Regional Cooperation: A New Legal Approach for Managing Common Resources of Oil and Gas in Persian Gulf

Abstract

At present, common resources of oil and gas in different regions of the world do not have a similar legal pattern. Regarding political, economic and geopolitical situations and also historical facts in different regions, there are different legal regimes on common sources. Mainly, three legal mechanisms are identified in this regard. The first legal pattern known as "no scaling" is applicable for common sources which are within the national sovereignty of a country and owned by some private companies; of which, a distinguished sample is common sources of USA. This pattern has two major principles; one of them is Surveillance Management and another one is Cooperation in exploiting sources. The latter legal patterns called as "Unitization" is specified for resources within the national sovereignty of two or more independent allies. A distinguished sample of this pattern is the common resources of North Atlantic Sea which owned by England and Norway. In this legal pattern, after discovery of the sources, the two parties apply the Unitization Principle and determine technical and legal prerequisites; thereby, all development and exploitation actions are performed uniquely by one or more specialized companies. The third mechanism in fact is not a legal pattern. Actually, not cooperating in development and exploitation of common sources is the main characteristic of the third mechanism. A distinguished sample of this pattern is management of common resources in Persian Gulf. In this mechanism, both Surveillance management and cooperation principles are neglected. Each of interested parties pursue their own goal of maximizing exploitation and their own profit without considering other parties' benefits and win-win approach. Although the most expanded volume of common sources of oil and gas is located in Persian Gulf, there is no proper legal pattern for exploitation and management of these resources. Moreover, efforts like passing bilateral agreements were not adequate for enacting a proper legal pattern in this geopolitically-strategic region of the world. Applying successful experiments in the world, especially in the field of cooperation and Surveillance Production, with investigating Strengths, Weaknesses, Opportunities and Threatens, the present research aims to present a new approach for determining legal pattern for common sources in Persian Gulf. With recognizing the role of applicable bilateral agreements, the main characteristic of this approach is multilateral agreement constituting regional cooperation. Based on the approach presented by this paper, such multilateral cooperation would be managed by a legal body in which all countries owning common resources in Persian Gulf and also OPEC and GECF will collaborate. The community constituted according to the new approach will constitute principles governing production and exploitation of common resources in Persian Gulf. This regional cooperation will handle environmental challenges and also transportation of products from this region in a win-win approach; besides developing Surveillance production and conservation of resources.