US, Mexico sign oil and gas agreement for Gulf of Mexico

Feb 21, 2012, 2:07 GMT

Washington - The United States and Mexico agreed Monday to develop oil and gas reserves along their maritime border in the Gulf of Mexico.

The area contains an estimated 172 million barrels of oil and extensive natural gas deposits, the White House said.

US Secretary of State Hillary Rodham Clinton and Mexican Foreign Minister Patricia Espinosa signed the agreement in Los Cabos, Mexico, where the foreign secretaries of the Group of 20 ended a two-day gathering Monday.

The groundwork for the deal was laid in May 2010 when Presidents Barack Obama and Felipe Calderon committed to jointly develop transboundary reservoirs.

'With this, we are setting aside the old fear that honestly exists among many Mexicans that Mexico's oil could be extracted from the other side,' Calderon said.

'Any joint reservoir will be jointly exploited,' he said, adding that both countries would benefit.

The agreement would create incentives for US energy companies to work jointly with Mexico's state-owned Petroleos Mexicanos, or Pemex, which has struggled to make capital investments in its ageing infrastructure.

US Interior Secretary Kenneth Salazar called the agreement a historic step that 'opens the door to previously off-limits areas in the Gulf of Mexico.'

The estimated 600,000-hectare area had 'essentially been under a moratorium' because of the uncertainty about who owned the resources and how potential revenue would be shared, Salazar said.

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