US, Mexico agree on joint oil projects

US, Mexico agree on joint oil projects

LOS CABOS - Agence France-Presse
US, Mexico agree on joint oil projects

U.S. Secretary of State Hillary Clinton (L) shakes hands with Mexico's Foreign Minister Patricia Espinosa (2nd R) as U.S. Interior Secretary Ken Salazar (2nd L), Mexico's President Felipe Calderon (C) and Mexico's Secretary of Energy Jordy Herrera (R) watch after they signed the United States-Mexico Agreement Concerning Transboundary Hydrocarbon Reservoirs in the Gulf of Mexcio on the sidelines of the G20 foreign ministers summit in Los Cabos, February 20, 2012. REUTERS photo

The United States and Mexico agreed Monday to work together on oil and gas development in the energy-rich Gulf of Mexico, paving the way to end a long-running moratorium on their maritime border.

Under the deal, companies from the United States and Mexico would be encouraged to collaborate on projects over their Gulf maritime boundary but would be able to go ahead on their own if they do not find a partner.

Mexican President Felipe Calderon, signing the agreement with Secretary of State Hillary Clinton in the Pacific resort of Los Cabos, hailed the deal as a new sign of easing the historic distrust between the two countries.

"I will say this with great candor. We are setting aside the old fear that honestly exists among many Mexicans that Mexico's oil could be extracted unilaterally from the other side of the border," Calderon said.

Calderon voiced hope that the agreement would stimulate investment, saying it "provides legal certainty in areas in which there were no clear rules and now there will be incentives for investment." Clinton was visiting Los Cabos for talks of the Group of 20 major economies, where she has voiced concerns about what she saw as unfair advantages enjoyed by state-supported companies.

Mexico's Pemex enjoys a virtual monopoly on the country's energy industry, with historic reluctance to do business with the giant oil companies just across the northern border.

"For the first time, American energy companies will be able to collaborate with Pemex," Clinton said.

"In tough times like these, we need to make the most of every opportunity to create jobs, to foster economic growth and energy security while managing our resources and our environment responsibly for future generations," she said.

Mexican Energy Secretary Jordy Herrera described the agreement with the United States as a new stage in reforms of Pemex which Calderon initiated in 2008.

"All of this is part of a new strategy aimed at making Pemex stronger and more efficient for the benefit of the Mexican people," he said.

The agreement does not specifically authorize new projects but paves the way for cooperation in a potentially energy-rich sliver of the Gulf. US Interior Secretary Ken Salazar said the area was about the size of the small US state of Delaware.

The United States and Mexico signed a treaty in 1978 establishing their maritime border and in 2000 fine-tuned their boundary in an area of the continental shelf.

The 2000 agreement agreed on a 10-year moratorium on development in a 1.4 nautical mile buffer zone which potentially has oil and gas reservoirs that cut into both countries' territory.

During a May 2010 summit in Washington, Calderon and US President Barack Obama agreed to extend the moratorium until January 2014 in the wake of the massive BP oil spill in the Gulf.

The two leaders ordered negotiators to come up with the agreement on trans-boundary resources, which was signed Monday.