Monday, May 22, 2006

The Maritime Boundary

Of late, I have come across the Oil and Gas blocks contentions between India and Bangladesh. The blocks which India put for auction in NEPL-VI, are actually overlapping Bangladesh blocks. The region is alleged to be 'overlapping' between India and Bangladesh EEZs. So, who's area is it?

Generally a state's EEZ extends to a distance of 200 nautical miles (370 km) out from its coast. But what happens when one country's 370kms go inside the other? According to the United Nations Convention on the Law of the Sea - Part V, any such disputes between any two countries should be resolved on the basis of equity and in the light of all the relevant circumstances, taking into account the respective importance of the interests involved to the parties as well as to the international community as a whole.

India & Bangladesh Maritime Boundary
According to the articles(first and second) published in The Daily Star, the Bangladesh govt. claims that anything falls under the 370km zone from their coast line, should be given as EEZ of Bangladesh. The argument considers Bangladesh as a geographically disadvantaged country because its 720-km coastal line is concave in shape. Also, Bangladesh must have an open wide front to the high seas in the Bay of Bengal. The Author quotes the historical judgement given by ICJ (International Court of Justice) in NORTH SEA CONTINENTAL SHELF CASE (1969) and said that Germany got the access to North Sea despite the equidistant line did not allow them to get so. The judges allowed Germany to be considered 'equitably', so that they also gets some EEZ across North Sea. Harun ur Rashid also added that equidistant method (suggested in Geneva Convention - article 6) should be considered only between opposite States, like India and Srilanka.

North Sea Continental Shelf Case

Point C marks the land boundary between the Netherlands and Germany. Point A marks the land boundary between Germany and Denmark. The line C-D-E-B-A is the approximate equidistance line.

India and Bangladesh started their bilateral talks way back in 1974, which was inconclusive. India was looking for equidistant border where Bangladesh was for equity based boundary. The same difference in arguments rendered Bangladesh-Myanmar talks inconclusive as well. But, India and Myanmar (opposite States) agrred upon equidistant boundary.

Maps : Indian/Myanmar claim

Maps : Bangladesh claim

My Findings
1) Even if a genuine passage is allowed for Bangladesh, the Oil blocks will be inside Indian area. I am assuming, that a passage is a passage - not a continuation of EEZ to bay of Bengal. In North Sea case, Germany was allowed a passage only.
2) There are other adjascent states who've done their maritime delimitation amicably in equidistance method. For exacmple - Albania & Italy and US and Mexico. The Geneva Convention in 1958 mentions that as a method to determine the maritime boundary.
3) The ICJ North Sea case judgement sets a lot of factors to be considered as benchmarks. Also, it noted that equidistant method can be bypassed only in case of "special circumstances". In those cases, if no concesus arises between the parties then
they were to be divided between the Parties in agreed proportions, or, failing agreement, equally, unless they decided on a régime of joint jurisdiction, user, or exploitation.
4) The Maritime Boundary case (ICJ, 2002) judgement dismissed Cameroon's claim to get more EEZ from Nigeria under 'equitable' adjustment.

The Arguments were like these :
The Court notes in this respect that Cameroon contends that the concavity of the Gulf of Guinea in general, and of Cameroon’s coastline in particular, creates a virtual enclavement of Cameroon, which constitutes a special circumstance to be taken into account in the delimitation process. Nigeria, for its part, argues that it is not for the Court to compensate Cameroon for any disadvantages suffered by it as a direct consequence of the geography of the area. It stresses that it is not the purpose of international law to refashion geography.
The judgement notes :
This method (equitable), which is very similar to the equidistance/special circumstances method applicable in delimitation of the territorial sea, involves first drawing an equidistance line, then considering whether there are factors calling for the adjustment or shifting of that line in order to achieve an "equitable result"....The Court’s jurisprudence shows that, in disputes relating to maritime delimitation, equity is not a method of delimitation, but solely an aim that should be borne in mind in effecting the delimitation....The Court finds that although it does not deny that the concavity of the coastline may be a circumstance relevant to delimitation, it nevertheless should stress that this can only be the case when such concavity lies within the area to be delimited. It notes that the sectors of coastline relevant to the present delimitation as determined above exhibit no particular concavity....Having further concluded that there were no other reasons that might have made an adjustment of the equidistance line necessary in order to achieve an equitable result, the Court decides that the equidistance line represents an equitable result for the delimitation of the area in respect of which it has jurisdiction to give a ruling.
Map of Cameroon EEZ by equidistance method
Map of Nigeria EEZ by equidistance method

Clearly, Bangladesh does not have concavity to the extent of Cameroon. Hence, getting favourable judgement from ICJ would be very difficult for them.
5) The outcome of a running case would be very interesting in this perspective. The case between Romania and Ukrine not only resembles India-Bangladesh case, but also has a high stake.

Basically, India or Bangladesh govt are not willing to claim their stakes before the stake is proved to be high. If at all Oil exists in those blocks, the countries may face each other in ICJ, very soon. The other option, i.e. joint exploration (as between Indonesia and Australia), is possibly not going to take place. Because, Bangladesh might once more come up with all bilateral issues to link with this one. For hostile neighbours, Court is the best place to solve disputes.

Sources : The following site shows a EEZs for various countries based on existing treaties or Equidistance line.

Friday, May 12, 2006

India to export oil?

