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End the moratorium: the Timor Gap Treaty as a model for the complete resolution of the Western Gap in the Gulf of Mexico.



ABSTRACT

The United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area.  and Mexico recently entered into a treaty to delimit de·lim·it   also de·lim·i·tate
tr.v. de·lim·it·ed also de·lim·i·tat·ed, de·lim·it·ing also de·lim·i·tat·ing, de·lim·its also de·lim·i·tates
To establish the limits or boundaries of; demarcate.
 the continental shelf in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico
Golfo de Mexico

Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east
, allowing both countries access to explore and exploit valuable natural resources in the Western Gulf. Included in the treaty is a ten-year moratorium A suspension of activity or an authorized period of delay or waiting. A moratorium is sometimes agreed upon by the interested parties, or it may be authorized or imposed by operation of law.  on oil production within a buffer zone buffer zone
n.
A neutral area between hostile or belligerent forces that serves to prevent conflict.

Noun 1. buffer zone
 that encompasses transboundary reserves.

This Note explores the issues surrounding the buffer zone and suggests a model to resolve the dispute over access to transboundary reserves that will benefit both the United States and Mexico. Part II describes the relevant international law governing the Gulf of Mexico. Part III outlines the background and most recent treaty addressing the Western Gap, and explains the source of each country's claims to the area. Part IV provides a model for resolution by detailing the history of the Timor Gap The Timor Gap is often used to refer an area of ocean between Timor, Indonesia and Australia. In actuality, it refers to a gap in a seabed boundary line which Australia and Indonesia negotiated in 1972 -- the part of the line they could not define because, Portugal, the then-ruler  and introducing the major provisions of the Timor Gap Treaty The Timor Gap Treaty is a treaty between the governments of Australia and Indonesia signed in 1989.

Indonesia moved into East Timor on August 27, 1975 after Portugal withdrew from the mainland because of internal strife.
. Finally, Part V recommends that the United States and Mexico implement a similar joint development scheme, using the Timor Gap Treaty as a model.

I. INTRODUCTION

The United States faces a potential energy crisis. (1) Surging gasoline, natural gas, and electricity prices have been identified as "perhaps the greatest threat to future economic prosperity." (2) California has suffered power problems for several years as a result of the deregulation Deregulation

The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry.

Notes:
Traditional areas that have been deregulated are the telephone and airline industries.
 of the state's electric utility industry, with rolling blackouts Rolling blackout refers to an intentionally-engineered electrical power outage, caused by insufficient available resources to meet prevailing demand for electricity. For information about accidental blackouts that are not intentionally engineered, see power outage.  required in some areas to ration ration

a fixed allowance of total feed for an animal for one day. Usually specifies the individual ingredients and their amounts and the amounts of the specific nutriments such as carbohydrate, fiber, individual minerals and vitamins.
 limited power supplies. (3) Dependence on foreign oil has increased as well. (4) Politicians are arguing over the proper solutions to the nation's perceived energy problems, often engaging in public forum debates over who is responsible and expressing outrage at the existence of the crisis. (5) Even in the 2000 presidential campaign candidates argued over the ramifications ramifications nplAuswirkungen pl  of tapping into emergency reserves and the possibility of oil exploration in the wildlife preserves of Alaska. (6) Following the election, President Bush immediately outlined a legislative proposal that would open the Arctic National Wildlife Refuge The Arctic National Wildlife Refuge (ANWR) covers 19,049,236 acres (79,318 km²) in northeastern Alaska, in the North Slope region. It was originally protected in 1960 by order of Fred A. Seaton, the Secretary of the Interior under U.S. President Dwight D. Eisenhower.  to oil and gas drilling to increase domestic supplies in response to California's electricity crisis. (7) The general consensus is that the United States needs more power, specifically oil and natural gas, and preferably should get it from domestic sources.

The United States has demonstrated an increasing dependence on foreign oil in recent decades to satisfy its energy needs. (8) The Organization of the Petroleum Exporting Countries (OPEC OPEC: see Organization of Petroleum Exporting Countries.
OPEC
 in full Organization of the Petroleum Exporting Countries

Multinational organization established in 1960 to coordinate the petroleum production and export policies of its
) tightly controls its production levels and, in turn, has substantial power to set the global price of oil. (9) Senator Chuck Hagel Charles Timothy "Chuck" Hagel (born October 4, 1946) is the senior United States Senator from Nebraska. A member of the Republican Party, he was first elected in 1996 and was reelected in 2002.  declared that "[w]e are more dependent on OPEC for our oil now than at any time in the history of this country." (10) He sees increased domestic production as a necessary step to reduce U.S. dependence on foreign oil. (11) Domestic consumption has increased, giving fluctuating prices the ability to significantly impact the economy as a whole. (12) As the trade deficit increases, energy consumption is expected to skyrocket sky·rock·et  
n.
A firework that ascends high into the air where it explodes in a brilliant cascade of flares and starlike sparks.

intr. & tr.v.
. (13) Politicians have called for a reduced reliance on Middle East oil, despite the fact that it remains the cheapest available energy source. (14) They have also called for increased exploration and production within U.S. borders, hoping to decrease dependence on OPEC. (15)

One possible area available to domestic producers is the deep-water areas of the Gulf of Mexico, which is believed to hold the fourth largest oil reserve in the world. (16) The Gulf of Mexico is approximately 3.9 million square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable.  and accounts for roughly ninety percent of U.S. offshore oil and gas production. (17) Although domestic oil companies have long explored the shallower depths of the Gulf of Mexico, it has not been technologically or economically feasible until recently to pursue oil and gas in the mineral-rich deep waters "Deep Waters" is a short story by P. G. Wodehouse, which first appeared in the United States in the March 25 1910 issue of Collier's Weekly, and in the United Kingdom in the June 1910 issue of the Strand.  of the Gulf. (18) Furthermore, exploration of this area seems less likely to ignite as much political and environmental heat as development of the Arctic National Wildlife Refuge in Alaska has.

This Note addresses the area known as the "Western Gap," or the "donut zone" or "donut hole," which lies approximately halfway between the Yucatan Peninsula and the United States and considers the potential for oil exploration and development of this area. (19) Parts of the Western Gap are ten thousand feet deep and were not accessible until major production companies made recent technological advances. (20) Given this new technology, many U.S. companies can now access the deep water--or least begin the exploration process--if they follow rigid federal guidelines. (21) Until June 2000, the Western Gap was located outside the boundaries of the treaty between the United States and Mexico and was functionally off-limits for diplomatic and scientific reasons. (22)

In June 2000, the United States and Mexico entered into a treaty that delimited de·lim·it   also de·lim·i·tate
tr.v. de·lim·it·ed also de·lim·i·tat·ed, de·lim·it·ing also de·lim·i·tat·ing, de·lim·its also de·lim·i·tates
To establish the limits or boundaries of; demarcate.
 the continental shelf in the Gulf of Mexico, including the Western Gap. (23) The treaty includes all of the Western Gap, but leaves unresolved a buffer zone that runs along the equidistant e·qui·dis·tant  
adj.
Equally distant.



equi·distance n.
 line separating each country's portion of the Western Gap. (24) A ten-year moratorium is in effect on the buffer zone to allow both sides to determine the best way to divide the reserves that are believed to exist along the actual equidistant line. (25) This Note offers a potential resolution, beneficial to both the United States and Mexico, which would result in an equitable sharing of buffer zone reserves. The suggested solution is to create a zone of cooperation, allowing any and all companies to bid on drilling within the zone. The United States and Mexico would then share the royalties. (26) Such cooperation will inevitably be affected by the Mexican Constitution's current prohibition on private ownership of natural resources. (27) Nevertheless, this Note argues that the principles of the zone of cooperation may still be applied.

