forum: economic and social council

Forum: Economic and Social Council

Issue: Reforming the international regulation of offshore gas and oil

exploration

Student Officer: Elif İpek Eryılmaz

Position: Deputy Chair

Introduction

Although the developments in renewable energy and the decrease in oil demand following the COVID-19

pandemic, oil and natural gas demand is expected to rise in the following years due to population growth

and industrial development, corporations engage in offshore hydrocarbon exploration and drilling with the

support of countries aiming to decrease their energy dependence, strengthen the economy, or gain

geopolitical power. From 2005 to 2015, approximately 30% of the world crude oil production was from

offshore drilling (Manning). However, offshore oil and gas exploration isn't without its challenges. Offshore

hydrocarbon reserves can be located in areas claimed by different Member States, causing maritime

disputes resulting in deteriorating relations and even military confrontations. In addition, offshore drilling

activities can result in environmental damages, both during drilling and in the exploration phase. As the

number of offshore drilling facilities and the depth at which hydrocarbon resources are extracted increases,

the detrimental environmental impact, such as the contaminated mud and toxic water, also increases.

Member States' willingness or success in implementing the existing regulations on offshore drilling has also

been questioned. The lack of necessary rules or failures in implementation has been shown as a factor for

environmental disasters that resulted in damages to marine life and people's livelihoods in coastal areas. In

such disasters, the uncertainty on companies and countries' liability has resulted in a lack of compensation

to victims, especially in cases where such damages affected those outside the scope of the national or

regional regulations. It is important to recognize that, due to these factors, a lack of international regulation

results in an increased risk of disputes between the Member States, damages to the environment. An

international regulation would be influential in preventing such situations, relating to the theme of

"recognizing patterns in international relations against preventable damage." of RCIMUN’21.

Definition of Key Terms

Area: According to Article 1 of the UNCLOS, “the seabed and ocean floor and subsoil thereof, beyond the

limits of national jurisdiction.”

Baseline: The line along the coast of a coastal state from which the maritime zones are measured. Articles

5-14 of UNCLOS provide the basis for determining the baseline.

Exclusive Economic Zone (EEZ): The zone in which the coastal state has the sovereign right to the

exploration and exploitation of its natural resources, which has to be declared by the coastal state and can

extend to a maximum of 200 nautical miles, measured from the baseline (UNCLOS).

Continental Shelf: The earth's surface underwater that extends from the coast and usually ends with a

shelf break, where the slope of the surface becomes considerably steep (Encyclopædia Britannica). Coastal

states can extend their continental shelf beyond 200 nautical miles from the baseline; however, this should

comply with the recommendations of the Commission on the Limits of the Continental Shelf (CLCS), to

which the Member State must submit their request along with scientific evidence, as outlined in the Article

76 of the UNCLOS.

Deepwater drilling: Although there is not a certain number, deepwater drilling is considered offshore

drilling activities conducted at a depth of 400 meters or more (UK Parliament).

Hydrocarbons: Organic compounds formed only of hydrogen and carbon atoms. Hydrocarbons are the

main components of fossil fuels like natural gas or oil are hydrocarbons.

Maritime Boundary: Demarcation of different countries' maritime borders or the different zones (e.g., EEZ,

territorial sea) belonging to a country.

Maritime Disputes: Disputes arising from the conflicting maritime claims of different Member States.

Joint Development Zone (JDZ): Maritime zones located in disputed waters between the Member States

are used for economic activities under the Member States' cooperation. This is usually used when Member

States disagree on maritime claims and find it more profitable to exploit the resources by establishing a

JDZ.

Seismic Vessels: Seismic vessels send seismic waves, which are reflected from the different layers of the

seabed and are detected by the hydrophones on the streamer. This data is used to generate the seabed

models, which are used to determine areas with potential hydrocarbon resources (Offshore Fleet).

Subsea: Situated below the surface of the sea or seafloor. As a technical term, “subsea” refers to the

equipment below the seafloor used for offshore hydrocarbon exploitation.

General Overview

Despite a significant portion of world oil and gas being produced through offshore drilling, there is a lack of a

comprehensive regulatory framework on the international level. As a result of this lack of global regulation,

Member States have enacted their regulations, which in some cases were influential in the formation of

regional regulatory frameworks. However, these regulations may not be enough in offshore drilling activities

affecting the Member States outside the regional framework. The fragmentation of regulation may

complicate the implementation of such agreements.

