US budget paves way for US-Mexico pact approval
US budget paves way for US-Mexico pact approval
Luke Johnson
11 December 2013 21:34 GMT
Democrats and Republicans in the US came together to unveil a proposed budget that could keep the oil-producing country from another damaging government shutdown early next year and that has significant implications for the oil and gas industry.
Among the most substantial energy-related budget proposals in an approval of the US-Mexico Transboundary Agreement, which would set up a framework to explore, develop, and share revenue from oil and gas resources that sit along the maritime boundary between the countries in the Gulf of Mexico.
The treaty would open the door for co-operation in the 1.5 million-acre area between US explorers and Mexico's national oil company Pemex by encouraging commercial unitisation agreements.
The agreement, originally signed by the North American neighbours in 2012, has yet to be ratified by the US legislature. Both the Senate and the House of Representatives approved the treaty earlier in October, but full ratification was stalled due to a provision in the House version that exempted US-based oil companies from disclosing fiscal payments to foreign governments.
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