[Senate Executive Report 105-4]
[From the U.S. Government Publishing Office]
105th Congress Exec. Rpt.
SENATE
1st Session No. 105-4
_______________________________________________________________________
U.S.-MEXICO TREATY ON MARITIME BOUNDARIES
_______
October 22, 1997.--Ordered to be printed
_______________________________________________________________________
Mr. Helms, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany Ex. F, 96-1]
The Committee on Foreign Relations to which was referred
the Treaty on Maritime Boundaries between the United States of
America and the United Mexican States, signed at Mexico City on
May 4, 1978, having considered the same, reports favorably
thereon with one declaration, and one proviso, and recommends
that the Senate give its advice and consent to the ratification
thereof as set forth in this report and the accompanying
resolution of ratification.
I. Purpose
The Maritime Boundaries Treaty with Mexico is intended to
establish the maritime boundary between the United States and
Mexico for the area between twelve and two hundred nautical
miles off the coasts of the two countries in the Pacific Ocean
and the Gulf of Mexico.
II. Background
In 1970 the United States and Mexico concluded a treaty
that established maritime boundaries for the two countries in
both the Gulf of Mexico and the Pacific Ocean to a distance of
twelve nautical miles. That treaty went into effect in 1972.
Subsequently, Mexico claimed an exclusive economic zone, and
the United States a fisheries management zone, extending 200
nautical miles from their shores. Negotiations to establish
maritime boundaries for these expanded regions resulted in a
provisional agreement in 1976, and mutual satisfaction with
those provisional boundaries led to their incorporation in the
``Treaty on Maritime Boundaries Between the United States of
America and the United Mexican States'' in 1978.
The treaty was submitted to the Senate on January 23, 1979,
together with maritime boundary treaties with Venezuela and
Cuba. The treaty with Mexico replicated the terms of the
provisional agreement of 1976 in four articles. The first
article sets forth the specific geographic coordinates
establishing maritime boundaries in three areas--(1) in the
western Gulf of Mexico eastward from the international boundary
between Texas and Mexico, (2) in the eastern Gulf of Mexico
where the 200-mile zones from Louisiana and Mexican islands off
the coast of Yucatan overlapped, and (3) in the Pacific Ocean
westward from the international boundary between California and
Mexico. The second article describes the legal effect of the
boundaries, providing that neither country shall claim or
exercise sovereign rights or jurisdiction over the waters or
seabed and subsoil of the other country's side of the
boundaries. The third article states that the sole purpose of
the treaty is to establish maritime boundaries between the two
countries and that it does not affect or prejudice either
party's positions on other matters. The fourth article provides
that the treaty will enter into force on the date instruments
of ratification are exchanged.
The Foreign Relations Committee held a hearing on the
treaty with Mexico, along with those for Venezuela and Cuba, on
June 30, 1980, and received testimony from State Department
witnesses (primarily Mark Feldman, Deputy Legal Adviser);
Hollis Hedberg, a professor emeritus of geology at Princeton
University; and two witnesses representing the fishing industry
in California. The latter two witnesses stated that ``the
entire industry that operates on the west coast of California
fully supports ratification of the treaty'' with Mexico, and
the State Department witnesses, of course, also testified in
support of the treaty. But Dr. Hedberg objected to the
methodology used in calculating the maritime boundaries in the
Gulf of Mexico.
Additionally, concern was voiced during the hearing by
Senators Zorinsky and Javits regarding the legal basis for
establishing maritime boundaries on a provisional basis by
executive agreement prior to the ratification of a treaty. The
questions were primarily in regard to the treaty with Cuba
(also considered during the 1980 hearing), which contained a
specific provision providing that the treaty would be applied
provisionally for two years pending ratification. But the 1976
executive agreement with Mexico also remained provisionally in
effect ``pending final determination by treaty of the Maritime
Boundaries between the two countries off both coasts.''
Notwithstanding these matters, on July 24, 1980, the
Committee voted unanimously to favorably report all three
treaties to the Senate. The Committee stated in its report:
It is the Committee's view that ratification of these
agreements will serve important U.S. interests by delimiting
these three maritime boundaries in an equitable manner.
