Bilateral offshore oil exploration agreement with Mexico already obligates US to participate in Article 82 revenue sharing agreement

The settlement we made with Mexico now makes it possible for leases in the Gulf of Mexico issued by the Department of the Interior’s Minerals Management Service (MMS) to be subject to the Article 82 “Revenue Sharing Provision” calling for the payment of royalties on production from oil and natural gas leases beyond the EEZ. According to MMS, seven leases have been awarded to companies in the far offshore Gulf of Mexico which include stipulations that any discoveries made on those leases could be subject to the royalty provisions of Article 82 of the Convention. MMS also reports that one successful well has been drilled about 2.5 miles inside the U.S. EEZ. Details on how the revenue sharing scheme will work remain unclear, and without ratification the U.S. Government’s ability to influence decisions on implementation of this provision is limited or non-existent. This creates uncertainty for U.S. industry.