U.S. - Mexico Transboundary Hydrocarbons Agreement Enacted
Agreement Provides Access to Nearly 1.5 Million Acres of the U.S. Outer Continental Shelf, Paves the Way for Development of Common Safety and Environmental Standards
Secretary of the Interior Sally Jewell applauded the enactment of the U.S.-Mexico Transboundary Hydrocarbons Agreement that establishes a framework for U.S. offshore oil and gas companies and Mexico’s Petroleos Mexicanos (PEMEX) to jointly develop transboundary reservoirs. President Obama signed it into law, as part of the Bipartisan Budget Act.
“I applaud the House and Senate for working together to pass this important agreement, which supports the responsible expansion of domestic energy production,” Secretary of the Interior Sally Jewell said. “The 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 Transboundary Agreement removes uncertainties regarding development of transboundary resources in the resource-rich 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 Department of Interior’s Bureau of Ocean Energy Management (BOEM) 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.
In May 2010, Presidents Obama and Calderon committed to reaching an agreement to jointly develop reservoirs that were determined to be transboundary. Since that time, 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.
In February, 2012 then-Secretary of the Interior Ken Salazar joined Mexican President Felipe Calderon, Secretary of State Hillary Rodham Clinton, Mexican Minister of Foreign Relations Patricia Espinosa, and Mexican Minister of Energy Jordy Herrera in Los Cabos, Mexico to sign an agreement on the exploration and development of oil and natural gas reservoirs along the United States’ and Mexico’s maritime boundary in the Gulf of Mexico. Mexico’s legislature passed the legislation in April 2012.
The Transboundary Agreement sets clear guidelines for the development of oil and natural gas reservoirs that cross the maritime boundary. Under the Agreement U.S. companies and PEMEX will be able to voluntarily enter into agreements to jointly develop those 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 also 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 of the boundary will review all plans for the development of transboundary reservoirs, and additional requirements may be set before development activities are allowed to begin.