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Follow the Leaders

U.S. Secretary of State Nominee Tillerson on LOS Convention in 2012

By: Ocean Law News

Rule of Law Committee for the Oceans

14 December 2016

With President-Elect Trump’s stated intent to nominate ExxonMobil Chairman and CEO Rex Tillerson to be his Secretary of State, this 2012 letter from Tillerson to Senators Kerry and Lugar is of particular interest to advocates for the Law of the Sea Convention. While the letter reflects the interests of ExxonMobil and is consistent with the views of Exxon and Mobil during the LOS Negotiations in the 1970s, the wording of the letter,  including a reference to “America’s energy security,” was approved and signed by Mr. Tillerson.

June 8, 2012

The Honorable John Kerry
Chairman
Committee on Foreign Relations
United States Senate Washington, DC 20510

The Honorable Richard Lugar
Ranking Member
Committee on Foreign Relations
United States Senate Washington, DC 20510

Thank you for renewing the Senate’s consideration of U.S. accession to the United Nations Convention on the Law of the Sea (UNCLOS). ExxonMobil supports the U.S. Senate’s consent to ratification of the UNCLOS.

As an American company engaged in the global market for energy development, ExxonMobil is interested in exploring for oil and gas resources that may exist under the vast new areas that are recognized for sovereignty purposes under the UNCLOS. The exploration and development of offshore resources is complicated and costly, and operating in the extended areas addressed under UNCLOS will be even more so. Before undertaking such immense investments, legal certainty in the property rights being explored and developed is essential.

Perhaps the best example of the need for certainty in an area with great unexplored potential involves the Arctic Ocean. The harsh and unique geographical attributes of the Arctic make responsible exploration and development extremely ambitious. Several countries, including the United States, are provided with a claim to extended exploitation rights under the application of UNCLOS in the Arctic. The legal basis of claims is an important element to the stability of property rights. With this basis established, there are often competing claims after the proper application of UNCLOS. These overlapping claims exist in the Arctic. UNCLOS can provide an efficient, comprehensive legal basis for the settlement of these conflicting claims, thus providing the stability necessary to support expensive exploration and development.

For ExxonMobil, delay in U.S. accession adds two layers of uncertainty. The first involves the international status of the United States’ own claims, and the second involves the claims of other countries that- absent U.S. accession- may someday be challenged by the United States. In both instances, whether we may be developing extended U.S. resources or those of another Arctic nation, the lack of legal certainty unnecessarily clouds our investment motivation. It also could cause American companies like ours, who act in compliance with international law, to be disengaged and potentially disadvantaged in regard to such areas over the longer-term in the global energy marketplace. ·

ExxonMobil understands the issues being raised against UNCLOS, and we have great respect for those who have strong countervailing opinions. As a private enterprise, it is not our role or intention to debate the extent to Which a measure of sovereignty may be lost under this treaty as compared to others, or the manner in which royalties may be spent once we make our payments to a national government as required. We do want to express, however, why U.S. accession is important to our company- and arguably to America’s energy security – as we make multi-billion dollar decisions on behalf of our shareholders, and why we support positive Senate action on UNCLOS in 2012.

Again, thank you for your efforts to move forward on the Senate’s consideration of the UNCLOS.

Sincerely

/s/

Rex Tillerson

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