A particularly good example of such a zone of cooperation is the Timor Gap Treaty, a joint development regime that controls the development of the deep boundary water in the Timor Sea Timor Sea

An arm of the Indian Ocean between Timor and Australia.

Noun 1. Timor Sea - an arm of the eastern Indian Ocean between Timor and northern Australia
. (28) The Timor Gap Treaty has been successful, both originally between Indonesia and Australia and as recently renegotiated between East Timor East Timor (tē`môr) or Timor-Leste (–lĕsht), Tetum Timor Lorosae, republic, officially Democratic Republic of Timor-Leste (2002 est. pop.  and Australia, and serves as an important model for the settlement of boundary disputes in international waters.

This Note suggests that a joint development scheme, similar to the Timor Gap Treaty, presents a possible solution to the Western Gap buffer In computer science, a gap buffer is a dynamic array that allows efficient insertion and deletion operations clustered near the same location. Gap buffers are especially common in text editors, where most changes to the text occur at or near the current location of the cursor.  zone moratorium. Part II briefly describes the relevant applicable international law governing the Gulf of Mexico. Part III analyzes the background and most recent agreement governing the Western Gap and each country's claim to and interests in the area. Part IV discusses the background and history of the Timor Gap and introduces the major provisions of the Timor Gap Treaty. Finally, Part V recommends that the United States and Mexico implement a similar joint development scheme using the Timor Gap Treaty as a model, while maintaining consideration for the issue of Mexico's nationalized oil regime.

II. THE INTERNATIONAL LAW STANDARD

The Western Gap is considered part of the Continental shelf of the Gulf of Mexico. (29) Because of its location, two international laws may apply. The first is the 1958 Geneva Convention Geneva Convention Declaration of Geneva Global village A standard established in 1864 regarding the conduct of the military towards medical personnel, and obligations of medical personnel during acts of war.  on the Continental Shelf, to which both the United States and Mexico are parties. (30) Article 1 of the 1958 Convention provides that the continental shelf of a coastal state extends beyond the depth of two hundred meters where the depth of the superjacent superjacent /su·per·ja·cent/ (soo?per-ja´sent) located just above.

superjacent

located just above.
 waters admits the exploitation of the natural resources of the shelf. (31)

The second body of international law possibly applicable to the continental shelf of the Gulf of Mexico is the 1982 United Nations Convention on the Law of the Sea For maritime law in general see Admiralty law.
The United Nations Convention on Law of the Sea (UNCLOS), also called the Law of the Sea Convention and the Law of the Sea Treaty (LOST
 (UNCLOS UNCLOS United Nations Convention on the Law Of the Sea ), adopted by the Third United Nations Conference on the Law of the Sea, (32) to which Mexico is a party. (33) The United States, however, refused to sign UNCLOS in 1982 because it contained what the United States considered to be "flaws in the regime it would have established for managing the development of mineral resources Noun 1. mineral resources - natural resources in the form of minerals
natural resource, natural resources - resources (actual and potential) supplied by nature
 of the seabed beyond national jurisdiction." (34) President Reagan, while rejecting the Convention due to its stance on seabed mining, expressly recognized that the balance of interests achieved in the remaining parts of the Convention was in the interests of the United States and the international community as a whole. (35) Thus, the United States accepts that UNCLOS reflects customary international law In addition to treaties and other expressed or ratified agreements that create international law, the International Court of Justice, jurists, the United Nations and its member states consider customary international law  in this respect and has acknowledged that UNCLOS provides a more scientifically based definition of a continental shelf. (36)

Article 76 of the Convention provides that the continental shelf of a coastal state comprises the greater of (1) the area in which the seabed and subsoil subsoil

Layer (stratum) of earth immediately below the surface soil, consisting predominantly of minerals and leached materials such as iron and aluminum compounds. Humus remains and clay accumulate in subsoil, but the teeming macroscopic and microscopic organisms that make
 of the submarine areas extend beyond a country's territorial sea A belt of ocean space adjacent to and measured from the coastal state's baseline to a maximum width of 12 nm. Throughout the vertical and horizontal planes of the territorial sea, the coastal state exercises sovereign jurisdiction, subject to the right of innocent passage of vessels on  throughout the "natural prolongation A legal concept introduced in maritime claims submitted to the United Nations. It is a concept where a nation's maritime boundaries should reflect the 'natural prolongation' of where it's land territory reaches the coast.  of its land territory to the outer edge of the continental margin;" or (2) "the area to a distance of two hundred nautical nau·ti·cal  
adj.
Of, relating to, or characteristic of ships, shipping, sailors, or navigation on a body of water.



[From Latin nauticus, from Greek nautikos, from
 miles from the baselines from which the territorial sea is measured." (37) Under either UNCLOS measurement, the coastal state has exclusive control over the exploration and exploitation of the natural resources, including oil and gas, of the continental shelf. (38)

With respect to the areas beyond two hundred nautical miles from coastal baselines, the 1958 Geneva Convention and UNCLOS provide that certain criteria must be met in order to qualify as a continental shelf. Specifically, a coastal state can establish the shelf's outer boundary to coincide with the outer edge of the continental margin. (39) This requires that the outer edge of the continental margin be physically located further than the two hundred nautical mile limit. (40) This is an exceptional submarine geological formation that is quite rare in the world. (41)

While negotiating the treaty with Mexico on the Delimitation of the Continental Shelf, both the United States and Mexico agreed that all of the seabed and subsoil of the submarine areas beyond the two hundred mile exclusive economic zone limit in the Western Gulf of Mexico met the legal requirements described in both the 1958 Geneva Convention and UNCLOS concerning the continental shelf. (42) This determination prevented the area at issue from being considered part of the "common heritage of mankind," held in trust for the people of the world. (43)

III. THE WESTERN GAP

The drawing by the United States and Mexico of the two hundred nautical mile national territory formed the Western Gap, which is roughly halfway between the Texas coastline and the Yucatan Peninsula to the southeast. (44) The United States formed the boundary following its coastline, while Mexico used its coastline as well as small Mexican islands north of the Yucatan. (45) The result was a gap of approximately 129 nautical miles created by the distance between the opposing coasts: they are more than four hundred nautical miles apart and thus create a space between the respective two hundred nautical mile exclusive economic zones. (46) The total area comprises approximately 5,092 nautical square miles. (47)

A. Background and History of the Dispute

Despite the generally amicable am·i·ca·ble  
adj.
Characterized by or exhibiting friendliness or goodwill; friendly.



[Middle English, from Late Latin am
 relations between the United States and Mexico, both sides historically approach boundary issues delicately. (48) The boundary treatment dates back to the 1848 Treaty of Guadalupe-Hidalgo following the Mexican-American War The Mexican-American War[1] was an armed military conflict between the United States and Mexico from 1846 to 1848 in the wake of the 1845 U.S. annexation of Texas. Mexico did not recognize the secession of Texas in 1836; it considered Texas a rebel province. . (49) In the war, Mexico ceded a large amount of territory to the United States, including Texas and California as well as other western states. (50) Even in modern times, boundary issues have been contentious. (51) Additionally, both countries' motives diverged significantly with respect to resolution of the Western Gap. As a result of these factors, it continues to be important that both the United States and Mexico maintain a perception of sociality between themselves to "heighten height·en  
v. height·ened, height·en·ing, height·ens

v.tr.
1. To raise or increase the quantity or degree of; intensify.

