Transboundery Oil and Gas Fields Between the USA and Mexico

Trans-boundary oil and gas fields between the USA and Mexico

Javier Estrada, Miriam Grunstein and David Enriquez

Abstract:

The development of offshore petroleum resources in the Gulf of Mexico has developed to a point where Mexico and the USA will soon have to solve issues related to the exploration and production of fields that extend along both sides of their territorial waters. The issues are complex since none of the two countries counts today with the agreements, legislation, regulations and technical standards (norms) to tackle those cases specifically. Furthermore, in the case of Mexico the existence of constitutional principles on the state ownership of the petroleum resources, as well as on the establishment of a legal monopoly to carry all the operations related to the exploration and production of the national petroleum resources, poses serious limitations to joint operations with third petroleum companies. In the case of the USA, the legal framework does not consider this type of joint operations in an explicit manner and it is uncertain who the authorities directly responsible to propose the solutions are. At the present stage, neither the authorities nor the legislators of both countries have engaged in formal discussions to establish a common legal framework to solve these issues. The establishment of an agenda for discussions still lacks the elements upon which to build a common agreement.

The purpose of this paper is to discuss the context of the issue of trans- boundary petroleum fields between Mexico and the USA. It is also to explore the different guidelines where a common agreement could be reached between both countries.

The subjects that will be treated are the following: 1. The legal, institutional, economic and geological context of petroleum exploration and production in Mexico and the USA, with special focus on the Gulf of Mexico. 2. The potential of trans-boundary fields between Mexico and the USA in the Gulf of Mexico and their geological characteristics 3. International experience in similar cases. 4. Areas of potential common agreement between Mexico and the USA 5. Areas of complex internal transformations in Mexico and the USA to satisfy a common agenda 6. Basic guidelines to establish a framework to reach agreement for the trans-boundary oil and gas fields between the USA and Mexico.