Favorable action on these agreements will ensure that important
U.S. fishery and seabed and subsoil mineral rights are
protected. Moreover, the conclusion of these agreements will
serve U.S. security interests, especially in the Caribbean
region, facilitate law enforcement activities and strengthen
the U.S. negotiating positions in future boundary discussions.
Subsequently, on September 17, 1980, the Senate unanimously
approved the maritime boundary treaty with Venezuela and
returned the boundary treaty with Cuba to the executive
calendar. \1\ The treaty with Mexico was to be considered at
the same time as the treaty with Venezuela, but one day before
that date the treaty was removed from the unanimous consent
agreement providing for consideration of the maritime boundary
and several other treaties. Sen. Javits explained that the
delay was to give several senators time to obtain further
information about the treaty, apparently with respect to the
oil potential of the Gulf of Mexico. Sen. Byrd said that the
treaty would be rescheduled for ``early next week,'' but
further floor action or debate on the treaty never occurred.
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\1\ 126 CONG. REC. S 25722-23 (Sept. 17, 1980). Sen. Helms proposed
an amendment to condition the treaty on the removal of all Soviet
forces from Cuba and the Western Hemisphere. Sen. Zorinsky proposed a
substitute amendment expressing the view that the Soviet influence in
Cuba was a ``grave concern'' to the United States. The Senate refused
to table the Zorinsky amendment by a vote of 35-58, and Sen. Helms
proposed a perfecting amendment to condition the treaty on a
Presidential certification that Cuba was not conducting subversion or
exporting revolution. The Senate agreed to Sen. Byrd's motion to return
to legislative session by a vote of 55-37.
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Since then, the treaty has remained pending before the
Committee on Foreign Relations without further action. Mexico
ratified the treaty in 1978.
The American Association of Petroleum Geologists (AAPG),
which supported the testimony of Dr. Hedberg in 1980, informed
the Committee by letter, dated July 1, 1997, that it no longer
opposes Senate advice and consent to ratification of the
Treaty. Specifically, the President of AAPG informed the
Committee that ``it appears that Dr. Hedberg's long-term goal
of deep water exploration in the Gulf of Mexico can best be
achieved by resolution of this matter.''
III. Summary
Three issues were raised during the Committee's previous
consideration of the maritime boundaries treaty with Mexico--
(1) the method used to calculate the boundaries, (2) the
allocation to Mexico of a large region in the Gulf of Mexico
with an undetermined oil potential, and (3) the legality of the
Administration establishing maritime boundaries on a
provisional basis by means of executive agreements.
On the first two issues the debate concerned whether
islands ought to serve as basepoints for measuring a country's
economic or fisheries zone. The boundaries in the eastern part
of the Gulf of Mexico were calculated in part on the basis that
Mexico's 200-mile claim extended from several Mexican islands
75 miles north of the Yucatan peninsula rather than from the
peninsula itself. That gave Mexico a claim to a larger portion
of the Gulf of Mexico than would have been the case if the
islands were not used as basepoints. Dr. Hedberg, the Princeton
geologist, claimed that it would have been more ``logical and
equitable'' to give each country ``jurisdiction over the water-
covered shelf and slope adjacent to its shores out to the base
of the continental slope'' and then to divide the deep water
area remaining between them equally, a method of calculation
that would have put the maritime boundary further south and
given the United States more of the Gulf. He suggested that the
treaty was based on ``not-yet finalized tentative conclusions
of the Law of the Sea Conference'' which were ``both
inequitable in principle and prejudicial to the interests of
the United States,'' and argued in support of his approach that
``the entire Gulf of Mexico basin is prospective petroleum
territory.''
