The United States and Mexico reached agreement Monday on
regulating oil and gas development along their maritime border in
the Gulf of Mexico.
The United States and Mexico reached agreement Monday on
regulating oil and gas development along their maritime border in
the Gulf of Mexico, ending years of negotiations and potentially
opening more than a million acres to deepwater drilling.
The agreement, if ratified by Mexican and U.S. lawmakers, would
for the first time provide for joint inspection of the two
countries' rigs in the gulf. Until now, neither was authorized to
oversee the environmental and safety practices of the other, even
though oil spills do not respect international borders.
"Each of the nations will maintain sovereignty and their own
regulatory systems," Ken Salazar, the U.S. interior secretary, said
from Los Cabos, Mexico, where the agreement was completed. "But what
this signifies, and what may be the most significant part of the
agreement, is that we're moving forward jointly with Mexico to
ensure we have a common set of safety protocols.
"As the Mexicans move into deepwater development," Mr. Salazar
said, "we want to make sure it's done in a way that protects the
environment and is as safe as possible."
The Transboundary Agreement, as it is called, will make as much
as 1.5 million acres, or 600 hectares, of offshore territory claimed
by the United States available for leasing as early as June, though
the leases will not become active until a pact is ratified. The
Interior Department estimates that the area contains as much as 172
million barrels of oil and 300 billion cubic feet, or 8.5 billion
cubic meters, of natural gas, relatively modest amounts by the oil-
rich gulf's standards.
Mexico's oil production has been a major source for the United
States for more than 25 years, and it is the single most important
revenue-raiser for the Mexican government. But its output has been
in sharp decline in the last decade, as energy demand has risen
among the growing middle class, forcing a decline in exports and
raising the possibility that Mexico could become a net oil importer
by the end of the decade.
In response, Mexico's national oil company, Petroleos Mexicanos,
known as Pemex, has started a deepwater drilling program in recent
years despite concerns that it lacks experience for the task. Under
the Mexican Constitution, Pemex cannot bring in a foreign partner
like Royal Dutch Shell or Exxon Mobil to develop the gulf reserves,
even though those companies have much more expertise in drilling in
challenging waters.
Pemex has drilled more than a dozen exploratory deepwater wells
since 2002, but the results have been mixed. It plans to drill six
more wells this year, including two at depths of more than 6,000
feet, or 1,800 meters, where the possibility of a blowout is
greater.
The program has been controversial in Mexico, especially after
the BP accident two years ago. Juan Carlos Zepeda, Mexico's chief
oil regulator, has warned that Pemex is not prepared to control a
possible leak from the two deepest wells it is planning this year
and that the National Hydrocarbons Commission, the three-year-old
agency Mr. Zepeda oversees, may be overmatched when it comes to
regulating deepwater drilling. With a staff of 60, little logistical
capability and a budget of only $7 million, it has had minimal say
in how Pemex operates.
In 1979, a blowout at a Pemex shallow-water well called Ixtoc I
in the Bay of Campeche resulted in the largest oil spill ever in the
gulf until the BP Deepwater Horizon disaster in 2010.
The issue of sharing oil and gas reserves in gulf border waters
dates to the 1970s. The two countries negotiated a treaty that would
define their exploratory rights in border zones, but the U.S. Senate
declined to ratify it in 1980.
Presidents Barack Obama and Felipe Calderon agreed to extend a
drilling moratorium in the area until they could negotiate a final
accord. The zones covered by the agreement are near areas being
drilled successfully, but they are in water depths reaching 10,000
feet and are considered vulnerable to hurricanes.
"Mexico doesn't have the resources to combat a major oil spill,
and the United States does," said Jorge Pinon, a former president of
Amoco Oil Latin America and a current research fellow at Florida
International University. "Coordination and sharing communications,
training, personnel, equipment and technology are essential for safe
and productive drilling."
