Saturday, September 10, 2016

Update on Kenya and Somalia’s Maritime Dispute: Implications for Energy Companies

King & Spalding | Energy Law Exchange

Update on Kenya and Somalia’s Maritime Dispute:  Implications for Energy Companies 

Somalia has brought its long-simmering maritime dispute with Kenya to the International Court of Justice (the “ICJ”). The ICJ’s treatment of the case will have important repercussions not only for Somalia and Kenya (and possibly neighboring Tanzania), but also for energy companies interested in exploiting East Africa’s offshore resources.
Somalia first brought the dispute to the ICJ on August 14, 2014, when Somalia filed an application with the international court to establish a single maritime boundary between Somalia and Kenya in the Indian Ocean, “delimiting the territorial sea pursuant to the [United Nations Convention on the Law of the Sea (“UNCLOS”)] and customary international law.”[1]  According to Somalia, Kenya wants the maritime boundary between the two countries to extend as a straight line from the parties’ land boundary, along the parallel of latitude where the land boundary sits, through the territorial sea, Somalia’s proclaimed exclusive economic zone, and the continental shelf.[2]  Somalia argues that the straight line violates UNCLOS Article 7 and that  UNCLOS Article 15 instead requires the border between the territorial seas to be a median line and the border of the exclusive economic zone and continental shelf to be resolved in the three-step process laid out in Articles 74 and 83.[3]
On October 7, 2015, Kenya filed preliminary objections challenging the admissibility of Somalia’s application and the ICJ’s jurisdiction to hear the case.[4]  Kenya reportedly argues that the two countries’ April 7, 2009 Memorandum of Understanding requires them to resolve their dispute through the United Nations’ Commission on the Limits of the Continental Shelf (the “CLCS”), not the ICJ.[5]  On February 5, 2016, Somalia filed a response rejecting “Kenya’s bid for an out-of-court settlement” and proclaiming that it would “seek justice” only at the ICJ.[6]  With no further filings scheduled, the ICJ might rule on the preliminary objection later this year.
The ICJ’s resolution of the parties’ dispute will have ramifications for international energy companies that have contracted with Kenya to develop the disputed territory. In 2012, Kenya opened eight new offshore blocks for sale to corporations, including L-5, L-21, L-22, L-23, L-24, and L-25 within the disputed territory.[7]  As Somalia reports in its application:
Kenya awarded Block L-5 to the American company Anadarko Petroleum Corp. in 2010 (though subsequent reports appear to indicate that Anadarko gave up its interest in late 2012 or early 2013). Blocks L-21, L-23 and L-24—which lie entirely (in the case of L-21 and L-23) or predominantly (in the case of L-24) on the Somalia side of a provisional equidistance line—were awarded to the Italian company Eni S.p.A. in 2012.  Block L-22 was awarded to the French company Total S.A. the same year.[8]
Press reports confirm that, in 2012, Total S.A. entered into a production sharing contract with the Kenyan government to operate L-22 with a 100 percent interest and holds a 40 percent interest in the Anadarko-operated L-5.[9]  Somalia itself recently invited energy companies to contract to explore the disputed area.[10]  And, if the ICJ adopts Somalia’s position, Tanzania’s control over Blocks 10, 11, and 12—licensed to Shell and Dominion Energy—will come into question.[11]
The ICJ’s ultimate resolution of the case will undoubtedly influence the future of East Africa’s offshore development. Companies contracting with Kenya and Tanzania for offshore development—and companies considering such contracts with Somalia—should continue to monitor the ICJ’s handling of the dispute.

[1]               Maritime Delimitation in the Indian Ocean (Somalia v. Kenya), Application Instituting Proceedings (herein after “Application”) ¶ 2 (I.C.J. Oct. 24,2014).
[2]               Application ¶ 19.
[3]               Application ¶ 18.  Somalia also claims relief under customary international law, as well as the general international law of maritime delimitation as applied by the ICJ and other international tribunals. Id.
[4]               Maritime Delimitation in the Indian Ocean (Somalia v. Kenya), Order of 9 October 2015 (I.C.J. Oct. 9, 2015).
[5]               Aggrey Mutambo, Kenya Objects to Coastal Boundary Case Filed By Somalia At the ICJ, Daily Nation, Oct. 7, 2015.
[6]               Maritime Delimitation in the Indian Ocean (Somalia v. Kenya), Order of 9 October 2015 (I.C.J. Oct. 9, 2015).
[7]               Somalia Takes Kenya to U.N. Court in Oil Rights Row, Reuters, Aug. 29, 2014, (last visited on Feb. 26, 2006).
[8]               Application ¶ 26.
[9]               Alan Petzet, Kenya: Total Awarded Lamu Deepwater License, Oil & Gas J., June 27, 2012, (last visited on Feb. 26, 2006).
[10]             Somalia Invites Energy Companies to Explore for Oil, BBC, Dec. 8, 2014, (last visited on Feb. 26, 2006).
[11]             Opinion: Kenya Somalia Maritime Border Dispute Could Throw Whole Region Into Dispute, Oil News Kenya, Sept. 30, 2014, (last visited on Feb. 26, 2006).

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