Where would the North Sea boundary lie?
Scottish and English law have always remained separate and two maritime boundaries already exist. The Scottish Adjacent Waters Boundary Order 1999[i] is a diagonal median line whilst the “Scottish Area” (Civil and Criminal) Jurisdiction Orders 1987[ii] is a horizontal line extending from the land border at Berwick-upon-Tweed. (The latter is slightly more favourable to Scotland). Just 2% of UKCS reserves are bounded by these possible alternatives and Scotland would gain at least 85%.
From a purely oil perspective, therefore, early agreement of issues is more important than the precise boundary location. (It’s worth noting, however, that other factors are also relevant to this debate e.g. renewable energy installations, fisheries, defence.) Fields straddling the Scotland-rUK boundary would require unitisation agreements (similar to existing UK-Norway arrangements).[iii] Scottish fields with a rUK landfall (e.g. those producing to the CATS pipeline which ends on Teesside, England)[iv] also require new treaties.[v] A much more complex alternative (to be avoided) would be to designate any disputed Scotland-rUK maritime zone as a Joint Development Area (JDA). JDAs have been employed between such states as Australia-East Timor[vi], Malaysia-Thailand[vii] and Nigeria-São Tome & Principe[viii] with varying degrees of success. States which fail to agree upon maritime boundaries face lengthy proceedings at the International Court of Justice (ICJ)[ix] which potentially hampers further offshore development for all parties.
Much of UKCS reserves lie closer to the Northern Isles (Orkney and Shetland) than to mainland Scotland. Noting their Scandinavian history and outlook,[x] reticence expressed about joining an independent Scotland,[xi] could impact upon the UKCS ‘carve-up’. Options for maritime boundaries should the Northern Isles choose to remain part of the UK were investigated as early as 2001.[xii] More recently, island councils (citing the EU’s Lisbon Treaty) jointly entered into discussions with Scottish Government over further autonomy (essentially devolution within devolution).[xiii] This led to the promise (upon independence) of allocation all net income from the islands’ sea bed leasing revenues to island communities.[xiv]
Whilst most attention has focussed on Scotland-rUK arrangements, other boundary issues could also surface. In the North Sea, is feasible that neighbouring states (e.g. Norway, Denmark) could seek renegotiation of their maritime boundaries with a newly-formed Scottish state although this appears to be little-discussed to date. Meanwhile, in the North Atlantic, Scotland could inherit the current disputes at the United Nations between the UK and three other states (Denmark via the Faroes Islands, Iceland and Ireland) over the status of the tiny island of Rockall and its surrounding waters. Although uninhabited (and considered uninhabitable), Rockall was claimed by the UK in 1955 and designated part of Scotland in 1972[xv] and is considered critical oil & gas claims in the West of Shetland area.[xvi]
[v] Wood Mackenzie, ‘Scottish independence and the North Sea’