2. To make high or higher; raise.

v.intr.
 their sense of long-term self-interest" and increase their efforts to cooperate. (52)

Maritime boundary negotiations addressing significant portions of the Gulf of Mexico began in 1976 after Mexico established its two hundred nautical mile exclusive economic zone by amending Article 27 of its 1917 Constitution. (53) Text inserted into the Mexican Constitution provided that Mexico would exercise control over an area situated outside the territorial seas and adjacent to them, under the rights and sovereignty and the jurisdiction that the laws of the Congress determined. (54) Any boundary conflicts or overlap with another country's exclusive economic zone would be resolved by agreements with those countries. (55)

While the United States deemed Mexico's demarcation as generally consistent with its interests, diplomatic negotiations Noun 1. diplomatic negotiations - negotiation between nations
diplomacy

convention - (diplomacy) an international agreement

negotiation, talks, dialogue - a discussion intended to produce an agreement; "the buyout negotiation lasted several days";
 began to establish their respective maritime boundaries where the zones overlapped. (56) The line set forth was based on methodology from a previous treaty that created a twelve nautical mile boundary, that being a simplified equidistant line, with equal area tradeoffs, giving full effect to islands. (57) The agreement was incorporated into the Treaty on Maritime Boundaries (TMB TMB Tetramethylbenzidine
TMB Technical Management Board
TMB Twisted Metal: Black (video game)
TMB Third Millennium Bible
TMB Touch My Body (song)
TMB Text Me Back
TMB Too Many Birthdays
), which was signed on May 4, 1978. (58)

Although the TMB was signed by both countries and ratified rat·i·fy  
tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies
To approve and give formal sanction to; confirm. See Synonyms at approve.
 by Mexico in 1979, the U.S. Senate did not ratify ratify v. to confirm and adopt the act of another even though it was not approved beforehand. Example: An employee for Holsinger's Hardware orders carpentry equipment from Phillips Screws and Nails although the employee was not authorized to buy anything.  the agreement until 1997. (59) While the Foreign Relations Foreign relations may refer to:
  • Diplomacy, the art and practice of conducting negotiations between representatives of groups or nations
  • Foreign policy, a set of political goals that seeks to outline how a particular country will interact with other countries of the
 Committee reported favorably on the TBM TBM
abbr.
tactical ballistic missile
 in August 1980, the Treaty was withdrawn from consideration on the Senate floor on September 16, 1980 after questions were raised about the potential for petroleum in the continental shelf. (60) Despite receiving a study of the resources by the U.S. Geological Survey The term geological survey can be used to describe both the conduct of a survey for geological purposes and an institution holding geological information.

A geological survey
 in 1981, no action was taken by the Senate. (61) The "[d]elimitation of the Western Gap became increasingly important to U.S. interests as petroleum exploration has moved into deeper waters." (62) One of the reasons that the U.S. Senate did not take quicker action on the TMB was that the oil industry did not have the capability to drill in 8,200 feet of water until the mid-1990s. (63) Private companies have been drilling in the Gulf of Mexico for many decades, but generally only in the shallower areas of the continental shelf. (64) As technology improved with the advent of ultra-deep drillships, artificial seabeds, and midwater completions, (65) companies pushed the frontier of exploration into deeper waters. (66)

As deepwater technology advanced, the TMB became an issue once again. (67) The Department of Interior urged ratification The confirmation or adoption of an act that has already been performed.

A principal can, for example, ratify something that has been done on his or her behalf by another individual who assumed the authority to act in the capacity of an agent.
 under pressure from the oil industry. (68) Mexico began pressuring for ratification as well because of concerns that deepwater drilling near the boundary threatened to drain off reserves that properly belonged to Mexico. (69) The late opposition leader, Mexico Senator Jose Angel Conchello, popularized the "drinking straw" theory describing the drain off concerns. (70) He suggested that if no agreement was reached, foreign companies would simply drill in the U.S. side and "suck out Verb 1. suck out - remove as if by suction; "aspirate the wound"
aspirate, draw out

remove, take away, withdraw, take - remove something concrete, as by lifting, pushing, or taking off, or remove something abstract; "remove a threat"; "remove a wrapper";
" Mexico's oil. (71) Coupling the U.S. oil industry pressure with Mexico's refusal to begin negotiations on the Western Gap until the U.S. Senate ratified the TMB through an exchange of notes, the Senate finally ratified the Treaty and the two sides exchanged the Instruments of Ratification on November 13, 1997. (72) This agreement paved pave  
tr.v. paved, pav·ing, paves
1. To cover with a pavement.

2. To cover uniformly, as if with pavement.

3. To be or compose the pavement of.
 the way for negotiations over the Western Gap.

1. The U.S. Perspective on the Western Gap Issue

The Minerals Management Service (MMS (Multimedia Messaging Service) An enhanced transmission service that enables graphics, video clips and sound files to be transmitted via cellphones. Developed as part of the 3GPP project, MMS phones are generally backward compatible with SMS and EMS. ) of the Department of the Interior manages U.S. natural gas, oil, and other mineral resources on the Outer Continental Shelf In the federal United States, the Outer Continental Shelf (OCS) consists of the submerged lands, subsoil, and seabed, lying between the seaward extent of the States' jurisdiction and the seaward extent of Federal jurisdiction.  and collects, accounts for, and disburses the annual $4 billion in revenues from onshore and offshore leases. (73) As it pertains to this Note, the MMS is responsible for Outer Continental Shelf leasing, production programs, and royalty management. (74) Over the last few years, the Years, The

the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]

See : Time
 MMS has offered royalty deduction relief to increase drilling in waters deeper than eight hundred meters. (75) While the Department of Interior has great latitude to choose how to lease offshore lands, the standard lease sale involves public notice of the proposed lease blocks followed by competitive bidding Competitive bidding

A securities offering process in which securities firms submit competing bids to the issuer for the securities the issuer wishes to sell.


competitive bidding

1.
 that includes cash bonuses and royalty agreements with the U.S. government. (76) Deepwater leases last twice as long as shallower leases--ten years versus five years in duration. (77) Foreign companies may participate in federal lease sales where reciprocal agreements Reciprocal agreement is an agreement between two U.S. states to allow members of the Bar association from each state to practice in the other. Thus, lawyers who wish to practice in two states do not have to take the bar examination in both states.  allow U.S. nationals to lease in that country. (78)

The MMS pushed for the treaty in support of exploration and development of this portion of the Gulf. (79) By resolving the boundary dispute, the MMS could offer leases to private companies within the Western Gap without risking Mexican protests, which could delay development even further. (80) Also, it should be noted that both the oil industry and the U.S. government were probably aware that Petroleos Mexicanos (PEMEX Pemex
 officially Petróleos Mexicanos

Mexico's state-owned oil company. In 1938 Pres. Lázaro Cárdenas nationalized 17 foreign oil companies to create Pemex, the largest Latin American petroleum company and a major world exporter of fossil fuel.
), Mexico's state oil company, did not have the technology or the funding to develop the Western Gap. It does not seem unreasonable that the United States was at least partially motivated by a desire to "get there first." Thus, the oil companies and the government had great interest in the swift resolution of the Western Gap issue.

