THE ‘LEGAL OR EXTENDED’ CONTINENTAL SHELF OF BRAZIL AND THE TAXATION OF OIL AND GAS

Abstract

Brazil has a Territorial Sea of 12 nautical miles1 (22.224 km) and an Exclusive Economic Zone (EEZ) that extends up to 200 M (370.400 km) from the baselines2 from which the breadth of its Territorial Sea is measured. In addition to that, Brazil is entitled to extend its Continental Shelf (in the Legal sense) in accordance with the criteria of Article 76 of the United Nations Convention on the Law of the Sea – also known as “UNCLOS”, “The Convention” or “The Law of the Sea Convention” – of 10 December 1982, which entered into force on 16 November 1994. However, such maritime limits were not always as they are today. Until 1993, Brazil had a Territorial Sea with a breadth of 200 M. With the approval of Law no 8,617 on 04 January 1993, the maritime limits of Brazil are now in accordance with the Law of the Sea Convention. Clearly defined maritime boundaries are essential for good international relations and worldwide effective ocean management. Maritime boundary delimitation requires people with legal and technical skills which are not always available on the market. Brazil has already agreed their maritime boundaries with their neighbor’s coastal States France (French Guyana) and Uruguay. As there are no maritime boundary disputes with such States, it remains the hard task of establishing the outer limits of its Legal or Extended Continental Shelf (LECS), sometimes also referred to as the Outer Continental Shelf (OCS). In order to avoid any confusion with the term continental shelf in the geological context, in this report we use LECS to refer to the continental shelf in the legal sense defined in Article 76 of the Law of the Sea Convention. The LECS of Brazil started to be determined in 1987 by means of a joint cooperation between the Brazilian Navy and Petróleo Brasileiro S.A. (Petrobras) – at that time the stated-owned Brazilian oil company and today the state-controlled Brazilian energy company –, with the participation and support of faculty members of several Brazilian universities. On 17 May 2004 the Brazilian Government submitted to the Commission on the Limits of the Continental Shelf (CLCS) of the United Nations (UN) its proposal specifying the outer limits of its LECS. In April 2007 the CLCS delivered to the Brazilian Government its “Recommendations” on the analysis of the Brazilian proposal. In 2008 Brazil started Phase 2 of the BrazilianContinental Shelf Survey Plan (Leplac – Plano de Levantamento da Plataforma Continental Brasileira), which deals with the establishment of the Brazilian LECS. Nowadays, Leplac’s tasks are being carried out by a group of experts, with the participation of Petrobras, under the leadership of the Brazilian Navy and thecoordination of the Interministerial Commission for the Resources of the Sea (CIRM – Comissao Interministerial para os Recursos do Mar). Brazil is preparing a revised proposal of the outer limits of its LECS, which shall be submitted to the CLCS in the near future.