Gulf leases could hit snag in U.S.

Sept. 21, 2011 at 8:14 AM
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WASHINGTON, Sept. 21 (UPI) -- A small fraction of the blocks up for auction in the Gulf of Mexico could be held up by border talks between the United States and Mexico, an official said.

The United States and Mexico started formal negotiations to draft standards for safe drilling of oil and natural gas reserves that straddle their shared maritime border.

Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, said around 166 of the 3,900 blocks expected to be auctioned this year could be held up by the process.

"We're still hopeful that we can reach an agreement by the end of this year," he was quoted by the Platts news service as saying. "Because that looms out there as a possibility, we needed to figure out how to deal with the small number of lease blocks that would be implicated by a transboundary reservoir."

The BOEMRE said it would keep the bids for blocks 3 nautical miles from the Mexican border sealed until both countries reach agreement.

Bromwich told Platts the potential snag developed because a lease sale and a treaty with Mexico were developing along separate courses within the agency.

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