U.S./Mexico Sign Trans-boundary Energy Agreement

April 2012, Vol. 239 No. 4

The U.S. and Mexico have finalized an agreement to cooperate on oil and gas developments in the Gulf of Mexico.

The Trans-boundary agreement was signed in Los Cabos, Mexico by U.S. and Mexican officials, including Secretary of State Hillary Rodham Clinton. The agreement provides guidelines to allow U.S. operators and Mexico’s state-owned Petroleo Mexicanos (PEMEX) to develop oil and gas reserves in waters that straddle the nations’ maritime border.

The agreement, which must be approved by the legislatures in each country, establishes a framework for U.S. offshore oil and gas companies and PEMEX to develop jointly trans-boundary reservoirs. It 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.

Interior Secretary Ken Salazar said the Obama administration is committed to the responsible expansion of domestic energy production. 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 sets clear guidelines for the development of oil and natural gas reservoirs that cross the maritime boundary. U.S. companies and PEMEX will be able to voluntarily enter into agreements to develop jointly those reservoirs. If consensus cannot be reached, the trans-boundary 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.

It provides for joint inspection teams from the Bureau of Safety and Environmental Enforcement and the Mexican government to ensure compliance with applicable laws and regulations. Relevant agencies on both sides will review all plans for the development of trans-boundary reservoirs, and additional requirements may be set before development activities are allowed to begin.

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