2. Mexico's Perspective on the Western Gap Issue

Mexico's urgency to settle the dispute was essentially a defensive tactic. While the United States stands to benefit immediately from the delimitation of the Western Gap, Mexico is technologically behind the U.S. petroleum industry by decades and needs to protect its own reserves from private development. (81) Mexico has witnessed successful deepwater drilling all around their boundaries by the United States and Brazil, and fears it will be taken advantage of or left out of the game. (82) Government officials and politicians in Mexico viewed the delay in finalizing the border as an attempt to rob Mexico of valuable resources. (83) The director of PEMEX's Exploracion y Produccion, Jose Antonio Ceballos, signaled his belief in the importance of a boundary resolution by stating: "Make no mistake, the overwhelming bulk of the hydrocarbon wealth is on the Mexican side of the maritime boundary." (84) Despite Mexico's new leadership and pledge for greater cooperation with the United States, President Vicente Fox faces an uphill battle Uphill Battle was an metalcore band with elements of grindcore and noisecore. The group was based out of Santa Barbara, California, USA. History
Uphill Battle got some recognition releasing their self-titled record on Relapse Records.
 in further dealings with the Western Gap buffer zone and potential transboundary reserves. (85)

Mexico is a country with a proud history, particularly with respect to the Gulf that bears its name. One commentator has declared that "Mexico is a luminary in the constellation of States that have consistently advocated the progressive development, codification The collection and systematic arrangement, usually by subject, of the laws of a state or country, or the statutory provisions, rules, and regulations that govern a specific area or subject of law or practice. , and strengthening of the international law of the sea." (86) Throughout the twentieth century, Mexico has been a leader in implementing new international law models in its own Constitution. (87) It was the first country to establish a two hundred nautical mile exclusive economic zone and to adjust its domestic legislation to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?"
fit, meet

coordinate - be co-ordinated; "These activities coordinate well"
 the 1982 UNCLOS standards by enacting the Federal Oceans Act in 1986. (88) The Federal Oceans Act systemized the previously piece-meal legislation. The most significant provision was Article 27 of the Mexican Constitution, which grants direct ownership of any natural resources to the Mexican government. (89)

The Mexican oil industry was nationalized in 1938. (90) PEMEX, the state oil company, is the world's Fifth largest oil company, the single most important entity in the Mexican economy, and a symbol of Mexican sovereignty and independence. (91) PEMEX is the only oil company allowed in the Mexican oil market, as the Constitution all but prohibits foreign control of energy production. (92) It enjoys a monopoly over exploration and production of all hydrocarbons--all of which are owned by the state. (93)

This circumstance affects the ability of the United States and Mexico to create a joint development scheme in the Western Gap buffer zone. Foreign investment in production of Mexico's constitutional reserves will only be possible if the Mexican Congress allows a mix of public ownership and private development in energy production. (94)

Although the state-run organization has enthusiastic public support from those who see PEMEX as a symbol of sovereignty, President Fox campaigned on a promise to "renationalize" PEMEX by allowing oilfield professionals to run the operations, rather than politicians. (95) President Fox, however, has backed off his efforts to privatize pri·va·tize  
tr.v. pri·va·tized, pri·va·tiz·ing, pri·va·tiz·es
To change (an industry or business, for example) from governmental or public ownership or control to private enterprise: "The strike ...
 PEMEX and plans instead to focus on modernizing and streamlining the oil giant. (96) Although it raised twenty-two billion dollars in 1999--thirty-one percent of Mexico's federal income--PEMEX will have to invest billions to keep up with domestic demand for gasoline and natural gas for commercial and industrial use. (97) Mexico's imports of natural gas from the United States are likely to reach seventeen billion dollars per year this decade, (98) and, remarkably, natural gas is the most liberalized of the energy sectors. (99) While the natural gas sector is partly privatized, it remains tied to PEMEX's actions because the oil monopoly maintains exclusive rights for the extraction and sale of natural gas. (100)

Other energy sectors, such as oil and gas refineries and electricity, have experienced partial privatization privatization: see nationalization.
privatization

Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned
 in the 1990s as well. (101) The question remains, however, whether the Mexican government will part with its monopoly and point of pride. While Mexican politicians have held steadfast, it may not be economically efficient or even viable to try to streamline from within the company. (102) With the Mexican economy suffering and its balance of payments equally poor, the hard-liners should consider the principle of discounted present value and open the doors for private investment. Having a joint interest today is worth far more than having it all twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights.
     2.
 from now when PEMEX is finally capable of extracting the reserves itself.

Mexico remains sensitive to any hint of U.S. interference in their country, and one of the main arguments against selling off PEMEX is that it would likely hand control of sovereign resources over to U.S. companies. (103) However, the benefits of privatization. (104) such as improved growth of the national gross product and substantial private investment, should force Mexico to reconsider its stance. (105) Admittedly the process is politically difficult, but the long-term benefits in the face of staggering costs to overhaul the current system without private investment should outweigh the political expense. (106) Even if full privatization is not possible, the Timor Gap Treaty principles may be successfully applied to the buffer zone of the Western Gap. (107)

B. The Treaty with Mexico on the Delimitation of the Continental Shelf

In November 1997, the U.S. Senate ratified the 1978 treaty with Mexico settling the maritime boundary between the United States and Mexico. (108) That ratification paved the way for subsequent negotiations to determine the boundary in the Western Gap. (109)

The result of Western Gap negotiations was officially named the "Treaty Between the Government of the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire,  and the Government of the United Mexican States on the Delimitation of the Continental Shelf in the Western Gulf of Mexico Beyond 200 Nautical Miles," (110) signed by Secretary of State Madeleine Albright Madeleine Korbel Albright (born May 15 1937) was the first woman to become United States Secretary of State. She was nominated by President Bill Clinton on December 5 1996 and was unanimously confirmed by the United States Senate 99-0. She was sworn in on January 23 1997.  and Mexico's Foreign Minister Rosario Green María del Rosario Green Macías (b. 1941 in Mexico City) is a Mexican economist, diplomat and politician.

She is a former Secretary of Foreign Affairs in the cabinet of Ernesto Zedillo (President of Mexico (1994–2000) and current general secretary of the Institutional
 on June 9, 2000. (111) The accord gave the United States 1,913 square nautical miles, about thirty-eight percent of the total, while Mexico received 3,179 square nautical miles, approximately sixty-two percent of the total. (112) The accord further employed an equidistance e·qui·dis·tant  
adj.
Equally distant.



equi·distance n.
 method as the basis for the demarcation of clear borders, as suggested by the U.S. State A U.S. state is any one of the fifty subnational entities of the United States, although four states use the official title "commonwealth". The separate state governments and the federal government share sovereignty, in that an American is a citizen both of the federal entity and  Department. (113) This equidistance method is consistent with previous U.S. treaties. (114)

The Western Gap Treaty also established a small 1.4 nautical mile buffer zone on each side of the new boundary, to which a ten-year moratorium on oil and gas exploration and production would apply. (115) The size of the buffer zone was statistically calculated to encompass more than ninety-nine percent of the potential transboundary reserves. (116) After the ten-year period, each country could permit exploration and drilling of oil and gas in its respective buffer zone. (117)

It is apparent that the buffer zone moratorium was created "mainly to allay al·lay  
tr.v. al·layed, al·lay·ing, al·lays
1. To reduce the intensity of; relieve: allay back pains. See Synonyms at relieve.

2.
 Mexican nervousness that U.S. companies, who likely will be ready to produce reservoirs earlier that PEMEX, might drain oil or gas from the Mexican side of the boundary." (118) This enabled Mexico to pass the Western Gap Treaty quickly without opposition from their Senate, whose Members have strongly denounced any efforts by the United States to drill anywhere near the boundary. (119) Additionally, the delay "will allow Mexico to form a better idea about the nature and location of the cross-border reserves." (120) While both countries encourage exploration and analysis work during the ten-year period and must share any exploration information with each other, (121) the larger issue of developing the transboundary reserves remains unresolved.

In addition to defining the area governed by the treaty specifically, the preamble A clause at the beginning of a constitution or statute explaining the reasons for its enactment and the objectives it seeks to attain.