There are multiple challenges in the international regulation of offshore oil and gas exploration. The

prominent challenge is the overlapping maritime claims of the Member States that can create an

environment with security risks that prevent exploration activities or discourage companies from making

investments. The overlapping maritime claims, especially those in areas estimated to have hydrocarbon

resources, can result in political instability.

Lack of regulation regarding offshore oil and gas exploration can also result in environmental problems, and

the seismic waves used for surveying can harm marine life. The regulations that exist may not cover all

aspects of offshore drilling. For example, while some Member States regulations include exploration and

exploitation of hydrocarbons, legislations of some Member States may not cover the exploration phase.

These gaps in regulations can result in unsafe practices by companies and a lack of liability. These gaps in

regulations show the possible adverse effects of national and regional regulations on offshore drilling. Also,

especially in countries lacking the necessary infrastructure, monitoring the implementation of offshore

exploration regulations can be a problem.

Overlapping Maritime Claims

The most significant issue for offshore oil and gas exploration activities is Member States' overlapping

maritime claims. These overlapping claims can arise due to various reasons. Not all Member States have

signed or ratified the UNCLOS, resulting in discrepancies between the recognized maritime zones by the

different Member States. However, even in situations where two Member States have ratified UNCLOS,

conflicting maritime claims can be made. These conflicting claims can be made due to different Member

States' maritime zones extending to the same area. In addition, the maritime claims of Member States may

originate from conflicting territorial claims on which the maritime claim is based or disagreements on the

status of a territory.

There have been different solutions to overlapping maritime claims in the past. Some Member States have

taken the International Tribunal cases for the Law of the Sea (ITLOS), while some have made bilateral

agreements. In situations where an agreement on demarcation was not reached, Joint Development Zones

were established. However, a significant number of maritime disputes remain unresolved.

Some areas with maritime disputes and the potential of having hydrocarbon resources are the Eastern

Mediterranean Sea, the South China Sea, the East China Sea, the Gulf of Guinea, and the Arctic.

Arctic

The Russian Federation was the first nation in the Arctic to submit a continental shelf claim to the

Commission on the Limits of the Continental Shelf (CLCS). The submitted data were found insufficient by

the CLCS, which recommended the submission to be revised. Following the Russian Federation's claim,

Norway claimed in 2006 and received a recommendation from CLCS, being the first country to do so. Other

countries have submitted similar claims to the CLCS. The USA currently cannot make such a claim since it

is not a state party to UNCLOS.

The overlapping maritime claims in the Arctic have so far been resolved by bilateral agreements or through

the bodies established in UNCLOS (The Arctic Institute).

Eastern Mediterranean

In 2009, a gas field discovery was made in the Exclusive Economic Zone of Israel. It was followed by

discovering the Leviathan gas field in 2010 and a year later, a discovery near Cyprus. Following the

discovery of these offshore hydrocarbon fields, the delineation of maritime borders gained importance.

However, previous issues between the Member States in the region make it difficult for the Member States

to reach a consensus. One such issue is the delineation of the maritime boundaries between Greece and

Turkey. In addition to the disputes concerning the islands in the Aegean Sea, Greece and Turkey do not

share the same view on maritime delineation. While Greece argues that islands are entitled to an EEZ,

Turkey opposes this view according to the

UNCLOS. While Greece claims that the

EEZ should be determined according to

the UNCLOS's equidistance principle,

Turkey perceives this position as an

attempt to restrict its maritime boundaries

severely. In particular, the overlapping

maritime claims of the countries near the

island of Kastellorizo, which is 2 km from

the coast of Turkey, has been a ground for disagreement, especially after Turkey has sent a survey ship to

the maritime zone claimed by both countries in July 2020 (BBC News). It is important to note that the

UNCLOS does not bind Turkey under international law since it has not ratified the UNCLOS, objecting to

certain articles, including territorial waters extending to 12 nautical miles and islands having their maritime

zones.

