Until recently, such an agreement wasn't necessary. Both nations had plenty of shallow-water reserves to keep them occupied. Low oil prices didn't justify the exorbitant costs of deepwater drilling, where a single well can cost $100 million or more.
But exploding crude prices and advances in seismic technology now have oil companies pushing into the farthest reaches of the U.S. gulf. Private operators snapped up a record $3.7 billion worth of leases at Mineral Management Services' March auction, virtually all of them in deep water.
Since 1992, firms have drilled more than 2,100 wells at depths greater than 1,000 feet in the U.S. gulf. Pemex has drilled seven deepwater wells since 2004, none of which is producing, and none is likely to for years.
Therein lies the nation's predicament. Mexico is the world's sixth-largest crude producer, but production is in its fourth straight year of decline. Mexico could become a net oil importer within a decade if it doesn't find new reserves fast.
Cantarell, a shallow-water gulf field in southern Mexico, is drying up after more than a quarter-century of production. April output averaged just over 1 million barrels a day, less than half of its peak in 2003.
Pemex says there are billions of untapped barrels in Mexico's deep waters. But it lacks the capital and know-how to go after them.
A bill being pushed by President Felipe Calderon's administration would make it easier for Pemex to hire the expertise it needs. But deep-water projects cost billions and can take a decade to come on line. Oil majors typically want a share of any crude that they find -- a standard industry practice forbidden by Mexico's constitution.
It's unclear whether a constitutional change would be necessary to let Mexico forge a unitization agreement with the United States. But industry experts said a deal would make sense for both sides.
Companies working in U.S. waters wouldn't have to worry about Mexico taking legal action if it were determined that Mexican crude was ending up in their wells. International law and commercial custom dictate that communal reservoirs be shared. But the U.S. has not ratified a key United Nations treaty on maritime law, which could complicate Mexico's effort to pursue any complaint over pilfered crude.
Nevertheless, oil companies don't like surprises, said Michelle Foss, chief energy economist at the University of Texas at Austin's Bureau of Economic Geology. "You're not going to put a billion dollars at risk if . . . you might have to suspend operations because of an international dispute," she said.
