An agreement between the U.S. and Mexico is prompting U.S. oil and gas offshore operators in the Gulf of Mexico to brush up on their Spanish.
The passage of H.R. 1613 in the U.S. House of Representative is expected to establish a transboundary agreement to allow joint energy development projects between U.S. energy companies and the Mexican state owned oil company, Pemex.
According to the American Petroleum Institute (API) the agreement will develop more resources, create more jobs and enhance our energy security.
The bill covers approximately 1.5 million acres of the U.S. Outer Continental Shelf. It is estimated to house 172 MMB of crude oil and 304 BCF of natural gas, or 223 MMBOE.
The bill has been a topic of controversy. Democrats accounted for the majority of the votes against the bill that passed with a vote of 256 to 171. The main complaint that democrats and President Obama have against the bill is a provision in the bill that allows companies to bypass reporting their payments to foreign governments. The law, SEC 1504, was first created to curb corruption and secrecy in countries with high amounts of resources.
The API however believes that if American companies are required to report proprietary information, global competitors will grab hold to the information and cost America jobs and limit access to energy resources abroad.
The Senate is looking over a similar bill to the H.R. 1613, but without the provision, causing the House and Senate to clash. With or without a provision, the bill can be used as a catalyst for merged growth and production in offshore drilling.
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