2.1 Carbon Capture and Storage – Generally

CCS is a recognized technology for mitigating greenhouse gas (GHG) emissions, and, in particular CO₂.¹³ CCS involves the capture of CO₂ at large final emitters (LFEs),¹⁴ the compression and transportation of the CO₂ and its injection under pressure into suitable geological formations.¹⁵ The main targets are depleted oil and gas reservoirs and saline aquifers; the latter are much more significant in terms of volume. Two important examples of this are the Sleipner and Snøhvit projects on the Norwegian continental shelf. Sleipner commenced operations in 1996 and Snøhvit in 2008.¹⁶ Both inject CO₂ into saline formations.

Injection sites may be onshore or offshore (as above).¹⁷ There are positive and negative aspects associated with selecting an offshore disposal site. Positive aspects include the following: sediments of continental shelves frequently contain large volumes of high quality storage; in many cases prior oil and gas exploration on shelves provides a good geological understanding of the offshore; there is typically a single owner (the state) and no severance of surface and mineral titles; there is minimal conflict with freshwater aquifers (a major potential concern with onshore sites); the absence of resident populations and communities; there is frequently an existing pipeline and production\injection infrastructure; likely fewer wells offshore than onshore to serve as possible pathways to surface; it may be easier and cheaper to apply monitoring techniques and seismic imaging offshore.¹⁸ In addition, it may simply be the case that a state has no suitable onshore sites. The principal disadvantages of offshore sites are the elevated costs and risks of offshore operations as well as concerns for the marine environment.¹⁹ A recent report (2013) by the International Energy Agency concluded that CO₂ storage is not likely to take place in the near future at onshore locations in the five countries surrounding the North Sea and that the North Sea is a much more promising option both for those countries ‘and indeed for many other nearby European countries.’²⁰

Injection sites should be carefully characterized and located so as to ensure adequate and efficient storage capacity²¹ as well as geological containment with appropriate trapping mechanisms.²² Possible pathways to the surface (or sources of potable water) should be assessed, including natural fault lines and existing wells. While disposal into a depleted oil and gas reservoir involves injection into an underpressured formation (because of past production) injection into a saline formation will occur at natural formation pressure. Thus, the CO₂ will need to be injected ‘at pressure higher than the natural formation pressures to be able to displace resident brines.’²³ Upon injection the CO₂ will migrate within the target formation as a plume of CO₂. The CO₂ will be buoyant relative to the brine in the reservoir and will thus rise and spread laterally when trapped under cap-rock formations.²⁴ Injection will also elevate pressure conditions within the reservoir. The pressure effect of injection will initially be localized at the injection site but the resulting pressure front will extend beyond the actual CO₂ plume (in some cases as far as 100 km²⁵) and slowly dissipate throughout the target formation. Once injection comes to an end, the CO₂ plume may continue to migrate within the target formation moving upwards and laterally (because of the buoyancy of the plume).²⁶ Migration will continue at a slow rate for centuries.

It is important to keep in mind the industrial scale of operations that will be required if CCS is to make a significant contribution to the mitigation of GHG emissions. Birkholzer et al provide a useful example noting that a 1000 MW power plant (enough electricity for one million people) will provide enough CO₂ over the life of the plant to create a subsurface CO₂ plume with linear dimensions of 10 km with pressure plume extending over 100 km.²⁷ As a result: ‘In a future world with CCS being a fully employed technology, sedimentary basins with interconnected reservoirs might host multiple storage sites in which case pressure interference could be expected between individual projects.’²⁸

The precise implications of the pressure changes in a formation as a result of injection will depend on the type of formation or ‘storage system’²⁹ Open systems are likely the most desirable for large scale storage since they provide opportunities for pressure dissipation. Elevated pressures in a closed system or at the point of injection may impair cap rock integrity. It may be necessary for projects to adopt pressure management techniques to respond to this problem.³⁰

The principal environmental concerns associated with CO₂ storage in saline aquifers, in addition to leakage to surface, include the migration of displaced brines causing potable groundwater contamination, not simply as a result of elevated salinity but also because brines may have elevated concentrations of heavy metals and natural radioactive materials.³¹ This is far less likely to be a concern for ocean storage sites because there will generally be no potable groundwater sources that are at risk of contamination.

