Two dozen major financial organizations with a total of $5.5 trillion in assets – an amount equal to half the GDP of China – have called for a preemptive ban on drilling in international waters of the Arctic.
In a statement addressed directly to oil majors and to the members of the Arctic Council, the group called for an unlimited moratorium on any oil and gas activity in the Arctic high seas, “the ultimate Arctic frontier that does not pertain to any single national sovereignty.”
“We are very proud to lead this new statement, which is a strong commitment from international investors. Along with other members, we call for coherence with national climate change pledges,” said Philippe Zaouati, CEO of Mirova.
The statement does not address Arctic oil exploration within the bounds of a nation’s Exclusive Economic Zone (EEZ). Goliat, the world’s northernmost offshore oil platform, is about 50 nm off of Norway – well within the 200-mile limit.
There are few if any precedents for oil exploration in international waters. The U.N.’s International Seabed Authority (ISA) would have jurisdiction, but since economically recoverable oil and gas are generally found within EEZs, this is not a matter of concern, according to World Ocean Review. Since its founding, the ISA has only issued about two dozen exploration licenses – an average of about one per year, most of them for subsea mining.
However, the financiers’ joint statement could apply to Russia’s ambitions for its own sector of the Arctic.
Russia has applied to the U.N. for an extension of its continental shelf rights, based on the argument that several underwater ridges constitute a part of its territory. Its latest submission asserts that an additional 1.2 million square km of seabed falls under its domain. The area would extend its outer continental shelf up to 350 nm beyond its shores – the maximum allowable under UNCLOS. If approved, it would allocate a large swath of seabed under the Arctic high seas to Russia – along with any oil underneath.