Another reason for overlapping maritime claims is the issue of Cyprus. The role of the United Kingdom,

Greece, Turkey, and Cyprus in ensuring the independence and territorial integrity of Cyprus was determined

by the Treaty of Guarantee of 1960, giving the countries the right to intervene—if a joint solution cannot be

achieved—to ensure the implementation of the treaty, which Turkey used as a justification to occupy the

northern part of the island following a coup d’état backed by the military of Greece in 1974. In 1983, the

Turkish Republic of Northern Cyprus (TRNC) was established (BBC News). This dispute is a reason for

overlapping maritime claims since TRNC, recognized only by Turkey, claims parts of Cyprus's EEZ. In

addition, Turkey defends that Cyprus, being an island, is not entitled to an EEZ. Over the years, many

UN-sponsored talks took place, with some plans being proposed; however, a solution accepted by both

sides has not been achieved.

Another maritime boundary dispute is related to the memorandum of understanding between Turkey. The

UN-backed Government of National Accord (GNA) of Libya signed in 2019, which has faced criticism and

was not recognized by some Member States.

In addition, the discoveries of gas fields in the Eastern Mediterranean have led some countries to support

the construction of a pipeline for natural gas exports to Europe. Initially discussed between Cyprus, Greece,

and Israel, the pipeline project was later supported by other countries leading to the formation of the

EastMed Gas Forum (EMGF), including Egypt, Israel, Greece, Cyprus, Italy, Jordan, and the Palestinian

Authority. Although some see this as an opportunity for international cooperation, Turkey has voiced its

disapproval of being excluded from the forum (Matalucci).

Other maritime disputes also exist in the region, such as the maritime demarcation between Israel and

Lebanon, resulting in overlapping maritime claims in an 850 km2 area. Lebanon took the issue to the United

Nations, and the United States of America was designated as a mediator; however, an agreement hasn't

been reached. The maritime zone is especially important due to a gas field located near the zone with

overlapping maritime claims and the possibility of hydrocarbon resources located in the disputed zone

(France 24).

Gulf of Guinea

Following the failure of reaching an agreement on the maritime boundaries, Nigeria, and Sao Tomé and

Principe have established a Joint Development Zone, with the 60% of the revenues from the drilling

activities being received by Nigeria and the remaining 40% of the revenues going to Sao Tomé and

Principe. Similar agreements to establish JDZs have been made in different parts of the world, such as the

one between the US and Mexico (Hughes 247).

South China Sea

The South China Sea disputes have multiple parties, such as the Philippines, Malaysia, Vietnam, Taiwan,

Brunei, and the People's Republic of China. Although the countries have different disputes between

themselves, the most significant issue is the overlapping maritime claims resulting from the People's

Republic of China's claim, known as the

nine-dash line. The rather vaguely defined

nine-dash line is based on a map from 1947.

Despite China being a state party to UNCLOS, it

is making a maritime claim that encompasses

most of the South China Sea. China considers

this area to be its territorial sea due to what it

considers to be its historical claim.

Additionally, China has claimed the Spratly and

Paracel islands in the South China Sea and has

been accused of building military bases on

islands built by landfilling operations on the

reefs. The Philippines have applied to the

Permanent Court of Arbitration; however, China refused the court's jurisdiction on the issue. The area is rich

in hydrocarbon resources. A company called China National Offshore Oil Corporation (CNOOC) has started

drilling activities in a disputed area (Hughes 237-279).

Fragmented Regulations

With the lack of an international framework or a binding instrument to regulate offshore oil and gas activities,

problems can arise from regulations' fragmented nature. These can be due to the regional regulations'

differences, such as the scope of the agreements, the time at which they were accepted, and whether they

are binding. In addition, the lack of an international convention can make cooperation difficult.

The Protocol on Environmental Protection to the Antarctic Treaty is an indication of an agreement's scope.

This protocol in the Antarctic Treaty System forbids all mining and oil and gas extraction operations that

would jeopardize environmental conservation and the use of Antarctica for peaceful purposes and scientific

study. In other regions around the world, regulations are much less strict, mostly focusing on operators'

liabilities.

In addition to the differences in scope, regional agreements also differ in their status under international law.

While some have binding measures, some regional agreements are dependent on the voluntary

implementation by the Member States. The fragmentation caused by regional agreements makes it difficult

for the Member States to cooperate in different regions.

Environmental Issues

The need for regulation regarding offshore drilling has been realized due to accidents in offshore drilling

rigs. Accidents in offshore drilling facilities can result in the death of the personnel working on the drilling

facility, and the oil spill causes severe pollution.

One incident that raised the question of whether offshore hydrocarbon exploration and exploitation activities

should be permitted in certain areas, or at all, was the Montara oil spill, which occurred on 21 August 2009.