Amidst the rising oil prices, it is interesting to note that India has a lot of oil-convertible reserves that can potentially be converted to commercial usage. The sources might not be commercially viable when the oil price was steady, but with a price tag of over $70 a barrel and immediate US conflict with Iran on cards, Indians might think twice.

The two major oil-convertible resources India has, are Coal and Oil-Shale. The former one is known to all, I'll discuss about the latter. Oil Shale is a rock containing significant proportions of organic carbon "Kerogen" which can be broken down by application of heat into smaller molecules to form a liquid similar to natural crude oil. It is mined and transported in a manner similar to coal and is being used on an industrial scale at present all over the world to be converted into oil. The oil shale reserves in Assam are estimated at 137 billion tonnes with a recovery factor of 20-35% and the crude oil potential is 14 billion tonnes. This can sustain production of 140 million tonnes of crude oil for 100 years. The United States Office of Naval Petroleum and Oil Shale Reserves estimates the world supply of oil shale at 1.6 trillion barrels of which 1–1.2 trillion barrels are in the United States.

However, during the oil crisis of the 1970s, people thought that oil supplies were peaking, expected oil prices to be around seventy dollars a barrel for some time to come, and invested huge amounts of money in refining oil shale - money that they lost. Because of the astronomical sums that were lost last time around there is considerable reluctance to invest in oil shale this time around. Investors are waiting to see if oil prices really will remain this high. Prices are rising because of increased demand in developing countries, particularly China. Will high prices result in the discovery of more oil, as happened in the seventies, or will alternatives to drilling for oil have to be developed? Investors, burnt badly in the 1980s for their enthusiasm of the seventies, are in no hurry to develop oil shale. Those who lost money then are inclined to believe that more oil will be found by and by. Some others are thinking of it once more, as reported by WorldOil.

The whole scenarion has been articulated in the article by Swaminathan Aiyar. He noted :
However, Assam and Arunachal Pradesh are blessed with ample water. A small dam on a minor tributary of the Brahmaputra could provide enough water, and generate hydel power too. Possibly the dam itself could be a rock-filled one built with spent shale. The first step needed is to appoint international consultants to assess the deposits and suggest technologies for extraction.Given the potential benefit, the risks are worthwhile.

Assam coal is, technically, a sort of solid petroleum deposit (it is a marine sediment like oil, not a carbonised forest like conventional coal). This makes it especially suitable for conversion to oil. Assam coal has much sulphur, so it is a high-pollution fuel for thermal power. But coal liquefaction yields ultra-clean oil, leaving behind sulphur as a by-product that can be used for fertiliser manufacture.

The other option, Coal, is also discussed in the article.
China is planning to set up at least four plants to convert coal to oil. The Shenhua Group is setting up a direct liquefaction plant in Inner Mongolia using IFP technology. China already plans to invest over $15 billion in extracting oil from coal. India has not even started thinking about this.
The Coal-to-Oil conversion is discussed in the blog of The Indic View. The comments were though not very encouraging. The techno-leader USA also might come into business with its' huge coal-reserves.

It is often said that India has all resources except the energy resources. But, after studying these, I conclude that we need to understand that there are a lot to come in energy market, and only a research oriented approach can take us to the place where a big country like India deserves to be.

The other conclusion might be a bitter truth. It's very difficult to dry out USA, even if the entire Gulf goes against them. It might lead Iran to think twice before they start talking about war and possible shortage of oil. If the gulf-oil is cut, it will probably strengthen the US grip on the world, because, it will then invest in these areas where they haven't done earlier.

Friday, May 05, 2006

Economies and Politics Around Us

Indian Economy
A reportcard of Indian infrastructure - Financial Times.
ADB says expects Indian economy to grow 7.5 pct - Reuters.
Malnutrition: India beats sub-Saharan Africa - Times of India.
Debt drives Indian farmers to suicide - BBC.

Transit issue through Bangladesh
Experts favour facility against package deal - The Daily Star
Transit and free trade with India - The Daily Star
The Transit discussion - Shamokal (Bengali)

India-Bangladesh border
The 150 yard boundary :
River erosion protection work remains suspended over Indian BSF protest : Bangladesh-web

The Nuke deal
India rejects proposal to amend N-deal : Khaleej Times

Freedom of Press index : 2006 : Reporters Without Borders

Monday, May 01, 2006

The progress of South Korea in last 50 years

If you think India is progressing at a very high rate, think twice. I have got the graph of how South Korea progressed in last 60 years. For a fact, South Korea is now the second richest (after Japan, ignoring HK and Singapore like countries) country in Asia, while it was only a South Asian compatriot in 50's.

I read one article on how Korea progressed between 1962 and 1989. At a first glance, I put the reasons at four dimensions :
1) Good governance, this includes strong focus in education and infrastructure.
2) Help from Japan and US
3) Focussing on technology for industrialization, like Japan
4) A few world-beater private companies

South Korea scaled 8% annually between 1962 to 1989, Per Capita GDP rose 60 times - from $87 to $4830. However, the gold rush in industrialization was not replicated in Agro sector, leaving a huge gap between the rich and poor.

I can see a clear similarity in 3 out of 4 sectors between India and Korea. I am not sure of good governance, but others I am confident. India is also growng at 8% per year for last few years. Let's hope we'll also be able to replicate the success Korea had.