Mexico and US agree on oil and gas development in Gulf
WASHINGTON — 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 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,” 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 up to 1.5 million acres 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 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 by its growing middle class has risen.
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 is not sufficiently experienced for the task. Under Mexico’s 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, where well pressure is customarily high and the possibility of a blowout is greater than in shallower wells.
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 3-year-old agency Zepeda oversees, may be overmatched when it comes to regulating deepwater drilling.