US Congress Approves Boundary Agreement with Mexico

U.S. Congress approved an agreement Wednesday that would allow the development of energy projects along the U.S.-Mexico maritime border.

The Transboundary Hydrocarbon Agreement between the two nations – which received final approval as part of the budget bill approved by the U.S. House of Representatives and Senate – would establish a cooperative process for managing oil and gas reservoirs along the boundary of the Gulf of Mexico.

The agreement’s passage will provide legal certainty to American companies, which will encourage them to invest in new energy development, creating jobs and spurring economic growth, the American Petroleum Institute said in a Dec. 18 press statement.

To date, offshore oil and gas development in the United States has been largely limited to the western and central Gulf of Mexico, said Erik Milito, API’s director of upstream and industry operations, in a statement. Eighty-seven percent of federal waters are currently off limits to oil and gas exploration and development.

“Opening up new areas in the Atlantic, Arctic, Pacific, and eastern Gulf of Mexico could produce even more energy, job creation and money for the government,” Milito commented.

Offshore Atlantic energy development could generate 280,000 new U.S. jobs and $51 billion in new government revenue, according to a study conducted by Quest Offshore Resources for API.

The U.S. Senate approved the two-year budget deal by 64-36, and sent the bill on to President Obama for his signature, CNN reported late Wednesday afternoon.

In October, the U.S. Senate approved a bill to implement the boundary agreement. In June, the U.S. House of Representatives approved the Outer Continental Shelf Transboundary Hydrocarbons Agreement, (H.R. 1613), which would govern the exploration, development and revenue sharing of oil and gas resources developed along the Gulf of Mexico’s maritime border, opening up 1.5 million acres previously off limits to exploration.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at


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