In response, Mr. Feldman, Deputy Legal Adviser, observed
that not just the eastern Gulf boundary but also the Pacific
boundary was calculated in part using islands as the base point
for measuring the 200-mile zone; but in the latter instance, he
said, the islands, and the benefit from the calculation,
belonged to the United States. The result, he said, was that
the Pacific boundary gave the United States a substantial
region that it would not have obtained using Mr. Hedberg's
methodology, including four banks of great importance for
fisheries--Tanner Bank, Cortez Bank, the 40-Mile Bank, and the
60-Mile Bank. The Gulf area, he said, did not have important
fisheries; but both regions had undetermined ``hydrocarbon
potential.'' Moreover, he asserted, using islands as the
baseline for calculating maritime boundaries was to the U.S.
advantage elsewhere as well, such as between the Florida Keys
and Dry Tortugas and Cuba and the boundary with Canada in the
Gulf of Alaska. He further rejected the claim that the United
States was following Law of the Sea Conference principles,
stating that the principles used were drawn from the Geneva
Convention on the Continental Shelf, from a 1969 decision on
the North Sea Continental Shelf Cases by the International
Court of Justice, and a 1977 Court of Arbitration decision on
an Anglo-French dispute. \2\ Finally, he emphasized that the
boundary treaty was not a theoretical enterprise but was a
negotiated agreement and that it would not have been possible
to get an agreement with Mexico using Dr. Hedberg's principles.
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\2\ In a subsequent article, Mr. Feldman stated that the ``line was
based on the methodology used in drawing the 12-nautical mile maritime
boundary in the 1970 U.S.-Mexico Treaty--a simplified equidistance
line, with equal area tradeoffs, giving full effect to islands.'' See
Feldman & Colson, ``The Maritime Boundaries of the United States,'' 75
A.J.I.L. 729, 743 (1981).
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Senators Zorinsky and Javits both also raised concerns with
the State Department concerning the legality of the provisional
application of maritime boundaries pursuant to executive
agreement rather than treaty. The Administration asserted that
precedent existed for the establishment of provisional maritime
boundaries by executive agreement, that authority to establish
boundaries for fisheries purposes was provided by the Fishery
Conservation and Management Act of 1976, and that the President
had the responsibility under the Constitution for the conduct
of foreign affairs. In reporting the treaties to the Senate,
the Committee expressed its disagreement with these assertions:
* * * [T]he Committee wishes to register its concern on the
issue of provisional application of treaties. The
Administration has argued in its responses to Senator Javits
that the President may apply a treaty provisionally in advance
of Senate advice and consent so long as ``the obligations
undertaken'' are ``within the President's competence under U.S.
law.'' This phrase simply begs the question of how broad such
competence might be. While the Committee does not dispute the
practical necessity of reaching limited practical
accommodations between treaty signatories prior to Senate
action, it does not accept the broad and vague assertions made
by the Administration in its response.
IV. Entry Into Force and Termination
a. entry into force
The Treaty provides that it shall enter into force upon the
exchange of instruments of ratification in Washington, D.C.
(Article IV).
b. termination
The Treaty does not provide for a specific withdrawal date
and cannot be terminated. It is customary practice not to
include a withdrawal mechanism in treaties that delimit
boundaries since these treaties are used as the basis for
granting rights based on the delimitations.
V. Committee Action
As detailed in the background section, the Committee on
Foreign Relations held a public hearing on June 30, 1980, and
unanimously ordered the proposed treaty favorably reported on
July 24, 1980. The treaty was not considered by the full Senate
and was automatically rereferred to the Committee under
paragraph 2 of Rule XXX of the Standing Rules of the Senate. A
second public hearing was held on the proposed treaty on
September 25, 1997. \3\ The hearing was chaired by Senator
Chuck Hagel. The Committee considered the proposed treaty on
October 8, 1997, and ordered the proposed treaty favorably
reported with one declaration and one proviso by voice vote,
with the recommendation that the Senate give its advice and
consent to the ratification of the proposed treaty.
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\3\ The transcript of this hearing may be found in the appendix to
the Committee's report on the Migratory Bird Protocol With Canada and
the Migratory Bird Protocol With Mexico, also filed this day.
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VI. Committee Comments
The Committee favorably recommends the treaty for Senate
advice and consent. Since consideration of this Treaty in 1980
oil and gas exploration has moved closer to the 200 nautical-
mile limits set out in the Treaty. The Committee notes the
untapped reserves of crude oil and natural gas in the Gulf of
Mexico along the 200 nautical mile boundary and the
technological advances that have made it more likely that U.S.
companies will recover these oil and gas deposits. The
Committee believes that ratification of this treaty will
advance the exploration and development of this area.
