Ed Barton, LLM, CPA, CFA

International Legal Issues for Offshore Energy Resources

Legal Regime of the Continental Shelf

From the 1945 proclamation of Harry S Truman that the United States had exclusive control over the natural resources on the continental shelf, the general bent of international law supported this approach. The 1958 Convention on the Continental Shelf effectively used a depth of 200 meters to define the shelf area. UNCLOS largely superseded this 1958 Convention.

UNCLOS adopted legal criterion setting the continental shelf limits to 200 nautical miles regardless of whether the continental margin extends that far, thus linking this seabed to the EEZ. UNCLOS allows coastal states sovereignty over living and non-living resources on the seabed, subsoil, and subjacent waters.

Beyond the 200 nautical mile limit, the physical presence of a continental shelf is necessary to exercise resource rights, extending to up to 350 nautical miles. UNCLOS established a Commission on the Limits of the Continental Shelf for resolution and determination of official control beyond the 200 nm limit.

Coastal states have the right to explore and exploit resources on the continental shelf. UNCLOS also does not require coastal states to adopt conservation management measures for resources on the continental shelf. The following rights are given to coastal and flag states under UNCLOS:

  • Drilling
  • Installations and Structures
  • Submarine Cables and Pipelines
  • Abandonment

The Deep Seabed (the “Area”)

The deep seabed, subsoil, and ocean floor beyond national jurisdiction is known as the Area under UNCLOS and is considered the common heritage of humankind. That means the deep-seabed energy resources belong to the international community and are governed by the International Seabed Authority (ISBA).

The use of these resources must balance the interest of the developed states, who can exploit the seabed with developing states in sharing the proceeds of the exploitation of mineral resources in the Area. UNCLOS does not specify how these proceeds should be shared, and the ISBA generally handles this.

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