Generally a preamble is a declaration by the legislature of the reasons for the passage of the statute, and it aids in the interpretation of
 acknowledges the purpose of the delimitation, "[t]aking into account the possibility that there could exist petroleum or natural gas reservoirs gas reservoir

In geology, a naturally occurring storage area, characteristically a folded rock formation, that traps and holds natural gas. The reservoir rock must be permeable and porous to contain the gas, and it has to be capped by impervious rock in order to form an
 that extend across that continental shelf boundary, and the need for cooperation and periodic consultation between the parties in protecting their respective interests in such circumstances." (122) Article I lists the coordinates of the boundaries, (123) while Article II states the computational bases for the coordinates. (124) Article III prohibits both the United States and Mexico from claiming or exercising sovereign rights or jurisdiction over the seabed and subsoil of the Western Gap. (125)

Article IV sets forth the moratorium at issue in this Note. Specifically, it provides:

1. Due to the possible existence of petroleum or natural gas reservoirs that may extend across the boundary set forth in Article I (hereinafter here·in·af·ter  
adv.
In a following part of this document, statement, or book.


hereinafter
Adverb

Formal or law from this point on in this document, matter, or case

Adv. 1.
 referred to as "transboundary reservoirs"), the Parties, during a period that will end ten (10) years following the entry into force of this Treaty, shall not authorize To empower another with the legal right to perform an action.

The Constitution authorizes Congress to regulate interstate commerce.


authorize v. to officially empower someone to act. (See: authority)
 or permit petroleum or natural gas drilling or exploitation of the continental shelf within one and four-tenths (1.4) nautical miles of the boundary set forth in Article I. (This two and eight-tenths (2.8) nautical mile area hereinafter shall be referred to as "the Area.") (126)

Article IV then provides that the ten-year period may be modified by mutual agreement. (127) Additionally, Article IV requires each country to allow the other to conduct geological and geophysical surveys Geophysical survey refers to the systematic collection of geophysical data for spatial studies. Geophysical surveys may use a great variety of sensing instruments, and data may be collected from above or below the Earth's surface or from aerial or marine platforms.  on its side of the Area to help determine the possible presence and distribution of transboundary reservoirs. (128) Furthermore, the United States and Mexico must share geological and geophysical ge·o·phys·ics  
n. (used with a sing. verb)
The physics of the earth and its environment, including the physics of fields such as meteorology, oceanography, and seismology.
 information in their possession and notify one another of any possible transboundary reservoir. (129)

Article V sets forth periodic meetings to facilitate the sharing of information and, more importantly, to "seek to reach agreement for the efficient and equitable exploitation of such transboundary reservoirs." (130) Both parties must inform the other of any licensing or concession grants or production commencement under Article V, (131) and are also individually responsible for the observation of all terms of the Treaty. (132) Article VI states that each party should consult the other for Treaty interpretation, while Article VII disclaims any prejudice by the Treaty, preserving independence in dealing with internal waters All waters, other than lawfully claimed archipelagic waters, landward of the baseline from which the territorial sea is measured. Archipelagic states may also delimit internal waters consistent with the 1982 convention on the law of the sea.  or the high seas high seas

In maritime law, the waters lying outside the territorial waters of any and all states. In the Middle Ages, a number of maritime states asserted sovereignty over large portions of the high seas.
. (133) Article VIII requires that any disputes be resolved by negotiations, while Article IX merely requires ratification. (134)

The Articles at issue are Articles IV and V, as they set forth the sparse details of the moratorium while requiring efforts to seek an "equitable" resolution of the buffer zone. (135) One possible equitable resolution would be a joint development agreement such as the Timor Gap Treaty.

C. The Effects of the Western Gap Treaty

The Western Gap Treaty successfully resolves a festering fes·ter  
v. fes·tered, fes·ter·ing, fes·ters

v.intr.
1. To generate pus; suppurate.

2. To form an ulcer.

3. To undergo decay; rot.

4.
a.
 issue and benefits both the United States and Mexico, at least in the short term. The United States will benefit almost immediately through lease sale of blocks located on the U.S. side of the boundary. (136) The MMS has already begun offering deepwater Gulf lease sales pursuant to the Outer Continental Shelf Lands Act. (137) The MMS included as many as fifty-three whole or partial blocks in the Western Gap in its March 28, 2001 sale. (138) With an expected 1.53 to 4.39 trillion cubic feet, and a net economic value of $1.2 billion to $3.6 billion contained within blocks, both the oil industry and the United States will enjoy substantial gains. (139)

The blocks or portions of blocks in the buffer zone, however, were excluded from the sale. (140) Through implementation of a joint development scheme such as suggested in this Note, the U.S. stands to gain further if the buffer zone is available for leasing as well.

Mexico, conversely con·verse 1  
intr.v. con·versed, con·vers·ing, con·vers·es
1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak.

2.
, protects its interests from possible development by companies or consortiums of companies other than PEMEX. Pirating concerns are alleviated, particularly in light of the buffer zone. Another important benefit for Mexico is the free information it receives as part of the Western Gap Treaty. (141) Although PEMEX has already carried out seismic studies in an effort to establish the geological characteristics of the Western Gap, it is unclear how detailed the research data actually is. (142) It is more likely that private companies regulated by the MMS on the U.S. side will do more intensive research, and such data will be available to Mexico under the Treaty. Essentially, Mexico can wait for aggressive U.S. companies to do the research for them.

Despite this apparent free ride, Mexico lacks any regulatory power over exploration efforts under the current Treaty. (143) A joint development scheme such as the one suggested in this Note would afford Mexico an opportunity to oversee all efforts concerning the buffer zone.

IV. THE TIMOR GAP TREATY AS A MODEL FOR JOINT DEVELOPMENT

On December 11, 1989, Australia and Indonesia entered into an agreement establishing a provisional zone of cooperation for joint development of seabed resources in the Timor Gap. (144) The resulting Timor Gap Treaty resolved a lengthy dispute between the two countries concerning seabed boundary delimitation. (145)

A. Background and History of the Timor Gap Dispute

The Island of Timor, with an area of approximately seventy-five thousand square miles, is located in the Indian Ocean Indian Ocean, third largest ocean, c.28,350,000 sq mi (73,427,000 sq km), extending from S Asia to Antarctica and from E Africa to SE Australia; it is c.4,000 mi (6,400 km) wide at the equator. It constitutes about 20% of the world's total ocean area.  roughly three hundred miles northwest of Australia. (146) The island is divided into two countries, East and West Timor West Timor is the Indonesian portion of the island of Timor and forms part of the province of Nusa Tenggara Timur, (NTT or East Nusa Tenggara). West Timor's capital and chief port is Kupang. The land area of West Timor is 15,850 km². . Yet despite their shared geography, each country has a decidedly different history and culture. (147) West Timor, once part of the Dutch East Indies Dutch East Indies: see Indonesia. , became part of the Indonesian Republic following World War II. (148) The eastern portion of the island, by contrast, was a Portuguese colony until late 1975 when Indonesia invaded East Timor, incorporating it into the Indonesian Republic as the twenty-seventh province on July 17, 1976. (149)

The Timor Gap was created in 1972 as the result of two events. First, Australia and Indonesia enacted a treaty establishing a seabed boundary in an area east of Papua New Guinea Papua New Guinea (păp`ə, –y  and south of West Timor. (150) Australia was unsuccessful, however, in negotiating a similar treaty with Portugal governing a seabed boundary between itself and East Timor. (151) The success of one negotiation and the failure of the other resulted in a gap in the seabed boundary between East Timor and Australia. (152) Indonesia inherited the boundary dispute when it took control of East Timor in 1975. (153)

In 1974, reports of petroleum discoveries in the Kelp kelp: see seaweed; Phaeophyta.
kelp

Any of about 30 genera of large seaweeds that make up the order Laminariales (brown algae), found in colder seas.
 structure within the Timor Gap region revealed significant oil and gas production potential. (154) This potential for oil discovery made resolution of the Timor Gap issue vital for both Australia and Indonesia. (155) Successful oil recovery in the Gap could ensure Australia's energy independence into the twenty-first century, as their reserves in other areas were dwindling dwin·dle  
v. dwin·dled, dwin·dling, dwin·dles

v.intr.
To become gradually less until little remains.

v.tr.
To cause to dwindle. See Synonyms at decrease.
. (156) Discovery of new reserves was also vital for Indonesia, OPEC's only Asian member. (157) Due to the then-current rate of rising consumption and dwindling reserves, Indonesia faced becoming a net importer of oil by 2001. (158) Because oil companies avoid exploration in disputed territories, the royalties could not be realized until a resolution was reached. Thus, Australia and Indonesia began negotiations to establish a workable boundary. (159)

Australia claimed that the Timor Trough Trough

The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion.
, a submarine trench located approximately forty to seventy nautical miles from and running parallel to the coast of Timor, was a natural boundary and represented the outer edge of the Australian Continental Shelf's natural prolongation. (160) Indonesia, alternatively, claimed that a single continuous continental shelf separated Timor and Australia, and therefore, a median line median line
n.
1. Anterior median line.