In addition it may also be necessary to assess resource interactions i.e. the competing uses of available geological storage space and the implications of one resource use for others. These implications may be positive or negative.³²

2.2 CO₂ Storage and Enhanced Oil Recovery

Enhanced oil recovery using carbon dioxide (CO₂\EOR)³³ is a tertiary recovery technique for enhancing recovery of petroleum from some reservoir types.³⁴ Primary production (using the original pressure conditions in the reservoir) may result in the recovery of between 10 and 20% of the original oil in place in the reservoir (OOIP).³⁵ Waterflooding operations and other secondary recovery techniques may double the recovery rate. CO₂\EOR operations may allow the recovery of an incremental 5–15% of the OOIP and in some cases as much as an additional 25–40%. CO₂\EOR operations involve the injection of liquid or supercritical CO₂ into the producing formation where the CO₂ interacts with the oil remaining in the pores of the formation. Marston et al describe the process as follows:³⁶

… the dense-phase CO₂ becomes miscible with the oil (i.e. the two substances will flow together as if they were a single fluid). In the process, the oil droplets swell and the surface tension that held the oil droplets attached to the pore surfaces is reduced. This allows the oil to become mobile.

The combined fluids (oil, CO₂ and brine) flow towards the low pressure point of the producing well. As the substances are produced any entrained CO₂ returns to the gaseous phase. The fluids and gases are separated and collected at the surface. Captured CO₂ is dehydrated, pressurized and re-injected. The operator has an incentive to engage in re-capture because the costs of re-capture are lower than the costs of acquiring supplementary sources of CO₂ with which to continue the EOR operation. Not all of the CO₂ injected will be produced with the oil, some will remain permanently contained within the reservoir. Industry experience with EOR projects suggests that up to 90–95% of purchased CO₂ will eventually become ‘incidentally trapped’ (i.e. stored) within the reservoir over the life of the project.³⁷

While CO₂\EOR operations may be relatively small scale, they offer some significant advantages when compared with CCS. The most important of which is that the incremental oil recovery provides a source of revenue to offset the expenses involved in capturing the CO₂.³⁸

There may also be other non-carbon advantages for CO₂\EOR operations. For example, the use of CO₂\EOR in the North Sea should extend the producing lives of North Sea reservoirs and the basin as a whole thereby reducing the need for imports and maintaining employment.³⁹

Despite those prospects, there are very few offshore CO₂\EOR projects due to the limited availability of CO₂ and the cost of converting existing infrastructure.⁴⁰

2.3 Transboundary Implications of Saline Disposal and CO₂\EOR Projects

It is apparent that the geographical implications of a saline disposal project will be more widespread and cover much larger areas than those associated with CO₂\EOR projects. This is because conventional oil and gas reservoirs are always closed systems⁴¹ and the individual reservoirs will be much smaller than the regional scale, open geological formations that will likely be the target of saline disposal projects. A saline disposal project may raise transboundary concerns in one of two ways. First and most directly, the CO₂ plume itself may migrate across the boundary. Second, and more indirectly, the pressure front associated with injection into a formation on one side of the boundary may extend across the boundary even through the plume itself may never do so. Increased formation pressure may make these adjacent areas less useful for other CCS operations since pressure conditions will affect the injectivity of the formation. Brine migration induced as a result of the pressurization may be of concern for groundwater resources if present. CCS projects may have implications for other adjacent resource activities as noted above.⁴²

CO₂\EOR projects on the other hand are unlikely to pose new transboundary problems for two reasons. First, since EOR operations occur in contained reservoirs that are well characterized there are less likely to be regional scale pressure implications.⁴³ Thus, unless the reservoir itself crosses the boundary there are unlikely to be transboundary effects. Second, if the reservoir does cross the boundary it will already be subject to some form of agreement whether a project specific treaty and unitization agreement or some form of framework or unitization agreement.⁴⁴ At most the question becomes one of asking how those arrangements might accommodate CO₂\EOR operations.

3.1 The General Duty to Co-operate

International law recognizes a general obligation to cooperate in relation to the use of shared resources.⁵⁰ Shared geological structures which can be used for storage or disposal purposes are examples of shared resources.