Beyond the 200 nautical-mile delimitation of both countries
lie two ``donut hole'' or ``gap'' areas that are not addressed
by the Treaty. The Administration has informed the Committee
that following ratification of this Treaty it intends to
propose to Mexico that negotiations begin to delimit the
continental shelf in a portion of the shelf known as the
``western gap.'' Delimitation of the western gap has become
increasingly important to U.S. interests as petroleum
exploration has moved into deeper waters. The Department of
Interior is now receiving bids for exploration in this area.
Several new drilling vessels capable of operating in water
depths of up to 10,000 feet are under construction. The
Committee may have preferred a treaty that addressed the gap
areas in addition to the areas delimited and avoided the need
to address these issues in two separate instruments. However,
given the long delay in ratification, the Committee supports
ratification of the proposed treaty at this time, to be
followed by further negotiations with Mexico to delimit the gap
areas. The Committee urges the Executive Branch to commence
negotiations on the western gap without delay, once this treaty
enters into force.
Finally, the Committee wishes to reiterate the concerns it
expressed during consideration of the Treaty in 1980 regarding
the legality of the provisional application of maritime
boundaries pursuant to executive agreement rather than treaty.
The Administration stated in response to questions for the
record from Senator Helms that establishing provisional
boundaries ``was within executive power vested in the
President.'' The Committee remains concerned about how broad
such competence might be, and questions the legal basis for
this position. The Executive's own testimony suggests that it
has doubts about its legal position in reaching such
``provisional agreements.'' During the Committee hearing on the
treaty, the State Department testified that ``for commercial
reasons industry needs the certainty provided by this
boundary.'' It should go without saying that if the
``provisional agreement'' has a legal basis, then it would
provide the certainty sought by U.S. commercial interests. In
sum, while the Committee does not dispute the practical
necessity of reaching limited practical accommodations between
treaty signatories prior to Senate action, it continues to
object to the broad and vague assertions made by the
Administration.
VII. Resolution of Ratification
Resolved, (two-thirds of the Senators present concurring
therein), That the Senate advise and consent to the
ratification of the Treaty on Maritime Boundaries between the
United States of America and the United Mexican States, signed
at Mexico City on May 4, 1978 (Ex. F, 96-1), subject to the
declaration of subsection (a), and the proviso of subsection
(b).
(a) DECLARATION.--The Senate's advice and consent is
subject to the following declaration, which shall be binding on
the President:
(1) TREATY INTERPRETATION.--The Senate affirms the
applicability to all treaties of the constitutionally
based principles of treaty interpretation set forth in
Condition (1) of the resolution of ratification of the
INF Treaty, approved by the Senate on May 27, 1988, and
Condition (8) of the resolution of ratification of the
Document Agreed Among the States Parties to the Treaty
on Conventional Armed Forces in Europe, approved by the
Senate on May 14, 1997.
(b) PROVISO.--The resolution of ratification is subject to
the following proviso, which shall be binding on the President:
(1) SUPREMACY OF THE CONSTITUTION.--Nothing in the
Treaty requires or authorizes legislation or other
action by the United States of America that is
prohibited by the Constitution of the United States as
interpreted by the United States.
A P P E N D I X
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U.S. Department of State,
Washington, DC 20520,
October 2, 1997.
The Hon. Jesse Helms,
Chairman,
Committee on Foreign Relations,
United States Senate.
Dear Mr. Chairman: Following the September 25, 1997 hearing at
which the Honorable Mary Beth West testified, additional questions were
submitted for the record. Please find enclosed the responses to those
questions.
If we can be of further assistance to you, please do not hesitate
to contact us.
Sincerely,
Barbara Larkin,
Assistant Secretary,
Legislative Affairs.
Responses of Mary Beth West to Questions Asked by Senator Helms
Question 1. The exchange of notes accompanying the treaty stated
that the two parties would recognize the provisional boundaries set
forth in the notes ``pending final determination by treaty of the
Maritime Boundaries between the two countries off both coasts.'' The
Committee opposed the ``provisional'' boundary in 1980. What is the
legal basis for determining maritime boundaries by executive agreement?
