US, Mexico settle offshore territory dispute

Following more than 2 years of bilateral negotiations, the US and Mexico have agreed on a division of the so-called Western Gap, a 17,190 sq km portion of the deepwater Gulf of Mexico that falls beyond the agreed maritime boundaries of the two countries. Under the just-negotiated treaty, announced June 1 in Mexico and expected to be signed on President Ernesto Zedillo's visit to Washington, DC, June 9, Mexico will end up with 62% of the gap, while the US will keep the remaining 32%.

Jun 5th, 2000


MEXICO CITY�Following more than 2 years of bilateral negotiations, the US and Mexico have agreed on a division of the so-called Western Gap, a 17,190 sq km portion of the deepwater Gulf of Mexico that falls beyond the agreed maritime boundaries of the two countries (see map, OGJ, Apr. 22, 1996, p. 31). Under the just-negotiated treaty, announced June 1 in Mexico and expected to be signed on President Ernesto Zedillo's visit to Washington, DC, June 9, Mexico will end up with 62% of the gap, while the US will keep 32%. A small portion of the area remains unassigned.

Once the treaty is approved by the Senates of both countries, the new boundary will take effect, and the US Minerals Management Service will be able to resume offering lease tracts in the region. MMS first began offering leases in the gap during the annual Western Gulf of Mexico lease sale in 1983 but stopped offering the blocks in 1997 following complaints from Mexico that the leases were premature before signing a treaty to formally divide the gap.

Mexico Energy Sec. Luis Tellez, in a press conference announcing the treaty, said that, according to studies by geologists with the state-run oil company Petroleos Mexicanos, there is a "high probability" of finding oil in the Mexican portion of the gap, although he offered no more details. He added that Mexico is unlikely to exploit that potential in the foreseeable future, as the country has much more economically viable deposits in shallower waters and onshore.

Special provision
The new treaty contains an unusual provision, creating a sort of "no man's land" measuring 5.2 km wide straddling the boundary. This area is to remain free of development for a period of 10 years after the treaty comes into force.

According to Sec. Tellez, geologists from both countries agreed that over 99% of crossboundary hydrocarbon deposits are located within this region.

The provision is clearly designed to allay Mexican fears, expressed loudly by politicians and the press in recent years, that US companies drilling near the boundary could syphon off oil and gas from the Mexican side.

A second "gap" exists in the eastern Gulf of Mexico, which involves not only Mexico and the US, but also Cuba. According to Mexico Foreign Relations Sec. Rosario Green, "There are no prospects for resolving that in the near future."

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