As U.S. oil and gas companies press the frontier of deepwater exploration and development in the Gulf of Mexico, pressure is rising within the administration of President Clinton and within the petroleum industry for the U.S. Senate to ratify a 1978 U.S.-Mexico border treaty and establish a legal frontier between the two countries in the gulf.
Mexican officials have recently voiced concern over U.S. deepwater drilling near acreage disputed by both countries (OGJ, Apr. 22, 1996, p. 30).
The American Petroleum Institute is expected to pass a resolution sometime in May regarding the treaty, and one API staff member said it would likely be in support of ratification.
"I'm not sure that's the position they're going to take, but I think so," said Genevieve Laffly Murphy, API exploration affairs consultant. "We want to take a position very soon. As the technology gets better and better and companies can look deeper and deeper, this is an issue that needs to be resolved."
Shell Oil Co., one of the biggest players in the deepwater gulf, also came out in favor of ratification recently. A company official said, "We support the ratification of the treaty that sets out the provisional boundaries."
At the same time, Interior Department's Bob Armstrong recently sent a letter to the State Department supporting ratification as a necessary step toward establishing internationally recognized boundaries in the gulf. The letter states, "As industry interest and activity near these lines increases, it becomes ever more important that our department and oil and gas companies know with certainty the permanent location of the U.S.-Mexico boundary."
Problems
Armstrong's letter goes on to note that ratification of the treaty is a necessary first step before negotiating with Mexico over the division of the so-called "western gap," a region that falls outside the limit of 200 nautical miles from either country and is not addressed in the treaty.
The Minerals Management Service has offered leases in the northern portion of the western gap since 1983, even though the region has not been formally divided, a fact that has irked Mexican politicians who fear unilateral actions on the part of the U.S.
The Departments of Interior and State proposed to Mexico that the western gap be divided through negotiations in 1994, but the Mexicans maintained the treaty must first be finalized before any such division could take place.
The "eastern gap" also involves Cuba, and because of political tensions between the U.S. and that country, that issue is not likely to be resolved soon. According to one State Department official involved in the issue, the recent support from the oil and gas industry will be enough to stir the Senate into action and get the treaty ratified. "We've talked to a lot of industry folks about this, and we would need some support from the industry to help get this resolved," the official said. "If that resolution (from API) is favorable, I don't see anything that would stop the treaty from being ratified."
Mexican tempers rising
Action on ratifying the treaty and resolving the boundary is coming none too soon from the Mexican point of view.
Historically suspicious of U.S. intentions, especially regarding petroleum, many Mexican have come to view the delay in finalizing the border as part of a plot to rob Mexico of valuable resources.
Newspapers and magazines during the past month have run articles with ominous headlines like "U.S. Senate Ignores Agreements" and "U.S. Appropriates Rich Deposits," while opposition politicians score points accusing the Zedillo administration of failing to protect national sovereignty.
In a recent hearing with Foreign Relations Secretary Jose Angel Gurria, Sen. Jose Angel Conchello Davila of the National Action Party (PAN) raised the issue, saying, "It worries me that we will be victims of a diplomatic aggression to take control of petroleum that legally and historically belongs to Mexico."
Deputy Francisco Curi, member of the Democratic Revolutionary Party (PRD) and head of the energy committee in the lower house of Congress, backs up Conchello, saying, "If it is shown that petroleum is out there (in the western gap), I'll go out there on a raft with Conchello and defend our national sovereignty at gun point."
Operation 'Straw'
Sen. Conchello has also recently raised the prospect that U.S. oil companies could drain Mexican oil and gas reserves while drilling in U.S. waters, which he dubs his "straw" theory.
"The large petroleum companies, although drilling on their side, could be sucking petroleum from deposits that are under the exclusive zone of Mexico," said Conchello.
Conchello's fears are echoed in the Foreign Relations Secretariat. "We agree completely with the worries of the Senator," said Leonora Rueda, director of frontier issues involving the U.S. and Mexico at the Secretariat. "Up to this point, no such operation has been confirmed, and we have no basis to make any denunciations to the U.S. But we are not going to renounce resources that by law correspond to us."
According to Interior's Tom Kitsos, the hypothesis is not unreasonable: "The issue of drainage from one jurisdiction by drilling going on in another jurisdiction is geologically and technically possible," said Kitsos. "At this point, no U.S. drilling is going on close enough to the boundary for drainage to be a problem, but once the line is firmed up, it is conceivable."
The best first step to clearing up the boundary dispute, from the Mexican point of view, is to simply sign the treaty and clear up any lingering suspicion.
"It seems contradictory that since Reagan, the government has spoken about the need to take control of its borders, but during that same time the U.S. has not signed the treaty that would stabilize its maritime borders," Conchello said. "In the Gulf of Mexico, you don't have to build any walls; just put your signature on a treaty that has already been made freely and willingly by both countries."
Copyright 1997 Oil & Gas Journal. All Rights Reserved.