Doesn't the fact that the Administration, in its testimony before the
Committee last week, cited the need for ``legal certainty'' as to the
border between the U.S. and Mexico indicate that the ``provisional''
boundary is not an appropriate legal instrument for settling
boundaries?
Answer. The Administration fully acknowledges and respects the role
of the Senate in the treaty making process. The exchange of notes
associated with this treaty, which stated that the two parties would
recognize the provisional boundaries set forth in the notes pending
final determination by treaty, was within executive power vested in the
President, and did not prejudice the prerogatives of the Senate
regarding the provision of advice and consent.
As a practical matter, the Administration has viewed the
provisional boundary reflected in the exchange of notes as a
transitional tool which, pending entry into force of the treaty, has
facilitated the exercise of jurisdiction by each side in its respective
200-mile zone. It should be remembered that, at the time of the
exchange of notes, the United States and Mexico had recently
established their respective 200-mile zones. The provisional boundary
dividing these zones has greatly reduced the likelihood of disputes
concerning, inter alia, where fishing vessels of each country could
operate.
Question 2. The maritime boundaries treaty with Mexico addressed
only those areas in the Gulf where U.S. and Mexican claims overlapped,
and as a result left a gap of about 129 miles between the eastward and
westward boundaries where there was no overlap. That gap was justified
in part on the basis that negotiations over the reach and allocation of
the continental shelf were still in process in the Law of the Sea
proceedings. Is Mexico prepared to negotiate a follow-on treaty
delimiting the ``gap'' areas?
Answer. We have raised the issue of delimiting the continental
shelf in the western gap with Mexican Government officials, and have
been informed that their desire was first to get the 1978 Treaty in
force. It is our intent, at the time instruments of ratification are
exchanged for the 1978 treaty, to propose early talks to establish a
continental shelf boundary in this 129-mile gap.
Question 3. Action on the treaty in 1980 was apparently forestalled
because of concerns about the oil potential of the Gulf region ceded to
Mexico. What is the oil potential of the Gulf Region claimed by Mexico?
By the United States? What is the oil potential of the Pacific Region
claimed by the United States? Of Mexico? Does the technology exist to
exploit that potential? What is the realistic timetable for
exploitation of these regions?
Answer. The resource potential in the boundary areas was discussed
in the 1982 U.S. Geological Survey study submitted to the Committee. A
more recent general assessment for the Gulf of Mexico by the Minerals
Management Service (MMS) did not evaluate the specific boundary areas.
The estimate for the area between 900 meters water depth and the
Sigsbee Escarpment in the Gulf was between 3.0 and 5.4 billion barrels
of oil and 34.2 and 39.4 trillion cubic feet of natural gas. Recent
exploratory drilling elsewhere beyond the Sigsbee Escarpment has
indicated that hydrocarbon accumulations do exist within these
sediments. Thus, the area adjacent to the U.S. Mexico boundary in the
Gulf of Mexico is an area of high potential, as confirmed by recent
industry interest.
The southern California maritime boundary area includes the
prospective Cortes-Velero-Long basins. The U.S. portion of this
boundary area was estimated to contain potential quantities of
undiscovered petroleum resources ranging between 0 and 1.2 billion
barrels of oil and 0 to 3.5 trillion cubic feet of natural gas.
As indicated by recent bidding and exploration activity, current
technology is advancing to allow exploration in the boundary areas.
Such exploration might proceed within a few years after lease issuance.
The timetable is difficult to assess since technology would be unique
to the area, size of discovery, whether it is oil or gas (or both),
etc. In adjacent deeper water areas, development plans propose
production within several years after successful exploration. In
general, we would expect the timing to depend on the size of the
resource discovered.
Question 4. What has been the political impact of the U.S. failure
to ratify the treaty to date? Does Mexico's ratification of the treaty
still stand?