2. Posterior median line.
 or equidistant method should be used to delimit the boundary between the countries' opposite territorial sea baselines. (161)

When neither country seemed willing to concede or compromise their respective positions, Australian officials suggested that the negotiations concentrate on a joint development zone. (162) Despite Indonesia's initial reluctance, Australia and Indonesia agreed in principle to implement a joint development zone in October 1985. (163) Although overall relations between the two countries deteriorated in 1986 and impeded im·pede  
tr.v. im·ped·ed, im·ped·ing, im·pedes
To retard or obstruct the progress of. See Synonyms at hinder1.



[Latin imped
 further Timor Gap negotiations, (164) an agreement was finally reached in 1988. (165) On December 11, 1989, the Foreign Ministers of Australia and Indonesia signed the Timor Gap Treaty while flying over the newly created zone of cooperation in the Timor Sea. (166)

B. Recent Developments--The Timor Sea Agreement

In August 1999, East Timor gained its freedom from Indonesian control after a referendum produced an overwhelming mandate for independence. (167) In October of the same year, Indonesia's legislature revoked the annexation annexation, in international law, formal act by which a state asserts its sovereignty over a territory previously outside its jurisdiction. Many kinds of territory have been subject to annexation, chief among them those inhabited by settlers of the annexing power, , paving the way for the establishment of a United Nations Transitional Administration in East Timor The United Nations Transitional Administration in East Timor (UNTAET) provided an interim civil administration and a peacekeeping mission in the territory of East Timor. Its responsibilities included providing a peacekeeping force to maintain security and order; facilitating and  (UNTAET UNTAET United Nations Transitional Administration in East Timor ). (168) As a transitional authority, UNTAET instigated talks between East Timor and Australia to find a more equitable way to share the Timor Sea's wealth. (169) Many politicians and commentators had argued for years that Indonesia's concessions to production companies and Australia under the Timor Gap Treaty had been too generous. (170)

Australia and East Timor renegotiated the Timor Gap Treaty on July 5, 2001. (171) The new agreement changed little in the way of structure of the joint administration of oil and gas development in the Timor Sea, but essentially reapportioned the royalties in the Joint Petroleum Development Area. (172) What had been a fifty-fifty split between Australia and Indonesia was adjusted to a ninety-ten split in favor of East Timor. (173) The new arrangement is expected to provide a minimum of four to five billion dollars in revenues to the fledgling nation of East Timor. (174)

For the purposes of this Note, the most important aspect of the scheme--the Joint Authority overseeing the development in the zone of cooperation--remains unchanged. It thus remains a viable model for the Western Gap.

C. The Timor Gap Treaty

The Timor Gap Treaty (the Treaty) details the joint development scheme of the Timor Gap. The Treaty's main purpose is to establish the actual zone of cooperation in the Timor Gap for the joint exploration and production of its natural resources. (175) The Treaty covers approximately sixty thousand square kilometers and divides the Timor Gap into three areas, labeled A, B, and C. (176) It will remain in effect for at least forty years, or until the parties agree on a permanent boundary. (177)

The boundaries of each area reflect the maximum possible extent of the countries' claims. (178) The northernmost boundary of the entire zone represents the maximum extent of Australia's continental shelf claim, (179) while the southernmost boundary represents the maximum possible extent of Indonesia's two hundred nautical mile exclusive economic zone claim. (180) The eastern and western boundaries are comprised of simplified equidistant lines. (181) The boundaries within the entire zone itself reflect the claims of Indonesia, East Timor, and Australia. (182) The boundary separating Area C, in the north, from Area A, the central part of the zone, represents the fifteen hundred meter isobath. (183) The boundary separating Areas A and B in the south represents the median line between the two countries. (184) East Timor, under the new agreement, has successfully argued that it has sole sovereignty over the majority of the oil and gas reserves in the Zone of Cooperation A (ZOCA) once the sea boundaries were drawn mid-way between the two countries, (185) following international norms under Article 83 of UNCLOS. (186)

Area B is subject to the sole jurisdiction of Australia. (187) Australia must notify East Timor of any petroleum operations (188) and share sixteen percent of the tax revenue generated from the petroleum in this area. (189) Area C is under East Timorese jurisdiction. (190) East Timor, likewise, must notify Australia of any petroleum operations in Area C (191) and share ten percent of the tax revenue. (192) Area A, the central portion of the zone, represents overlapping territorial claims of Australia and East Timor and is subject to joint control. (193) The proceeds generated from oil and gas operations there are shared equally between the two countries. (194) Under the newly renegotiated Timor Sea Agreement, the royalties in the ZOCA will be split ninety-ten in favor of East Timor. (195)

In addition to defining the areas governed, the Treaty provides for the creation of a Ministerial Council and a Joint Authority to oversee the various rights and responsibilities involved in the petroleum exploration in ZOCA. (196) The Council is composed of an equal number of Ministers appointed from each country, (197) and meets alternately in Australia or East Timor as often as necessary, or at least once per year. (198) All decisions of the ministerial council are made by consensus. (199) In addition to overseeing the Joint Authority, the ministerial counsel also has the responsibility to make major decisions and oversee all activities in Area A. (200)

The Joint Authority consists of an equal number of Executive Directors from each country, who are appointed by the Ministerial Council. (201) As with the Ministerial Council, all of the decisions made by the Joint Authority are also made by consensus. (202) Ultimately, the Joint Authority is responsible for managing petroleum exploration and exploitation activities in Area A. Other functions include the awarding of Petroleum Sharing Contracts, the dividing of Area A into contract blocks, and the collection and distribution of proceeds. (203)

The Treaty also provides a detailed Petroleum Mining Code (204) and a Model Petroleum Sharing Contract. (205) The Petroleum Mining Code details the obligations and rights of the Joint Authority and the petroleum contractors. (206) Under this Code, contractors have the right to explore and extract oil while the Joint Authority retains ownership of petroleum extracted until it is loaded into tankers. (207) The petroleum is shared by the Joint Authority and contractor according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 a formula set forth in the Model Production Sharing Contract. (208)

The Model Production Sharing Contract forms the basis for all contracts entered into between the Joint Authority and the various contractors. (209) In addition to providing the production sharing formula, the Model Contract sets forth the standards governing the relinquishment RELINQUISHMENT, practice. A forsaking, abandoning, or giving over a right; for example, a plaintiff may relinquish a bad count in a declaration, and proceed on the good: a man may relinquish a part of his claim in order to give a court jurisdiction.  of petroleum blocks if oil discoveries are not made within specified time periods. (210)

D. Effects of the Timor Gap Treaty

"In addition to resolving a protracted pro·tract  
tr.v. pro·tract·ed, pro·tract·ing, pro·tracts
1. To draw out or lengthen in time; prolong: disputants who needlessly protracted the negotiations.

