question is yes. Although Qatari side of the joint deposit is already two times the Iranian part, it is a fact that development of resources in the Qatari part of the deposit pushes a part of Iran’s share to the other side. Now, it is time to review the second question: is Qatar under serious and legally binding obligations to cooperate with Iran in using this joint deposit and is Qatar in violation of international law using the Qatari side of this joint deposit without paying attention to what is happening in the Iranian side?

The general principle of cooperation between states sharing natural resources is enshrined in some UNGA resolutions. On December 13, 1973, UNGA adopted Resolution 3129 on "co-operation in the field of the environment concerning natural resources shared by two or more States." It drew attention to the need to establish "adequate international standards for the conservation and harmonious exploitation of natural resources common to two or more States," with such cooperation being developed "on the basis of a system of information and prior consultation...." This was supported by Article 3 of the 1974 Charter of Economic Rights and Duties of States, Resolution 3281, which provides that: "In the exploitation of natural resources shared by two or more countries, each State must co-operate on the basis of a system of information and prior consultations in order to achieve optimum use of such resources without causing damage to the legitimate interest of others."

The general obligation to cooperate is stressed in the 1982 UNCLOS. In a reference to joint development within the continental shelf and EEZs, the Convention sets forth "the States concerned, in a spirit of understanding and co-operation shall make every effort to enter into provisional arrangements of a practical nature and, during this transitional period not to jeopardize or hamper the reaching of the final agreement. Such arrangements shall be without prejudice to the final delimitation." (6)

Article 123 of UNCLOS indicates: "States bordering an enclosed or semi-enclosed sea (the Persian Gulf is a clear case at hand) should co-operate with each other in the exercise of their rights and in the performance of their duties under this Convention." In the conservation and management of marine natural resources, the principle of regional cooperation with respect to semi-enclosed seas can be regarded as a "progressive development towards fulfilling the general requirement to cooperate." (7)

Qatar, using the exclusive technology of the LNG (liquefied natural gas), is a major exporter of the LNG. Iran, although it has the second biggest reserves of natural gas in the world, due to many problems (especially the need for investment, technology and at the same time the international sanctions due to the nuclear program of Iran) is not an exporting gas in a meaningful way at the moment. Participation of Iran in plans like Nabucco is largely dependent on the political issues, especially the fate of the Iran-US relations.

Although Europe is hopeful to change its level of dependence on the Russians for energy, until such time that the problems of Iran with the West, especially the US, on the various issues (such as the nuclear case of Iran, the support of terrorism by Iran and the regional ambitions of Iran) are settled, there is no prospect for progress in this line. The obstacles for the support of Iran’s gas are hurting Iran and the West together. The future negotiations between Iran and the US should open a special account for the issues related to gas. As far as gas is concerned, Iran can benefit in a major way by solving its problems with the West.

Conclusions:

1- Qatar owns the bigger part of the joint gas field of South Pars/Northern Dom

2- Delays and lower production in Iranian side due to sanctions is resulting in migration of gas to the Qatari part and a loss for Iran.

3- There is no mechanism to stop exploitation of the Iranian side by Qatar.

4- Qatar has succeeded to get the US and South Korean technology for LNG and having this is very advantageous for it. Even the Russians do not have and are desperately in search of this technology.

5 - There is no contractual obligation for cooperation of Qatar with Iran regarding exploitation of South Pars.

6- There is a set of rules and motives that Qatar should help Iran in development of South Pars.

7- Both Qatar and Iran, being Islamic countries, should observe the general Islamic principle of “La-Zarar” (No Loss) and refrain from entering into activities that result in the loss to the other side.

8- If Iran was a really powerful and influential country in the region, it would not be the case that Qatar uses the resources connected to the Iranian share and not care about what happens to the share of Iranians.

9- This is another example of losses inflicted upon the nation of Iran due to the policies of the Islamic regime in Iran that are not based on the national interests. Iran, under the sanctions from the international community due to an unnecessary nuclear program, is suffering major and long-term losses in the South Pars.

10 - Iranian politicians have claimed many times that Iran’s international isolation and the economic sanctions-including those imposed by the UN Security Council-have not hurt the country seriously, and they insist on continuing the nuclear program at all costs. In reality, however, Iran’s oil and gas industry (the country’s main source of income) have suffered and will suffer further. The projected construction of oil and gas pipelines over the next 25 to 50 years all bypass Iranian territory and Iran will lose the transit fees, jobs, investment and prestige that accompany such projects.

References:

(1) wikipedia.org

(2) www.bqdoha.com

(3) oilandmoney.net

(4) archive.unu.edu/

(5) www.un.org

(6) and (7) www.thefreelibrary.com

 

... Payvand News - 06/19/14 ... --



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