Answer. Mexico ratified the 1978 Treaty in 1979. The political
impact of U.S. failure to ratify has been minor, the Government of
Mexico has considered this a bilateral irritant, and has raised the
issue in discussions with the U.S. Government many times over the last
17 years. The Government of Mexico continues to express an interest in
seeing the U.S. ratify the treaty. We would expect an early exchange of
instruments of ratification and entry into force of the treaty
following the receipt of advice and consent to ratification by the
Senate.
Prepared Statement of the American Petroleum Institute, the Domestic
Petroleum Council, the Independent Petroleum Association of America,
the International Association of Drilling Contractors, the Mid-
Continent Oil and Gas Association, and the National Ocean Industries
Association
Submitted to the Senate Committee on Foreign Relations
Hearing on the Ratification of the
U.S.-Mexico Maritime Boundary Treaty
September 25, 1997
Mr. Chairman and Members of the Committee:
The American Petroleum Institute, the Domestic Petroleum Council,
the Independent Petroleum Association of America, the International
Association of Drilling Contractors, the Mid-Continent Oil and Gas
Association, and the National Ocean Industries Association appreciate
this opportunity to provide the Committee with our views on the
ratification of the U.S.-Mexico Maritime Boundary Treaty. The six trade
associations represent virtually the entire oil and gas exploration and
production and service industry in the Gulf of Mexico.
The U.S. and Mexico signed the Maritime Boundary Treaty in 1978.
Mexico ratified the treaty in 1979; the U.S. Senate considered, but did
not vote on, ratification in 1980. Although the U.S. and Mexico have
continued to honor the provisional boundary, it has become important to
U.S. economic interests that the treaty be ratified. The oil and gas
industry fully supports Senate ratification of the treaty.
Background
In 1978, the U.S. and Mexico signed a maritime boundary treaty
which divided the seabed, subsoil, and water column between the U.S.
and Mexico off the Pacific Coast and in the Gulf of Mexico. The purpose
of the treaty was to establish a permanent maritime boundary and
eliminate overlapping jurisdictional claims between the U.S. and Mexico
for fishing grounds, oil and natural gas, and other natural resources.
Under the treaty, the maritime boundary was drawn as an equidistant
line from the coast lines of the two countries giving full effect to
habitable islands. The treaty divided the areas where Mexican and U.S.
exclusive economic zones (EEZs) overlapped, but left two areas,
referred to as the eastern and western ``donut holes'' or gaps,
unresolved. These two gaps are beyond the 200 mile EEZ claimed by both
countries. (The eastern gap is bounded by U. S., Mexican, and Cuban
EEZs.)
The treaty was submitted to the U.S. Senate in January 1979 for
ratification. On July 24, 1980, the Foreign Relations Committee
unanimously and without reservation recommended ratification of the
treaty to ``ensure that important U.S. fishery and seabed and subsoil
mineral rights are protected.'' The treaty had the strong support of
the U.S. tuna industry because it gave the U.S. jurisdiction over one
of the world's major tuna areas in the Pacific. The treaty was
scheduled for consideration by the full Senate in September 1980 when a
Senator requested that it be pulled from the calendar. A concern had
been raised by Hollis Hedberg, a noted petroleum geologist, that the
U.S. had traded potential Gulf of Mexico oil and gas resources for
fishing grounds off the Pacific Coast. Dr. Hedberg proposed an
alternative geology-based theory for drawing the equidistant line, not
including the use of islands off the coast of the Yucatan Peninsula,
which would have moved the boundary farther south in the Gulf of
Mexico. The Senate requested that the U.S. Geological Survey conduct a
study of petroleum resources in the area, which was completed in 1981.
No further action has been taken on the treaty since that time.
Reasons For Ratification
Consistent With International Law Principles. The principles used by
the State Department in negotiating the maritime treaty were generally
recognized international law principles at the time the treaty was
negotiated and have since been reaffirmed in other negotiations. This
is significant because, if the boundary were being negotiated today,
those same principles of international law would be used and would
result in virtually the same boundary.
Use Of Islands. The principles used in negotiating the boundary were,
and remain, consistent with the general U.S. interest of giving full
effect to islands off the U.S. coast. For example, the boundary
agreement with Cuba gives full effect to the Florida Keys and the Dry
Tortugas. The U.S. has other important island interests, including the
Alexander Archipelago in southeastern Alaska affecting the maritime
boundary with Canada.