The spill was stopped on 3 November 2009. There were no deaths or injuries in the facility; however, the

spilled oil spread over an area of 6000 km2 in the Timor Sea (Ali). Following the accident, the Indonesian

fisherman opened a lawsuit against PTTEP, the company operating the platform. It caused health problems

and damaged marine life in Indonesia's exclusive economic zone, decreasing the income of the fisherman

significantly. However, the lawsuit has been continuing for a long time due to this claim. The extent of the

spill, being disputed, results in the fisherman being unable to receive compensation. PTTEP has been able

to continue operating oil platforms after the incident, paying a $510,000 fine. Multiple issues were raised

following this incident, such as whether offshore hydrocarbon exploration should be allowed in certain

areas, the compensations given to individuals that fall outside the national legislation's scope, and the

regulations that apply in such situations. These problems demonstrate a need for an international regulatory

framework.

Although not having as many risks or environmental damages as offshore drilling, ecological concerns

regarding the offshore oil and gas exploration activities have been raised. One of these concerns is the

negative effect the underground noise caused by the seismic waves can interfere with cetaceans' functions

like dolphins and whales, specifically their ability to communicate using sound waves and navigation using

echolocation (Scott 288).

In addition, although not very common with the use of seismic vessels and the development of new seismic

imaging technology, the wells drilled for exploration purposes should be left in a way that does not harm the

environment if a dry well is drilled. The regulations on offshore hydrocarbon exploitation should also cover

the decommissioning phase. Regulatory gaps in environmental protection and the lack of capacity of

Member States in enforcing the existing national or regional regulations may result in the environmental

protection measures being left to the operators' voluntary implementation. There may be an unequal

implementation by different operators in such cases and an overall lack of responsibility for damages.

Major Parties Involved and Their Views

The Organization of the Petroleum Exporting Countries (OPEC)

OPEC was established in 1960 by five countries: Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. It has a

total of 13 participants, including Libya, the United Arab Emirates, Algeria, Nigeria, Angola, Gabon,

Equatorial Guinea, and Congo. Although it is an intergovernmental organization with the purpose “to

coordinate and unify petroleum policies among Member Countries, to secure fair and stable prices for

petroleum producers; an efficient, economical and regular supply of petroleum to consuming nations”

(Organization of the Petroleum Exporting Countries), it is considered by some to be an international cartel.

OPEC members manage a large portion of the world's oil and gas supplies, and they control markets by

limiting supply. Some members of OPEC, like Saudi Arabia, engaged in offshore drilling operations.

However, OPEC has limited control over the production generated by offshore drilling in countries that are

not a part of OPEC.

Russian Federation

The Russian Federation is an essential supplier of natural gas and oil, especially in Europe. 44.7% percent

of the natural gas imports of the European Union in 2019 was from Russia, and with a share of 28.0%, it

was also the largest oil supplier (EU Imports). The developments in the Eastern Mediterranean, such as

discovering new oil and gas fields or the construction of the EastMed pipeline, could affect its hydrocarbon

exports to Europe.

Timeline of Events

1890s First offshore drilling rigs are used

1945 The US extends its jurisdiction over the continental

shelf, an act that goes against the

freedom-of-the-seas doctrine.

1947 Drilling in the Gulf of Mexico begins.

UN Involvement

In the current situation, there is a gap in the regulation of offshore hydrocarbon exploration and exploitation.

Despite the UNCLOS provisions, there isn't a comprehensive internationally accepted agreement on the

safety of offshore hydrocarbon activities or an active process for the creation of such a document.

International Seabed Authority (ISA)

The International Seabed Authority also referred to as "the Authority" in UNCLOS, is an organization

established in UNCLOS responsible for regulating the area's minerals. Member States who ratify UNCLOS

become a part of the ISA. The organization is responsible for deciding on the regulation to ensure the safe

exploration and exploitation of resources in the deep seabed and minimize the mining operations' negative

impacts (International Seabed Authority).

International Tribunal on the Law of the Sea (ITLOS)

ITLOS is a tribunal established in the UNCLOS, as outlined in Annex VI. As mentioned in UNCLOS,

Member States can take disputes arising from UNCLOS's interpretation or implementation to the ITLOS.

The Seabed Disputes Chamber of ITLOS can provide opinions on disputes resulting from activities

regulated by ISA. 29 cases have been submitted to ITLOS (International Tribunal for the Law of the Sea).