The ILC has endeavored to codify the law pertaining to a number of shared resources, specifically the non-navigational uses of international watercourses⁵¹ and shared aquifers. The Commission’s Draft articles on the Law of Transboundary Aquifers, with commentaries were adopted on second reading in 2008 (hereafter Draft Articles).⁵² While these articles are principally concerned with the use of aquifers for potable drinking water a number of references in the articles and the commentary suggest that the ILC contemplated that the articles should also speak to the use of aquifers for disposal purposes including for geological sequestration of CO_2.⁵³ However, the commentary to the Draft Articles also makes it clear that the Commission concluded that the Articles should not apply to aquifers underlying the continental shelf on the grounds that ‘Submarine geological formations under the continental shelf do not hold freshwater and accordingly such formations and water therein fall outside the scope of the draft articles.’⁵⁴ While the Commission seems inconsistent with respect to the applicability of the articles to the use of aquifers for sequestration or disposal purposes the principles underlying these articles should still inform how we might think about the duty to cooperate in the context of shared geological formations in marine areas.⁵⁵

The duties associated with the general obligation to cooperate⁵⁶ include both procedural and substantive duties. Procedural duties include the duty to exchange information about the resource,⁵⁷ the duty to notify as to proposed uses of the shared resource which may affect other parties,⁵⁸ the duty to conduct an environmental assessment to the extent that transboundary impacts are anticipated,⁵⁹ the duty to engage in consultations as to any concerns that are identified and if necessary to negotiate (or engage in other peaceful means of dispute resolution) to resolve any outstanding issues.⁶⁰ There may also be a duty to monitor the use and status of the shared resource and to share the resulting information.⁶¹ The substantive duties include a duty of equitable and reasonable utilization of the shared resource,⁶² the duty to protect the environment,⁶³ and the duty not to cause significant harm to the shared resource or the interests of other states in that resource.⁶⁴ What amounts to harm, and indeed to significant harm, must be contextualized and to some extent may depend upon the uses that others may be making of that resource. Thus, disposal of CO₂ into an aquifer may be a reasonable use of that aquifer if it is saline; it is likely not a reasonable use if the aquifer contains potable groundwater and certainly not if the aquifer is being used as a potable water source by another aquifer state.

The duty to cooperate with respect to shared resources may also result in the aquifer states agreeing to create appropriate institutions. Such institutions have proven to be particularly important in relation to international watercourses. The draft articles on aquifers refer inter alia, to joint mechanisms of cooperation, appropriate bilateral and regional agreements, joint monitoring activities, and a joint management mechanism.⁶⁵

In addition to the general duties to cooperate with respect to shared resources as well as the more specific rules in relation to transboundary aquifers, UNCLOS also contains a number of provisions enjoining the parties to cooperate including the duty to cooperate in relation to the conservation and management of living resources, the duty to co-operate with respect to enclosed and semi-enclosed seas and the duty to cooperate with respect to the protection of the marine environment.⁶⁶ There are rather more specific provisions requiring the relevant parties to pursue provisional arrangements in areas of overlapping maritime entitlements.⁶⁷ These provisions are the subject of more detailed examination below in section 3.3.

3.2 The Treatment of Sub-Seabed Disposal of CO₂ in Shared Formations in the Work of Protocol to the London Dumping Convention

The one treaty forum that has addressed storage in shared geological structures in marine areas is the Protocol to the London Dumping Convention (PLDC).⁶⁸ It will be recalled that the parties to the PLDC agreed to amend that instrument to permit geological sequestration of pure streams of CO₂.⁶⁹ The parties also agreed that the injection of CO₂ for enhanced oil recovery purposes does not engage the Protocol.⁷⁰ That amendment and the understanding with respect to CO₂ for EOR purposes did not resolve all issues relating to the potential use of the seabed for geological sequestration because Article 6 of the PLDC prohibits the export of wastes. The Parties identified two potential implications of this prohibition for geological sequestration of CO₂: export and migration (or ‘migration-as-export’). ‘Export’ refers to the export of CO₂ from one country for disposal in the jurisdiction of another country. It was agreed that this activity was subject to the prohibition of Article 6, that the problem could not be resolved by way of an agreed interpretation, and that it could only be resolved by means of an amendment. An amendment to create an exception for the export of CO₂ for geological sequestration was adopted in 2009 but is still a long way from entering into force.⁷¹

