First Transboundary GOM Leases Awarded Under New Rules

By Betz Jack 5 Jun 2014

The US Department of the Interior and the US Bureau of Ocean Energy Management (BOEM) have awarded ExxonMobil three offshore leases in the US-Mexico boundary area of the Gulf of Mexico, the first leases subject to the terms of the 2012 US-Mexico Transboundary Hydrocarbon Agreement. 

The agreement governs reservoirs that are split by or close to the boundaries of the US and Mexico. It allows US operators and Mexican state oil company Pemex to explore transboundary reservoirs as single units, encouraging unitization—the process by which multiple leaseholders agree to extract resources through the work of just a single operator. Unitization encourages the drilling of fewer wells, which increases efficiency of production and reduces waste as well as the likelihood of environmental accidents, the agencies said. In cases where a transboundary unitization agreement cannot be reached, parties can each produce as much oil that is calculated to lie on its side of the boundary.

Additionally, the 2012 agreement created a framework allowing each country to regulate activity on its side and inspect the activity of operators on the other side of the boundary. The specifics of this system have not been released.

The ExxonMobil leases sit in the Alaminos Canyon area, about 170 km east of Port Isabel, Texas. The US government estimates that the lease area contains up to 172 million bbl of oil and 304 Bcf of natural gas.

More boundary leases will be up for auction in August 2014. These blocks are located in the Western Gap area of the Gulf of Mexico, north of the continental shelf. 

Jack Betz is a Staff Writer for the Journal of Petroleum Technology.