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Salazar Wants 'Global Gold Standard' for Drilling in Deepwater GOM

In recent talks with Mexican energy and government officials, Interior Secretary Ken Salazar said the United States and its neighbor to the south have begun laying the groundwork for common standards and regulations to govern oil and natural gas drilling in the deepwater Gulf of Mexico (GOM).

The two nations discussed "the importance of moving forward in addressing the Gulf of Mexico in oil and gas development as essentially one pond," Salazar said in a teleconference with reporters following meetings with Mexico's energy and environmental team; the general manager and director of of Mexico's state-owned petroleum company, Petroleos Mexicanos (Pemex); and government officials.

The U.S. and Mexico are making "significant progress" on transboundary issues in the GOM and hope to have an agreement in place by the end of the year, Salazar said. The two countries essentially control 95% of the GOM, according to the Interior Department.

Their talks focused on the "sharing of information and technology and regulations relative to making sure that we move forward safely in oil and gas drilling, and also in [an] environmentally protective way," Salazar said. He noted that Pemex has plans to be active in the deepwater GOM in 2012 and onward.

The U.S. has invited its Mexico counterparts to come to the U.S. in June to "better formalize the agreement on how we move forward with one view and one set of regulations relative to the development of oil and gas in the Gulf of Mexico," he said. "There is no doubt that we are moving forward with a similar policy both in the United States and Mexico" with respect to oil and gas production in the GOM.

The discussions with Mexican as well as Brazilian officials "are all in line with the initiative that the secretary is pursuing to establish a 'global gold standard' for [deepwater] oil and gas drilling," said Interior Deputy Secretary David. J. Hayes.

Toward this aim, Salazar has called for and will host an international blowout containment forum at Interior's headquarters in Washington, DC, on April 14 (see Daily GPI, April 5). Ministers and senior government officials from 13 countries, including Mexico and Brazil, and the European Union are expected to attend.

"The idea [for] the containment forum is to share information...from our...experience with the [blowout of the] Macondo well," which led to the explosion aboard the Deepwater Horizon rig and subsequent oil spill, Hayes said (see Daily GPI, April 22, 2010).

He said an advanced notice of proposed rulemaking will be issued in the "coming months that will request information from all sources as to what sorts of upgrades are appropriate for Gulf blowout preventers," as well as other equipment issues.

"Mexico is responsible for a very large part of the Gulf, and what either country does [in the Gulf] will impact the other," said William K. Reilly, co-chair of the National Commission on the BP Deepwater Horizon Oil Spill and former head of the Environmental Protection Agency. He believes there is every reason for the U.S. and Mexico to have "common standards" with respect to the GOM.

"I was very encouraged to hear yesterday [Monday] the chairman of Pemex indicate an interest in being a part of Marine Well Containment Co. [MWCC]. I'm sure the American oil companies would welcome that," Reilly said.

MWCC was formed last year by Big Oil producers to help respond to well control incidents in the deepwater GOM. Members of the organization include ExxonMobil Corp., Chevron Corp., ConocoPhillips, Anadarko and Royal Dutch Shell plc. BP plc became a member in February (see Daily GPI, Feb. 2; July 23, 2010), and Apache Deepwater LLC joined in March (see Daily GPI, March 18). BHP Billiton came onboard the first of April.

The MWCC's interim well containment system has the capacity to contain up to 60,000 b/d of fluid in up to 8,000 feet of water (see Daily GPI, Feb. 18). Work is under way on an expanded system for delivery in 2012 to handle up to 100,000 b/d of fluid in up to 10,000 feet of water.

Salazar said the sharing of containment capacity was a key issue discussed with Mexican officials.

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