Challenges for exploration and exploitation of oil and gas on the outer continental shelf: UNCLOS Article 82 and the Brazilian case

Abstract This article examines the primary regulatory challenges Brazil may encounter regarding the production of oil and natural gas (O&G) on the outer continental shelf (OCS). Specifically, Article 82 of the United Nations Convention on the Law of the Sea (UNCLOS), through a vague clause, requires the coastal State to pay compensation. The possible interpretations of Article 82 are explored, including insights from ISA Technical Studies. The article also outlines Brazil’s legal framework for O&G exploration and production, as well as the royalty calculation model. The analysis emphasizes the importance of applying a methodology to Article 82 similar to that used for national royalties. This approach aims to preserve contractual balance and safeguard Brazil’s economic interests in the OCS. However, the effective implementation of Article 82 remains contingent on internal political decisions and international measures that will determine whether Brazil’s interpretation prevails.