Commission on the Limits of the Continental Shelf (CLCS)

CLCS is a UNCLOS-established committee, with details given in Annex II. Members who wish to stretch

their continental shelf past the 200-mile EEZ would use CLCS, as well as the required science data on the

continental shelf's boundaries. A continental shelf is available to Member States whose applications are

recommended by CLCS.

Relevant UN Documents

1973- 1982 Third United Nations Conference on the Law of the

Sea

1982 UNCLOS adopted as a result of the Conference

16 November 1994 UNCLOS comes into force

● Oceans and the law of the sea, Resolution adopted by the General Assembly on 31 December

2020 (A/RES/75/239)

The most recent of the General Assembly's annual resolutions on the seas and the rule of the sea. It is

divided into 17 sections that cover a broad variety of subjects, including UNCLOS implementation, capacity

building, and the marine environment. Articles on oil spill preparedness can be found in Part IX, which deals

with the aquatic climate.

● Report of the twenty-ninth Meeting of States Parties, 17-19 June 2019 (SPLOS/29/9)

Report on the Meeting of the States Parties to the United Nations Convention on the Law of the Sea

(SPLOS), which is held every year to review progress on UNCLOS compliance. It also contains the

Secretary-report General's on UNCLOS, as required by article 319 .Details on maritime conflicts,

representations to the Commission on the Continental Shelf, aquatic habitats and emissions, and ISA

activities can be included in the meeting paper. The ISA's work on drafting a law on resource exploitation in

the Area may be useful in developing international regulations.

● Oceans and the law of the sea - Report of the Secretary-General, 20 March 2018 (A/73/68)

The report of the Secretary-General on “anthropogenic underwater noise.” The anthropogenic noise

mentioned in the report also includes the use of seismic airgun surveys. This relates to the noise produced

by seismic vessels for offshore hydrocarbon exploration. The report mentions the impact on marine life, how

this affects coastal communities with fishing activities, and how Part IV-A examines the legal framework on

the global, regional, and national levels.

● Oceans and the law of the sea - Report of the Secretary-General, 30 March 2015 (A/70/74)

A section on the use of non-living resources is included in the Secretary-report General's on the use of

oceans for sustainable development (page 14-16). It includes data on offshore oil output as well as

forecasts for the volume of undiscovered oil and gas deposits. The operations of ISA and regional

organizations are briefly listed.

Treaties and Events

In the 17. century, countries' maritime jurisdiction was determined by the freedom-of-the-seas doctrine,

which gave countries a territorial sea of 3 nautical miles around the coast, the remaining belonging to no

particular country. However, in the following centuries, the situation began to change. By the mid 20.

century, the freedom-of-the-seas doctrine was not enough to define countries' maritime jurisdiction due to

concerns of the depletion of fish stocks, pollution, countries wanting to expand their naval forces, and the

mineral resources under the Seabed. As a result, Member States began to make unilateral claims on their

maritime jurisdiction.

Along with other claims, a 12-mile territorial sea was declared by the several Member States. Oil was an

essential factor in these declarations, with discussions on the exploitation of offshore oil in the Gulf of

Mexico and the North Sea. Following a request by Arvid Pardo, Malta's Ambassador to the UN made on 1

November 1967, the UN started actively working on the Law of the Sea. In the following years,

developments regarding the Seabed, the maritime zones, the exploitation of the resources, and the

jurisdiction of Member States were made, such as the establishment of the UN Seabed Committee in 1968,

the Treaty Banning Nuclear Weapons on the Seabed, the Stockholm Conference on the Human

Environment and the adoption of the UNCLOS ( United Nations Office of Legal Affairs).

United Nations Convention on the Law of the Sea (UNCLOS)

The third UN Conference on the Law of the Sea was convened in 1973, and at the end of nine years, the

United Nations Convention on the Law of the Sea was adopted in 1982 and came into force on 16

November 1994 (United Nations Office of Legal Affairs).

After adopting UNCLOS, the USA has accepted the treaty as customary law; however, although taking part

in the conference to prepare the treaty, the USA did not sign it due to its objection to Part XI. A revision to

the Convention, Agreement Relating to the Implementation of Part XI of the Convention, was accepted in

1994; however, the Convention has failed to receive the Senate's ratification.