The migration-as-export concern is particularly relevant for this chapter since it concerns the scenario in which CO₂ is injected into a shared geological structure in State A and the CO₂ plume migrates (either intentionally or unintentionally) from State A to State B (or to an area beyond national jurisdiction). The Parties concluded that such a migration does not constitute an export within the meaning of Article 6 (and adopted a resolution to that effect).⁷² It is therefore a form of disposal which is permitted under the newly adopted amendment. However, the parties considered that it required special consideration under the terms of the Specific Guidelines for the Assessment of Carbon Dioxide for Disposal into Sub-seabed Geological Formations. The Guidelines were first adopted in 2007; the amended version which addresses the migration scenario was adopted in November 2012.⁷³ The Specific Guidelines (2012) address geological waste disposal of CO₂ generally but also contain a number of more specific provisions dealing with disposal into geological formations where there is potential for transboundary movement of injected CO₂. The general provisions address such matters as waste prevention audits, consideration of waste management options, the chemical and physical properties of the waste stream (i.e. proper characterization of the waste stream), an action list (a screening tool to determine whether a material is considered acceptable for dumping), site selection and characterization, assessment of potential effects (a risk assessment and an impact hypothesis), monitoring and risk management, and permit and permit conditions.⁷⁴

The main provision dealing with disposal into geological formations where there is potential for transboundary movement of injected CO₂ is an overarching provision which precedes the general provisions outlined above and provides as follows:⁷⁵

[A] In the case of [1] transboundary sub-seabed geological formations that could be used by more than one country or [2] where sub-seabed geological formations are located in areas where there is the potential for transboundary movement of CO₂ streams after injection [3] the Contracting Party where the injection occurs should be responsible for the implementation of these Specific Guidelines. [B] Consent should be sought for the use of the sub-seabed geological formation from all countries with jurisdiction over this sub-seabed geological formation, without prejudice to international law including as reflected in the relevant provisions of UNCLOS. [C] The Contracting Party where the injection occurs should cooperate with other relevant Contracting Parties, other States and other relevant entities, to ensure adequate sharing of information as needed and in accordance with international law, including by way of arrangement or agreement to ensure that these Specific Guidelines are implemented effectively.

There are a number of key ideas embedded in this paragraph.

First, sentence [A] serves to both identify the circumstances under which the clause shall apply but also to allocate compliance responsibility. Thus, the Guidelines apply where, [A1] a sub-seabed geological formation could be used by more than one country, or [A2] there is a formation which is located in an area where there is potential for transboundary migration post-injection. This first sentence establishes low alternative thresholds for its applicability. The first alternative, threshold [A1], is satisfied by the mere existence of a geological formation that could be used by more than one country. The second alternative, threshold [A2], is satisfied by the potential for transboundary migration. The allocation of compliance responsibility is dealt with in the last part of the first sentence [A3] which resolves that it is the State where the injection occurs that is responsible for the implementation of the Guidelines.

Second, sentence [B] establishes the threshold for proceeding. This requires that consent should be sought from all countries with jurisdiction over the shared sub-seabed geological formation. This requirement is said to be without prejudice to international law generally and UNCLOS specifically. The consent requirement is broadly framed. It is not confined to seeking to obtain consent from states to which the plume may migrate, or states that may suffer a (significant) adverse effect from use of the shared formation; it extends to any state with whom the formation may be shared. The consent is framed in the passive voice. It does not specify that the consent is to be obtained by the Contracting Party (rather than, say, the operator of the project) but the section as a whole is very state-oriented and thus it seems reasonable to think that consent should be obtained at the state to state level. The clause does not prescribe the form that the consent must take, such as whether it might take the form of a treaty or an agreement between the respective regulatory authorities of the parties, or an exchange of diplomatic notes. It is difficult to divine the precise purpose of the ‘without prejudice’ clause but presumably it is intended to indicate that any consent that is obtained may deal with matters as between the parties to the consent but cannot discharge either party of obligations that either may owe to others, or to the international community more generally. Finally, the clause stipulates that ‘consent should be sought’. The clause does not use the mandatory ‘shall’ but the softer imperative ‘should’; nor does the clause stipulate the consequences of failing to obtain the consent of all formation states and certainly does not use the formulation ‘should be sought and obtained’.