2.
 territorial dispute A territorial dispute is a disagreement over the possession/control of land between two or more states, or over the possession or control of land by one state after it has conquered it from a former state no longer currently recognized by the occupying power. , the Timor Gap Treaty strengthened previously strained relations between Australia and Indonesia." (211) While several commentators have referred to the Treaty as a "triumph of compromise" (212) and "an imaginative approach to breaking deadlock See deadly embrace.

(parallel, programming) deadlock - A situation where two or more processes are unable to proceed because each is waiting for one of the others to do something.
 in boundary negotiations," (213) the agreement has faced criticism on many levels. (214) Opposition included individual legal actions challenging the Treaty's validity. (215) Portugal immediately sued Australia in the International Court of Justice for its failure to consider the right of self-determination of the East Timorese people The following is a list of notable East Timorese people:
  • Marí Alkatiri
  • Fernando de Araújo
  • Martinho da Costa Lopes
  • Avelino Coelho
  • Tomé Diogo
  • Xanana Gusmão
  • Eurico Guterres
  • Francisco Guterres
  • José Ramos Horta
  • Anna Pessoa Pinto
, but ultimately lost due to Indonesia's refusal to recognize the jurisdiction of the Court. (216) Another challenge was a suit brought in 1994 by three Timorese activists seeking to have the Treaty nullified nul·li·fy  
tr.v. nul·li·fied, nul·li·fy·ing, nul·li·fies
1. To make null; invalidate.

2. To counteract the force or effectiveness of.
 by the Australian High Court. (217) In June 1995 Portugal contested the Treaty's validity. (218) These challenges, however, were not successful. (219)

The new Timor Sea Agreement provides much needed tax revenue for the "first nation of the new millennium." (220) In connection with the Agreement, Australia has also agreed to give East Timor an annual grant of eight million Australian dollars Noun 1. Australian dollar - the basic unit of money in Australia and Nauru
dollar - the basic monetary unit in many countries; equal to 100 cents
 to assist with the nation's resource development. (221)

Since the signing of the Timor Gap Treaty, numerous production-sharing contracts have been approved, seismic surveys have been made, wells have been drilled, and various global oil companies have made several major oil discoveries. (222) Because the Treaty has successfully served its primary purpose and the settlement of a permanent boundary in the near future is unlikely, the Timor Gap Treaty is expected to continue in effect until a more lasting solution is found. (223) East Timor is expected to work with existing arrangements, companies already producing, and companies planning to produce within the next few years. (224)

V. APPLICATION OF THE TIMOR GAP TREATY TO THE BUFFER ZONE MORATORIUM

Despite significant differences in the factual backgrounds, the Timor Gap Treaty serves as a workable model and source of ideas for a solution to the unresolved buffer zone in the Western Gap. In fact, the Timor Gap Treaty may be easier to apply to the Western Gap than it was to the Timor Gap, given the absence of diplomatic wrangling over the legitimacy of the claims. The political issues between Indonesia and the East Timorese, including Australia's contributions, are not present in the unresolved buffer zone. The relationship between the United States and Mexico is positive and cooperative, (225) and no actions such as those perpetrated by Indonesia (226) are present. Furthermore, under the compromised interpretation of UNCLOS by the United States and Mexico, it is highly unlikely that any other nation or international body will successfully challenge the Western Gap Treaty. (227)

A joint resolution would offer quicker access to valuable reserves, while helping Mexico further develop its own Gulf resources. A royalty-sharing agreement would be even more beneficial and arguably ar·gu·a·ble  
adj.
1. Open to argument: an arguable question, still unresolved.

2. That can be argued plausibly; defensible in argument: three arguable points of law.
 more equitable in light of demonstrated cooperation and the scientific technology available to determine the location of reserves, including ownership percentages of transboundary reserves. Almost every well drilled in the Gulf has multiple investors to diversify the risk involved. Each agreement details the percentages owned by each party based on a variety of factors, but most noticeably capital investment. (228)

The Timor Gap Treaty outlines similar profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of , and the new Timor Sea Joint Development Authority has employed the principle of unitization to address transboundary reserve concerns. (229) If Mexico liberalizes its stance on PEMEX, it could benefit tremendously from the current technology already being used by multinational oil companies, receiving royalties without investing its own capital. Obviously, the nationalized regime will not allow for such profit sharing, but a joint development venture limited to the transboundary reserves might afford the perfect opportunity for Mexico to open up its petrochemical industry to private investors. (230) Given the current state of the Mexican Constitution, however, it is essential to consider a joint development agreement in two scenarios: one in which PEMEX remains nationalized, and one where private companies can develop and explore on both sides of the buffer zone.

A. Application to a Privatized Oil Industry

If Mexico were to amend its Constitution to allow private investment in its petroleum resources, the Joint Authority established by the Timor Gap Treaty would apply exactly as defined and practiced in the Timor Gap. Not only would the Joint Authority have oversight power, it would actively control the development on both sides of the buffer zone.

The Timor Gap Joint Authority operates essentially in the same manner as the Department of Interior's MMS. That is, it regulates all aspects of research and development and participates in the royalty share. (231) This would allow both the U.S. and Mexican governments to benefit financially with an optimal return on a nominal investment. By merely overseeing the development while not actually participating in the exploration efforts, the governments get paid through lease bids even if drilling is unsuccessful, as well as receiving royalties if exploration is successful. It is a win-win situation for both nations.

B. Application to PEMEX

Even if PEMEX remains publicly owned Publicly owned can refer to:
  • Public company, a company which is permitted to offer its securities (stock, bonds, etc.) for sale to the general public, typically through a stock exchange
  • Public ownership, of government-owned corporations
, the Timor Gap model is viable. The joint development agreement would employ a joint authority, similar to that established in the Timor Gap Treaty, to oversee the petroleum exploration of transboundary reserves. Essentially, the Authority would be comprised of an equal number of representatives from the United States and Mexico who would use seismic data to equitably divide the transboundary reserves on a percentage basis. This process, called unitization, is done everyday throughout the world in private joint development agreements. (232) This has been particularly successful in capitalistic cap·i·tal·is·tic  
adj.
1. Of or relating to capitalism or capitalists.

2. Favoring or practicing capitalism: a capitalistic country.
 markets and other joint development agreements. (233)

Because the Mexican Constitution prohibits any private party from owning petroleum within Mexico's boundary, a joint authority would admittedly be somewhat limited. Even so, Mexico faces no risk by participating in such a joint authority. Mexico would have guaranteed oversight over the development of transboundary production. Again, having a share of joint development royalties today is worth far more than having it all many years later, according to basic discounted present value analysis. (234)

VI. CONCLUSION

While the Timor Gap Treaty provides a model for joint development, the potential impediment A disability or obstruction that prevents an individual from entering into a contract.

Infancy, for example, is an impediment in making certain contracts. Impediments to marriage include such factors as consanguinity between the parties or an earlier marriage that is still valid.
 of Mexico's nationalized oil monopoly is evident. Obviously, the Joint Authority envisioned would have different duties depending on the constitutional status of PEMEX; however, the model still provides an equitable result for the unresolved buffer zone of the Western Gap of the Gulf of Mexico.

Either way, both countries benefit. The United States benefits by getting quicker access to extremely valuable resources believed to be present in the Western Gap. This is obviously important in light of pressures to increase domestic production in the face of increasingly depleted de·plete  
tr.v. de·plet·ed, de·plet·ing, de·pletes
To decrease the fullness of; use up or empty out.



[Latin d
 resources on-shore as well as offshore in the shallower waters. Mexico has oversight of an area that many believe to be exposed to the risk of pilfering pil·fer  
v. pil·fered, pil·fer·ing, pil·fers

v.tr.
To steal (a small amount or item). See Synonyms at steal.

v.intr.
To steal or filch.
 by U.S. companies, and receives an equity stake in a standard joint development scheme employed by the oil industry on a daily basis. These benefits suggest that the United States and Mexico should amend the current Western Gap Treaty to adopt provisions establishing a joint development agreement specifically modeled after the one provided in the Timor Gap Treaty.

