U.S., Mexico Open Transboundary Gulf Waters to Oil and Gas
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LOS CABOS, Mexico, February 20, 2012 (ENS) - Officials from the United States and Mexico today signed an agreement that eases the way for exploration and development of oil and natural gas reservoirs along the United States' and Mexico's maritime boundary in the Gulf of Mexico.
Mexican President Felipe Calderon, Mexican Minister of Foreign Relations Patricia Espinosa, and Mexican Minister of Energy Jordy Herrera joined Secretary of the Interior Ken Salazar and Secretary of State Hillary Clinton today in Los Cabos, Mexico for the signing ceremony.
Secretary Clinton has been in Los Cabos since Saturday to participate in the first G-20 Ministers of Foreign Affairs informal meeting. She said today that the U.S.-Mexico Transboundary Hydrocarbons Agreement would "ensure safe, efficient, responsible exploration of the oil and gas reservoirs in the Gulf of Mexico."
As a result of the agreement, nearly 1.5 million acres of the U.S. Outer Continental Shelf will now be made more accessible for exploration and production activities.
Estimates by the U.S. Interior Department's Bureau of Ocean Energy Management indicate this area contains as much as 172 million barrels of oil and 304 billion cubic feet of natural gas.
The agreement also opens up resources in the Western Gap that were off limits to both countries under a previous treaty that imposed a moratorium along the boundary through 2014.
"The Obama Administration is committed to the responsible expansion of domestic energy production," Secretary Salazar said. "This agreement makes available promising areas in the resource-rich Gulf of Mexico and establishes a clear process by which both governments can provide the necessary oversight to ensure exploration and development activities are conducted safely."
The agreement governs revenue that will flow to the two countries as they drill into common oil and gas reservoirs on both sides of the maritime border. It establishes safe drilling standards for the transboundary oil and gas reservoirs.
Removing uncertainties that have affected development of transboundary resources in the Gulf of Mexico, the agreement establishes a framework for U.S. offshore oil and gas companies and Mexico's Petroleos Mexicanos, PEMEX, to voluntarily enter into agreements to jointly develop transboundary reservoirs.
In the event that consensus cannot be reached, the transboundary agreement establishes the process through which U.S. companies and PEMEX can individually develop the resources on each side of the border while protecting each nation's interests and resources.
The transboundary agreement provides for joint inspection teams from the U.S. Interior Department's Bureau of Safety and Environmental Enforcement and the Mexican Government to ensure compliance with applicable laws and regulations.
Relevant agencies on both sides of the border will review all plans for the development of transboundary reservoirs, and additional requirements may be set before development activities are allowed to begin.
In May 2010, Presidents Obama and Calderon committed to reaching an agreement to jointly develop reservoirs that were determined to be transboundary.
Since then, representatives from the U.S. Department of State, the U.S. Department of the Interior, and Mexico's Foreign Ministry and Ministry of Energy worked to negotiate an agreement that can be implemented while respecting each nation's legal framework.
Now, both countries will work through their domestic systems to bring the agreement into force.
Secretary Salazar told reporters on a teleconference today that the oil and gas industry supports the agreement. Industry infrastructure is already positioned in the area covered by the agreement, Salazar said, so the agreement will be implemented in the "near term."
The agreement should clear the way for development of 166 blocks along the maritime boundary that were offered for sale in December 2011, but received no bids. According to Platt's news service, companies have shown an interest in these blocks, but have shied away from the border area in the Western Planning Area, which stretches from South Padre Island along the Alaminos Canyon and the Keathley Canyon areas.