U.S. Economic And Energy Interests. When this treaty was last debated,
technology did not exist to allow companies to evaluate or develop the
deeper waters of the Gulf immediately adjacent to the boundary. Today,
industry has the technology to explore for oil and gas in water depths
up to 10,000 feet and to produce hydrocarbons in over 5,000 feet of
water. To ensure the orderly development of these valuable deep water
Gulf of Mexico resources and maximize federal revenues, it is in the
interest of the U.S. to promptly ratify the treaty and to commence
negotiations on the western gap as soon as possible thereafter.
Gap Negotiations. Senate ratification of the treaty will clear the path
for further negotiations between the U.S. and Mexico on the western
gap, a 4.5 million acre unexplored area more than 200 miles from either
country's border which was left undivided in the initial treaty. The
Mexican government has indicated informally to the Department of State
that it will not entertain negotiations over the gaps until the U.S.
ratifies the 1978 agreement. Once resolved, leases within the western
gap could potentially generate significant revenues for the Treasury.
For example, the August 1997 lease sale in the western Gulf of Mexico
generated bids of over $734 million for leases in 800+ meters of water
with $9.1 million being offered for a single deep water lease.
Support For Ratification
Aside from the potential oil and gas resource issue, there was no
opposition to treaty ratification in 1980. Oil and gas interests now
fully support prompt ratification of the treaty. We appreciate the
opportunity to provide these comments.
__________
Prepared Statement of Shell Exploration & Production Company
Submitted to the Senate Committee on Foreign Relations
Hearing on the Ratification of the U.S.- Mexico Maritime Boundary
Treaty
September 25, 1997
Mr. Chairman and Members of the Committee:
Shell Exploration & Production Company through its subsidiaries -
Shell Offshore Inc., Shell Deepwater Development Inc., and Shell
Deepwater Production Inc. - is a leading producer of hydrocarbons and
the largest leaseholder in the Gulf of Mexico. Shell has been operating
in the Gulf of Mexico for four decades. As a major Gulf of Mexico
stakeholder, Shell is pleased to go on record in support of Senate
ratification of the U. S. Mexico Maritime Boundary Treaty.
The United States and Mexico signed a maritime boundary treaty in
1978 which divided the seabed, subsoil, and water column between the
United States and Mexico off the Pacific Coast and in the Gulf of
Mexico. It recently came to industry's attention that the U.S. - Mexico
Maritime Boundary Treaty had not been ratified by the United States
Senate. This led to a thorough review of the issue within industry. As
the attached map clearly depicts, existing offshore leases run from the
shores of Gulf Coast states up to and abutting the provisional maritime
boundary. Given the number of leases in close proximity to the
provisional boundary, it is not surprising that the industry is unified
in its support for prompt treaty ratification.
When this treaty was considered by the Senate almost two decades
ago, oil and gas activities were limited to the shallow waters of the
Gulf of Mexico. Since then, technological advances have opened the
deepwater frontier for petroleum exploration and production leading to
a renaissance in the Gulf of Mexico. The deepwater Gulf has developed
into one of the premiere exploration plays in the world today. Shell
has been a leader in industry's march into deepwater, setting numerous
deepwater records in the process - all in the Gulf of Mexico.
Industry's increased activity level has resulted in thousands of new
jobs and billions of investment dollars flowing into the Gulf Coast
economy and has generated hundreds of millions of dollars in revenue
for the U. S. treasury.
As these deep water activities inch closer and closer to the
provisional boundary, it becomes increasingly important that the Senate
ratify the treaty. This is an issue whose time has come, and Shell
strongly encourages the Senate to ratify the treaty promptly.
Expeditious action by the Senate will complete action on the treaty
itself and will allow Mexico and the United States to begin
negotiations to delimit the western gap, a 4.5 million acre area more
than 200 miles from either country's border left undivided in the
initial treaty. More importantly, ratification of this treaty is in the
best interest of the Nation and is critically important to the Gulf
Coast economy.