Third, in addition to the consents that ‘should be sought’, sentence [C] calls upon the Contracting Party where the injection is occurring, to cooperate with: (1) other relevant Contracting Parties, (2) other States, and (3) other relevant entities. It is evident that this obligation is not confined to formation states (or presumably this sentence would have used the same terminology as the consent clause) although one would think, given the scope of the consent clause, that a reservoir State would always qualify as a relevant Contracting Party or ‘other State’. It is not clear what the term ‘other relevant entities’ is designed to capture but presumably it might include global and regional treaty organizations such as the Protocol secretariat and conference of the parties, OSPAR, and, where relevant, a body like the EU. The cooperation is designed for two ends: (1) to ensure adequate sharing of information, and (2) to ensure that these Guidelines are implemented effectively. These objectives should be the measure of the information that must be shared which must also be ‘in accordance with international law’. One could anticipate that an exchange that is adequate to ensure effective implementation of these Guidelines will need to be both detailed and extensive and indeed address all of the topics covered by the substantive requirements of the Guidelines. The clause provides some guidance as to the means of effecting cooperation insofar as it references ‘arrangement or agreement’ but clearly these are just possible modes of attaining the objective.

The Guidelines contain two other references to transboundary movement both in the section of the Guidelines dealing with the characterization of the sub-seabed geological formation.⁷⁶ Thus, section 6.2 instructs that in selecting a site for geological storage of CO₂ the geological assessment should take account of potential migration and leakage pathways over time (including transboundary movement) and potential effects to the marine environment of leakage of CO₂. A second reference in the section largely follows part of the previously quoted and discussed section 1.10.⁷⁷

While Dixon et al take the view that Guidelines under the Protocol are for guidance only, and not legally binding (unlike decisions adopted under OSPAR), these Guidelines offer the most detailed prescriptions for sub-seabed disposal of CO₂ into shared geological formations.⁷⁸ It is also possible that the Guidelines could attain additional normative weight through referential incorporation in other instruments which might, for example, require states to apply generally accepted standards or guidelines.⁷⁹

3.3 The Law Governing Seabed Operations in Areas of Overlapping Maritime Claims Pending Delimitation

There are overlapping maritime claims in many areas of the world. These may include overlapping claims to a territorial sea, an EEZ and a continental shelf. Whereas Article 15 of UNCLOS establishes a default equidistance entitlement in the case of overlapping claims to a full 12 nm territorial sea,⁸⁰ there is no default entitlement rule in the case of overlapping EEZs and continental shelves, only a duty to negotiate a delimitation by agreement with a view to reaching an equitable solution, failing which the Parties shall resort to dispute settlement under Part XV.⁸¹ Part XV (Article 298(1)(a)) permits a state to opt out of binding compulsory dispute settlement with respect to Articles 15, 74 and 83 but in return such a party must accept the possibility of compulsory, but non-binding, conciliation.⁸² This section focuses on overlapping EEZ and continental shelf claims. Where the shelf and EEZ have been delimited, the coastal state’s rights are exclusive. Absent an agreed delimitation ‘no such exclusivity can exist’.⁸³

Articles 74 (EEZ) and 83 (continental shelf) impose procedural and substantive obligations on adjacent and opposite states pending agreement on delimitation.⁸⁴ In particular, common paragraph three provides that:⁸⁵

3. Pending agreement as provided for in paragraph 1, the States concerned, in a spirit of understanding and cooperation, 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.

This provision does not ‘limit de iure the powers of each State in a contested area … these powers thus remain’. Provided that the claim is a reasonable one powers ‘generally attributed to the coastal State by the relevant UNCLOS provisions’ may be exercised but the paragraph does impose ‘a double condition on the exercise of those rights.’⁸⁶

