US-Mexico Oil Treaty Stalls As House Balks At Making Firms Disclose Payments To Foreign Governments

There's a lot of crude oil in the deep waters of the Gulf of Mexico, and US companies might soon be helping Mexico extract the reserves sitting on their territory. But Republicans in the US House of Representatives have been dragging their feet on ratifying a treaty which would encourage binational agreements for oil and gas development near the maritime boundary. That treaty was ratified last year by Mexico and the Obama administration, but House Republicans - who still need to approve it for it to become law - have balked at a provision which would require oil firms to publically disclose payments made to foreign governments.

That transparency measure exists because of the 2010 Dodd-Frank financial law, which among other things, required publically trading companies to disclose what they pay foreign countries in exchange for exploiting oil and natural gas resources. House Republicans have sought to exempt those types of companies from that Security and Exchange Commission rule. The bill on the US-Mexico oil treaty which they passed in late June does just that. But the Senate - which needs to agree on a version of legislation with the House in order for it to then pass to the Obama administration and the Mexican government for ratification - is pushing to implement the version of the pact in which the SEC rule remains intact.

Sen. Ron Wyden (D-Oregon), the Senate's energy committee chairman and one of the sponsors of the that body's measure, urged Congress not to "get bogged down in matters that are simply not relevant to the agreement" and stressing the urgency of the treaty's passage. A moratorium which currently exists for both countries on drilling in the Gulf expires in mid-January; if no treaty is passed by then, oil companies will access the oil and gas resources on what Wyden called a "first-come, first-serve" basis.

"It is the hope that, through this Agreement and the proposed energy reforms in Mexico, the energy revolution the U.S. is currently experiencing can extend throughout the Western Hemisphere," said Wyden. "This would make our region more competitive and less reliant on politically tumultuous states for obtaining energy."

Mexican President Enrique Peña Nieto has been pushing a reform of his country's constitution to allow its state-owned oil company, Pemex, to enter into contracts which would allow foreign firms to access deep-sea and shale reserves on Mexican territory. Those firms possess the technological capacities to get at those reserves which Pemex currently doesn't have. That reform has rattled Mexico's left and much of its public, who fear foreign oil companies will intrude on Mexican sovereignty.

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