The final remaining maritime boundary treaty between Mexico andthe United States, signed Friday by President Clinton and MexicanPresident Ernesto Zedillo, will give Mexico nearly two-thirds of amineral-rich area that is thought to contain huge amounts ofuntapped oil and gas. Known as the Western Gap, the area has servedas a platform between both countries in the western gap of the Gulfof Mexico, beyond the 200-mile range that officially definesnational territories.

The Western Gap, which has been a no man’s land of sorts forexploration and production activities for nearly 20 years, liesabout halfway between the Texas coastline and the Yucatan Peninsulain an area that international law typically has allowed to bedivided between bordering countries.

Under the treaty negotiations that were recently concluded,Mexico will receive 62% of the region, and the U.S. portion will be38%. The two countries first began negotiations over the gap inMarch 1998, following the U.S. Senate vote in 1997 to accept the200-mile boundary lines for the two countries. The boundary lineswere ratified by the Mexican Parliament in 1979, but the U.S.Senate took no action to ratify them for nearly two decades. Hungryto begin drilling in the 10,000-foot-deep region, the oil and gasindustry has watched with interest as the boundary lines were drawn- for good reason. Under the treaty as it was written, a narrowzone has been established on either side of the two countries’boundary lines that makes exploration off limits for the next 10years. The time element was set because Mexico wants “to form abetter idea about the nature and location of the cross-borderreserves,” according to the Mexican government.

Now that most of the area is open for exploration again, E&Pcompanies already established in the Gulf are expected to becomeeven more active in an area that is expected to be energy rich.Nearly all of the major integrated oil and gas companies, and manylarge independents, have some type of deepwater exploration nowongoing in the Gulf.

E&P interest picked up in the Western Gap area in 1997 whenthe U.S. Minerals Management Service (MMS) auctioned off leases inseveral blocks that overlapped the Gap, an area known as the”doughnut hole.” The bids, however, were kept confidential and withno treaty signed, they expired unopened in March 1998. According toMMS, there are about 90 announced Gulf deepwater prospects, andGulf operators have been setting and surpassing records in waterdepth and length using improved technology.

Shell’s subsea development, named “Mensa,” located in theMississippi Canyon, Block 731, set two world records in July 1997,a world water depth record for production at 5,300 feet and a worldrecord of 68 miles for tieback distance to its host platform inWest Delta Block 143. Other companies have also had remarkablesuccess in deepwater drilling in the Gulf, according to MMS, andthe E&P activity is not expected to slow down. MMS estimatesthat from 1994 through 1998, oil production in the Gulf rose 260%to 159 MMB in 1998.

Carolyn Davis, Houston

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