Rainer Lagoni has provided an authoritative account of the evolution of paragraph 3 of these two articles.⁸⁷ Lagoni recalls that the paragraph represented a compromise and indeed a compilation of two different ideas that had been introduced in proposed language for this article. On the one hand, those states committed to the preeminence of the median or equidistance line favoured a formulation that prohibited a state from extending its shelf or EEZ (or in some proposals engaging in any exploration or exploitation activities beyond the equidistance line) absent an agreement between the states concerned.⁸⁸ On the other hand, those states that favoured delimitation in accordance with equitable principles argued for a formulation that emphasized the importance of provisional arrangements.⁸⁹ As can be observed, the final text incorporated elements of both of these ideas insofar as it refers to both the importance of making provisional arrangements as well as the commitment not to do anything that would jeopardize or hamper conclusion of an agreement,⁹⁰ a point emphasized in the Award of the Arbitral Tribunal in Guyana v Suriname.⁹¹ That Award also emphasized that the purpose of paragraph 3 is to permit utilization of disputed areas pending delimitation, thereby avoiding the suspension of economic development.⁹² The history of this paragraph fully justifies Lagoni’s assertion that, at least at the time the paragraph was negotiated, it was ‘in no way a codification of customary international law but represents an example of its progressive development.’⁹³

Paragraph 3 was subject to detailed analysis in the Award in Guyana v Suriname and the Tribunal helpfully distinguished the two core and complementary obligations within the paragraph, first, the duty to use every effort to agree on provisional arrangements of a practical nature, and second, the duty not to hamper or jeopardise a final agreement.⁹⁴

4.1 Silence

The parties may elect to effect a delimitation without addressing the issue of shared geological formations at all. This gives rise to the question as to what the default rules would be in such a case, either with respect to petroleum operations or CO₂ storage and disposal operations. It is fairly clear that Article 74 and 83 UNCLOS and, in particular, common paragraph 3 are no longer relevant – they are spent. The subject matter of the two articles is that of delimitation. Once the parties have made their delimitation agreement(s), those agreements assume priority – at least with respect to the issue of delimitation.⁹⁹ Furthermore, paragraph 3 is certainly no longer applicable. After all, paragraph 3 commences with the words ‘Pending agreement’. The agreement that is referenced here is the agreement on delimitation referred to in paragraph 1. Thus, the twin obligations of that paragraph no longer apply. One should recall in particular that the duty ‘not to jeopardize or hamper’ is a duty not to jeopardize or hamper the reaching of a final agreement. The delimitation agreement is that final agreement. Lagoni agrees remarking at the end of a section headed ‘Application ratione temporis’ that ‘The obligation [to pursue good faith negotiations for a provisional agreement] ceases when the final delimitation agreement is reached.’¹⁰⁰

As a result, neither the two Articles, nor the interpretive case law, are directly applicable as treaty obligations post the conclusion of a delimitation agreement. However, the general duty to cooperate with respect to shared resources continues as does the parallel duty to cooperate as well as the general obligations under UNCLOS, as outlined above.¹⁰¹ In addition, a party to the PLDC will need to observe the relevant provisions of the Specific Guidelines to the extent that it is contemplating disposal operations in a shared geological structure.¹⁰²

4.2 The Basic Clause and Its Variants

Agreements delimiting the continental shelf and\or the EEZ frequently make provision for the discovery of hydrocarbon deposits that straddle the agreed delimitation line. An early and oft-cited example is the 1965 Agreement between the United Kingdom (UK) and Norway¹⁰³ which provides that:

If any single geological petroleum structure or petroleum field, or any single geological structure or field of any other mineral deposit, including sand or gravel, extends across the dividing line and the part of such structure or field which is situated on one side of the dividing line is exploitable, wholly or in part, from the other side of the dividing line, the Contracting Parties shall, in consultation with the licensees, if any, seek to reach agreement as to the manner in which the structure or field shall be most effectively exploited and the manner in which the proceeds deriving therefrom shall be apportioned.

In some cases the discovery of such straddling deposits and the resulting consultation has led to the conclusion of specific treaties elaborating on the rules for exploiting such a deposit, beginning with the Frigg Agreement in 1976.¹⁰⁴ These rules are typically based on the concept of unitization (which involves treating the entire pool as a single ownership unit)¹⁰⁵ with apportionment of costs and production based on the distribution of the underlying hydrocarbon reserves.¹⁰⁶ Project operations are governed by the terms of unitization and operating agreements concluded between the licensees on either side of the line, typically subject to the agreement or approval of both governments. The unit operator is appointed by agreement between the licensees subject again to the approval of the governments.¹⁰⁷