There are 168 state parties to the Convention, 150 state parties accepting the 1994 agreement

("Chronological Lists"). Some Member States that have not signed the treaty are Israel, Turkey, Venezuela,

Peru, and the USA. UNCLOS establishes organizations responsible for implementing the Convention or

regulating offshore drilling activities and defines essential terms, including the maritime zones.

Offshore Pollution Liability Agreement (OPOL)

OPOL was an agreement to which oil and gas exploitation facility operators were parties. It was intended as

a temporary measure while another regional convention called the Convention of Civil Liability for Oil

Pollution Damage Resulting From Exploration for and Exploitation of Seabed Mineral Resources (CLEE)

was negotiated; however, failing an agreement from the negotiating countries, the Convention didn’t come

into force. Nevertheless, OPOL’s activities continued. In addition to being a regional agreement, OPOL has

a 250 million dollars per incident limit on liabilities.

International Convention on Civil Liability for Oil Pollution Damage (CLC)

CLC was adopted on 29 November 1969 and entered into force on 19 June 1975 (International Maritime

Organization). It established the liability of shipowners in case of oil pollution from a ship carrying oil. The

Convention adopted in 1969 applied to ships in the territory of a state party. Although it has not been ratified

by all state parties to the original Convention, following an additional protocol accepted in 1992, pollution

caused in EEZs was also covered. The Convention does not limit the compensation when the shipowner is

at fault and has limits varying by the shipowner's gross tonnage if the pollution is not the fault of the

shipowner. However, the Convention only applies to oil tankers, not to offshore oil and gas installations.

Evaluation of Previous Attempts to Resolve the Issue

UNCLOS is primarily seen as a success in determining Member States' jurisdiction in the maritime zones,

their economic rights, responsibilities regarding the environment, and the exploration and exploitation of the

resources. However, it can be problematic to regulate a Member State's activities when it is not a party to

UNCLOS.

Although measures for settling maritime disputes can be found in UNCLOS and Chapter VI of the UN

Charter regarding the Pacific Settlement of Disputes, these measures are not always successful in providing

a solution to the dispute. For example, despite ratifying UNCLOS, some Member States have rejected the

jurisdiction of ITLOS on the maritime disputes they are involved in.

There were previous efforts in creating an international regulation, such as the Draft International

Convention on Offshore Mobile Craft. Comité Maritime International prepared its first draft in 1977. Revised

versions of the draft convention were presented in International Maritime Organization (IMO) meetings over

the years. Active work on the draft convention ceased following an IMO meeting in which parties, including

the United States, have questioned the need for an international convention on the matter.

The issue was also discussed within G20; however, these discussions did not agree between the Member

States on an international regulatory framework (Strengthening the International Regulation).

Possible Solutions

Regulations to support the Member States in establishing Joint Development Zones (JDZs) for disputed

areas with hydrocarbon resources or areas with transboundary hydrocarbon resources can be useful in

some cases. However, it is important to recognize that the Member States do not always accept this

solution since disputed maritime claims are not always affected by profits and the geopolitical power the

Member States have.

UNCLOS is a comprehensive document on the regulation of offshore drilling and exploration activities in the

Area, the maritime boundaries, and the jurisdiction Member States have in different maritime zones. The

UNCLOS asks for the state parties to meet regarding the implementation of UNCLOS; however, it is also

important to ensure that the Member States' objections that are not a party to the agreement are heard.

Regulations are implemented in the Member States through the licensing given for exploration or

exploitation. The licenses can be granted to companies that show the necessary technical expertise on

offshore hydrocarbon resources and the governance to ensure compliance with environmental regulations.

Member States considering the capabilities of the operators when granting licenses can be useful in

regulating. Requirements on the agreements between operators and private entities can be important in

regulating exploration and drilling for situations in which a private entity owns the rights to the oil and gas

resources.

The disputes between countries on maritime delineation may make offshore hydrocarbon exploration

undesirable for companies. Lack of regulations on the liabilities of operators or uncertainties on the amount

provided by insurance may result in a lack of compensation to victims, either because the operator is not

held responsible or unable to pay. This is why offshore hydrocarbon exploration solutions should recognize

the political and economic uncertainties of offshore drilling and aim to address a lack of regulation on

liabilities to reduce the uncertainties for offshore facility operators.

For solutions regarding the environment or the monitoring of the exploration activities by a Member State,

the Member State needs to have the necessary infrastructure for ensuring the implementation of the

regulations on oil and natural gas exploration. This is why, for some Member States, capacity-building

measures may be necessary.

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