Large oilfields often don’t fall neatly within national boundaries. Intent on securing underground or undersea reserves, nations contest territorial claims.

China battles Japan for the Diaoyu/Senkakku Islands and ASEAN members for large sections of the South China Sea. Settling disputes quickly is in the interest of all claimants, particularly those with less technological expertise, suggests Will Hickey of SolBridge University. Rapid drilling can cause oil to migrate within a reserve, and horizontal drilling for several kilometers is also possible.

SouthSea2SM2

Countries with sophisticated technology collect product more quickly. Hickey urges countries to rely on unitization – devising agreements to divide shares, map boundaries, administer operations and collect revenues. “Unitization is usually undertaken to achieve the most efficient and economical exploitation of reserves to benefit all parties,” he explains. Surface boundaries are left intact, thus eliminating the contentious issue of sovereignty. Hickey lists several models of unitization, including a partnerships between the US and Mexico. Of course, the devil is in details, and the stronger contestants have least incentive to compromise or share. – YaleGlobal

via East Asia: Stop Squabbling, Start Drilling.

About the author

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign Up for Our Newsletter

Get notified of our weekly selection of news

You May Also Like

China allows resumption of group travel to Thailand

In 2019, Thailand welcomed 11.5 million Chinese visitors out of a total of 39 million international arrivals, of which about 4.3 million were from group travel.

Why China isn’t about to save Thailand’s economy yet

Analysts believe that while China’s reopening may help Thailand’s economy expand, it won’t be enough to return growth to pre-pandemic levels just soon.

Singapore remains the most liveable location in the world

Tightened Covid-19 policies in Hong Kong and mainland Chinese locations have contributed to a fall in their rankings, while locations in Japan and Australia dominate the top 10 most liveable locations.