The question for present purposes is whether a clause such as that contained in the UK/Norway Agreement as well as the subsequent pool-specific development agreements should be read as extending to CCS operations and CO₂\EOR operations. It is perhaps easiest to begin with CO₂\EOR operations. These operations are strictly ancillary to the principal purpose of exploiting a hydrocarbon reservoir – they are designed to enhance production. It seems clear therefore that such operations would fall within the language of Article 3 of the Norway/UK Agreement. Such operations would also likely fall within the language of most pool-specific development agreements,¹⁰⁸ although the institution of such operations would likely require the consent of the two governments under the terms of these specific treaties.¹⁰⁹ Plans to commence CO₂\EOR operations may also lead to a restatement of recoverable reserves; however, all of these pool-specific development agreements provide for this eventuality and therefore would apply whether a request for a restatement is triggered by additional drilling which causes the licensees of the governments to revise their understanding of the parameters of the pool, or whether it is triggered by the introduction of EOR operations.¹¹⁰

But what is the position with respect to a shared saline formation? What is the position where a project in a conventional hydrocarbon reservoir moves from a CO₂\EOR operation to a pure disposal operation? And what is the position where a straddling reservoir has been abandoned and is now being considered for CCS purposes (the Frigg Gas field is a case in point).¹¹¹ The Norway\UK version of the straddling deposit clause addresses two subjects: (1) geological petroleum structures and petroleum fields; and, (2) single geological structures or fields for any other mineral deposit, including sand or gravel. Furthermore, the clause is concerned with the exploitation of these resources for commercial gain and presumably by means of extraction rather than exploitation by injection. There may be arguments both ways as to whether such clauses can be read as embracing the operations referred to above i.e. exploitation by injection of a saline reservoir, cross-over operations from EOR to pure disposal, and the use of abandoned petroleum reservoirs. Perhaps the arguments are strongest in relation to the use of abandoned petroleum reservoirs since CCS can be seen as the continued exploitation of such a reservoir. The arguments may be weaker with respect to a shared saline aquifer since it may be more difficult to describe such a structure as a ‘geological structure or field of any other [i.e. non-petroleum] mineral deposit’ (emphasis added).

The UK\Norway Agreement offers a relatively simple form of a straddling deposit clause. While delimitation agreements continue to be concluded with this type of clause, other agreements contain more sophisticated versions which might address such matters as the exchange of drilling information and perhaps dispute settlement.¹¹² In general, it seems fair to say that the more detailed the clause the more likely that it can be interpreted as referring only to hydrocarbon reservoirs and the exploitation of hydrocarbons. However, other forms of the clause use more general language that does not refer to hydrocarbon resources or petroleum reservoirs. For example, the France\Spain delimitation agreement of 1974 (which also creates a joint development zone (JDZ)) refers to the exploitation of a deposit of a natural resource.¹¹³ It does not seem unreasonable to think that injection of CO₂ into a shared saline aquifer might qualify as the exploitation of that shared resource. But equally, other similar clauses are explicitly confined to petroleum and\or natural gas¹¹⁴ or to the exploitation of deposits of mineral resources¹¹⁵ and would therefore likely not apply to operations in saline aquifers.

As for the field-specific unit operations agreements referred to above, it seems fairly clear that such agreements would not apply to either CO₂\EOR operations crossing over to pure disposal or to storage and disposal operations in an abandoned field (the Frigg situation). While such agreements may not terminate automatically with the cessation of production and abandonment,¹¹⁶ it seems clear that all these agreements are concerned with production of petroleum and not with pure CO₂ disposal operations and are therefore inapplicable.

In sum, the general conclusion is that while delimitation agreements that deal with straddling deposits as well as subsequent field-specific agreements will likely also cover CO₂\EOR operations, it is much more difficult to conclude that such agreements were intended to address the use of shared saline aquifers for CO₂ disposal purposes. More specific drafting directed at the used of shared geological structures for storage or disposal purposes would be more appropriate. A simple version of such clause might be as follows:

If any geological structure that has the potential to be used for geological storage or disposal purposes extends across the dividing line, and the part of such structure or field situated on one side of the dividing line is exploitable, wholly or in part, from the other side of the dividing line, the Contracting Parties shall, in consultation with the licensees, if any, seek to reach agreement as to the exploitation of that structure for storage or disposal purposes.

