(PRWEB) February 03, 2014
The oil and gas industries are currently booming, spurred on by advancements in drill mud and flare gas recovery. Recently, they got even more good news, this time in the form of Congressional approval of a long-awaited drilling agreement with Mexico. This pact comes as part of the newest budget deal, timing that neatly coincides with Mexico allowing foreign corporations to participate in domestic energy exploration.
For now, the actual amount of energy produced under the deal will likely be somewhat small. While state-owned Mexican oil firm Pemex estimates its portion of the gulf houses about 29 billion barrels, the total area of the Gulf of Mexico comprises over 170 million, per the Interior Department's Bureau of Ocean Energy Management. In addition, there are an estimated 304 billion cubic feet of natural gas, an asset that improved flare recovery methods could help producers take advantage of.
The deal, however, is about more than just the immediate amount of resources recovered. It also signals the beginning of what could very well be a highly profitable relationship for U.S. based companies. Between this accord and Mexico's new found openness to foreign drilling companies, experts believe that a wave of investment in the industry could be forthcoming, and with it, consistently high profit margins.
The deal will benefit Americans, as well. In addition to the number of jobs this accord will create, it will also pump back valuable tax revenue into an economy recovering from the effects of recession. It could even lead to further investments on the American side of the gulf, further strengthening oil interests in that area.
One of the hold ups for the pact was the inherent difficulty of allocating resources along the maritime border. Since the 1970s, both sides have been worried that doing this sort of division would be prohibitively difficult, especially with respect to two small portions that are outside of both nations' economic zones. Even drilling that occurs exclusively on the American side of the border could affect Mexico's resources, so scoping out the exact parameters of this agreement was a tricky proposition.
Congress got it done, however. One important breakthrough came last fall, when the American Petroleum Institute (API) ceased its push for an exemption to a provision of the Dodd Frank law, one that would release them companies from having to disclose payments made to foreign governments.
Advocates for this disclosure argued that it cut down on bribery and corruption, while the API purported that it would put U.S. companies at a disadvantage to foreign businesses that aren't operating under the same restrictions. In the end, the API pulled back, citing an interest in making the deal happen in any way possible.
"Congress, then, has rejected disclosure exemptions and reaffirmed the importance of public disclosure of company-by-company payment information for investors and citizens around the world," anti-poverty group Oxfam said of the deal.
Thus, the pact was approved and signed, just days away from of the deadline. Rapid Drilling is excited to see how it may be able to aid in this exciting new era of oil exploration.