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U.S., Mexico Agree on Western Gap Treaty

U.S., Mexico Agree on Western Gap Treaty

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

The Western Gap, which has been a no man's land of sorts for exploration and production activities for nearly 20 years, lies about halfway between the Texas coastline and the Yucatan Peninsula in an area that international law typically has allowed to be divided between bordering countries.

Under the treaty negotiations that were recently concluded, Mexico will receive 62% of the region, and the U.S. portion will be 38%. The two countries first began negotiations over the gap in March 1998, following the U.S. Senate vote in 1997 to accept the 200-mile boundary lines for the two countries. The boundary lines were ratified by the Mexican Parliament in 1979, but the U.S. Senate took no action to ratify them for nearly two decades. Hungry to begin drilling in the 10,000-foot-deep region, the oil and gas industry has watched with interest as the boundary lines were drawn - for good reason. Under the treaty as it was written, a narrow zone has been established on either side of the two countries' boundary lines that makes exploration off limits for the next 10 years. The time element was set because Mexico wants "to form a better idea about the nature and location of the cross-border reserves," according to the Mexican government.

Now that most of the area is open for exploration again, E&P companies already established in the Gulf are expected to become even more active in an area that is expected to be energy rich. Nearly all of the major integrated oil and gas companies, and many large independents, have some type of deepwater exploration now ongoing in the Gulf.

E&P interest picked up in the Western Gap area in 1997 when the U.S. Minerals Management Service (MMS) auctioned off leases in several blocks that overlapped the Gap, an area known as the "doughnut hole." The bids, however, were kept confidential and with no treaty signed, they expired unopened in March 1998. According to MMS, there are about 90 announced Gulf deepwater prospects, and Gulf operators have been setting and surpassing records in water depth and length using improved technology.

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

Carolyn Davis, Houston

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