In addition, and in light of the discussion above of the London Protocol’s Sub-Seabed Geological Formations Guidelines (2012), contracting parties to the Protocol might wish to add further text such as the following: ‘Any such agreement should take account of any guidelines for the assessment of geological formations for storage or disposal purposes developed by any relevant international organization.’ The suggested language would be broad enough to embrace not only the work within the London Protocol but also any future work within OSPAR or perhaps work by the IPCC.

4.3 Framework Agreements

Framework agreements dealing with shared hydrocarbon resources are bilateral agreements which aim to provide a detailed framework for the treatment of straddling petroleum deposits thereby obviating the need to negotiate field specific treaties.¹¹⁷ While most such agreements are free-standing agreements (e.g. the UK\Norway Framework Agreement), in some cases the framework provisions may be included in or appended to a delimitation agreement. Such is the case, for example, with the Norway\Russia Barents Sea Treaty. While specific answers to the above questions will of necessity turn on their precise language, these agreements generally apply only to ‘petroleum activities’ or some such similar term¹¹⁸ or to hydrocarbon deposits.¹¹⁹ It follows from this that while such agreements will therefore cover CO₂\EOR operations¹²⁰ they will not cover cross-over operations, saline aquifer disposal activities or disposal activities into abandoned reservoirs, except perhaps where the CO₂ is derived from the processing of produced substances (as is the case for example with the Norwegian Sleipner and Snøhvit projects).¹²¹

In sum, such framework agreements would require comprehensive re-drafting to include pure CCS disposal operations. Alternatively, parties could negotiate a parallel framework agreement expressly addressing CCS operations in the full range of shared geological structures.

4.4 Joint Development Agreements

The literature refers to two main types of joint development agreements (JDAs).¹²² The first category comprises JDAs which are put in place pending agreement on delimitation (provisional arrangements¹²³) whereas the second category of JDA may be created as part of a delimitation agreement and is intended to be permanent. The distinction between these categories of agreement is likely of little significance for present purposes, since, as with the above arrangements, the question that concerns us is whether these agreements, whether temporary or permanent, whether associated with an agreement on delimitation or not, are intended to, or can be read to apply to, CCS related activities as well as petroleum activities.¹²⁴

While some of these agreements are expressly confined to petroleum or mineral extraction activities¹²⁵ most are broader in their application. For example, the JDZ established by the France\Spain agreement of 1974 refers more generally to the prospecting for, and exploitation of, the resources of the JDZ¹²⁶ while the 1979 Agreement between Malaysia and Thailand refers generally to the ‘exploration and exploitation of the non-living natural resources of the sea-bed and subsoil’ of the overlapping area of claims.¹²⁷ The treaty between Barbados and Guyana similarly applies to the ‘jurisdiction, control, management, development, exploration and exploitation of living and non-living resources, as well as all other rights and duties established in the [Law of the Sea] Convention’ within the Co-operation Zone.¹²⁸ The JDZ treaty between Nigeria and Sao Tome and Principe is also far-reaching.¹²⁹ This agreement applies to ‘development activities’ within the zone.¹³⁰ Such activities are defined as ‘any economic activity in or concerning the Zone, including petroleum activity, fishing activity, all other activities for the development or exploitation of other mineral or living resources of the Zone and all forms of exploration and research related to any of the foregoing.’ Furthermore, Article 32 provides that the Zone Plan (to be developed by the Joint Authority) may make provision for non-petroleum development activities within the Zone. Equally notable is the 2012 treaty between Mauritius and the Seychelles establishing the extended continental shelf beyond the respective EEZs of the two countries as a joint management area.¹³¹ Within that area, the Contracting Parties, through a Designated Authority, ‘shall jointly control, manage and facilitate the exploration of the continental shelf … and the conservation, development and exploitation of its natural resources’.¹³²

It follows from the above that while all of these agreements would cover CO₂\EOR operations many of these agreements are also broad enough to cover cross-over operations from CO₂\EOR to pure disposal operations in depleted reservoirs, disposal operations in a previously abandoned reservoir¹³³ as well as to pure disposal operations in a saline aquifer. This would no doubt require the joint authority (where provided for) to develop specific rules in relation to this activity.