U.S.-Mexico deal on expanded Gulf oil drilling still in limbo

Mon Apr 29, 2013 12:27pm EDT
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By Roberta Rampton

WASHINGTON, April 29 (Reuters) - More than a year after the United States and Mexico signed a much-lauded deal that would remove obstacles to expanding deepwater drilling for oil in the Gulf of Mexico, the agreement still has not been finalized by the United States.

The delay, for which people close to the administration blame Congress while Republicans in Congress blame the administration, is certain to be discussed when President Barack Obama visits Mexican President Enrique Pena Nieto in Mexico City on Thursday.

Mexico immediately ratified the pact in April 2012, but the United States has so far been unable to pass a simply worded, one-page law to put the agreement into force.

The deal, formally known as the Transboundary Hydrocarbons Agreement, provides legal guidelines for deepwater drilling in the 1.5 million acres (600,000 hectares) of the Gulf that straddle the U.S.-Mexico boundary.

It is seen as the key to opening a new era of cooperation on oil production between the two countries. Mexico's state-owned oil company Pemex needs technology and investment to boost its stagnant production, and U.S. companies are eager to help.

"The U.S. has a real opportunity now to put energy back on the agenda with Mexico in a way that it really hasn't been able to be on the agenda for the last several years," said Neil Brown, who worked on the issue during the last Congress as lead Republican international energy aide in the Senate.

But the final step of implementing the deal has languished.

"I'm not aware of strong opposition to it. I think it's been a little more inertia," said Jason Bordoff, a top energy official at the White House until January who now runs Columbia University's Center on Global Energy Policy.   Continued...