(1.) David Ivanovich, Energy bill draws threat of filibuster filibuster, term used to designate obstructionist tactics in legislative assemblies. It has particular reference to the U.S. Senate, where the tradition of unlimited debate is very strong. It was not until 1917 that the Senate provided for cloture (i.e. , HOUSTON CHRON CHRON Chronicles
CHRON Chronology
., Feb. 27, 2001, at 1, available at 2001 WL 3002295.

(2.) Id. (quoting then-Senate Majority Leader Trent Lott, R-Miss).

(3.) Id.

(4.) William Dorzdiak, Energy Crisis Feared if Oil Prices Gyrate gy·rate
v.
1. To revolve around a fixed point or axis.

2. To revolve in or as if in a circle or spiral.

adj.
In rings; coiled or convoluted.
, WASH. POST (Internet Edition), Nov. 21, 2000, at http://www.washingtonpost.com/wp-dyn/articles/ A46488-2000Nov20.html.

(5.) Id.

(6.) Bush: California Crisis Shows Need for Alaska Oil, HOUSTON CHRON., Jan. 22, 2001, available at http://www.chron.com/cs/CDA/story.hts/politics/803106.

(7.) Id.

(8.) Dorzdiak, supra A relational DBMS from Cincom Systems, Inc., Cincinnati, OH (www.cincom.com) that runs on IBM mainframes and VAXs. It includes a query language and a program that automates the database design process.  note 4.

(9.) Markets & Policy: Capitol Hill, OIL & GAS NEWSL., July 1, 2000, available at 2000 WL 10576927.

(10.) Consideration of Pending Treaties: Hearing of Senate Foreign Relations Comm See comms. ., 106th Cong. 40 (2000) (statement of Sen. Chuck Hagel, Member, Senate Foreign Relations Comm.).

(11.) Id.

(12.) Note the oil crisis in the early 1980s, as well as in 1998, when oil prices fell to $10 a barrel, while current levels are over $30 a barrel. Dorzdiak, supra note 4. For an excellent, detailed overview of the impact oil prices had on U.S. banking and speculative lending in the 1970s and 1980s, see PHILLIP L. ZAIRE, BELLY UP: THE COLLAPSE OF THE PENN SQUARE BANK Penn Square Bank was a large commercial bank located in north Oklahoma City in the 50 Penn Place galleria complex. The bank made its name in high-risk energy loans during the late 1970s and early 1980s Oklahoma and Texas oil boom.  (1985), which focuses on the Penn Square Bank crisis and subsequent bank failures triggered by unstable oil prices and severely speculative lending.

(13.) Dorzdiak, supra note 4. Dorzdiak suggests that oil consumption will increase worldwide from 76 million barrels per day Barrels per day (abbreviated BPD, bbl/d, bpd, bd or b/d) is a measurement used to describe the amount of crude oil (measured in barrels) produced or consumed by an entity in one day.  today to 115 million barrels per day in 2020, with demand doubling by 2030 and quadrupling quad·ru·ple  
adj.
1. Consisting of four parts or members.

2. Four times as much in size, strength, number, or amount.

3. Music Having four beats to the measure.

n.
 by the end of the century. Id.

(14.) Id. This recent development does not consider the argument to increase efforts to reduce oil consumption in exchange for other sources of energy, as nuclear power is still "taboo taboo or tabu (both: tăb`, tə–), prohibition of an act or the use of an object or word under pain of punishment. " in Western countries. Id.

(15.) Note President Clinton's use of the emergency fuel reserve to attempt to lower prices of heating oil in the northeastern United States. See Markets & Policy: Capitol Hill, supra note 9.

(16.) Suggestions to open areas of Alaska were met with strong environmental and political opposition. Ivanovich, supra note 1. U.S. geologists believe that the area could be the "world's 4th biggest oilfield." David B. Sheinbein, Delimitation of the Western Gap Land in the Gulf of Mexico: A Need for Diplomatic Resolution, 6 TUL. J. INT'L & COMP. L. 583, 587 (1998).

(17.) American Petroleum Institute The American Petroleum Institute, commonly referred to as API, is the main U.S. trade association for the oil and natural gas industry, representing about 400 corporations involved in production, refinement, distribution, and many other aspects of the industry. , Energy and the Gulf of Mexico: The Petroleum Industry in the Gulf of Mexico, available at http://www.api.org/ehs/gulf/oldpage.htm.

(18.) See infra [Latin, Below, under, beneath, underneath.] A term employed in legal writing to indicate that the matter designated will appear beneath or in the pages following the reference.


infra prep.
 notes 62-66 and accompanying text.

(19.) Jim Kennett, U.S., Mexico agree on split of Gulf site with oil potential, HOUSTON CHRON., June 3, 2000, at 1, available at 2000 WL 4302627.

(20.) Gerald Karey, US-Mexico Treaty, Never Ratified, Becomes Key in Era of Deepwater GOM GOM - Good Old MAD.

Don Boettner, U Mich. MAD for the IBM 360. Parts of the MTS time-sharing system were written in GOM.
, PLATT'S OILGRAM NEWS, Mar. 20, 1997, at 1, available at 1997 WL 8877920.

(21.) See infra notes 73-76 and accompanying text.

(22.) Kennett, supra note 19.

(23.) U.S., Mexico Approve Gulf Oil Drilling Accord, CHICAGO TRIB TRIB Tributary
TRIB Tire Retread Information Bureau
Trib Chicago Tribune Newspaper
TRIB Transfer Rate of Information Bits (ANSI formula for calculating throughput)
TRIB Transmission Rate of Information Bits
., June 10, 2000, at 20.

(24.) Id.

(25.) Id.

(26.) Mexico has an additional concern given its nationalized oil company. Because PEMEX is the government, Mexico uses its oil reserves Oil reserves refer to portions of oil in place that are claimed to be recoverable under economic constraints.

Oil in the ground is not a "reserve" unless it is claimed to be economically recoverable, since as the oil is extracted, the cost of recovery increases incrementally
 in its valuation of the country as a whole. U.S. Energy Information Administration, Mexico Country Analysts Brief, available at http://www.eia.doe.gov/emeu/cabs/mexifull.html. Simply sharing royalties with the United States may have serious ramifications for the Mexican economy.

(27.) See infra notes 90-93 and accompanying text.

(28.) Lian A. Mito, The Timor Gap Treaty as a Model for Joint Development in the Spratly Islands Spratly Islands, group of about 100 low islands and coral reefs in the central South China Sea, intersecting busy shipping lanes. The whole group is claimed by China, Taiwan, and Vietnam, and parts are claimed by Malaysia and the Philippines. , 13 AM. U. INT'L L. REV. 727 (1998).

(29.) Jorge A. Vargas, The Gulf of Mexico: A Binational bi·na·tion·al  
adj.
Of, relating to, or involving two nations.
 Lake Shared by the United States and Mexico, 9 TRANSNAT'L LAW. 459, 464-65 (1996) (arguing that, based on new scientific data, the Western Gap is actually part of the Continental Shelf rather than deep water that would require a separate international law standard involving the United Nations, essentially preventing bilateral resolution by the United States and Mexico).

(30.) Letter of Submittal, U.S. Dept. of State, Washington D.C., July 5th, 2000, SEN. TREATY DOC. No. 106-39, available at 2000 U.S.T. LEXIS 60, *2 [hereinafter Letter of Submittal].

(31.) Id.

(32.) United Nations Convention on the Law of the Sea, opened for signature, Dec. 10, 1982, U.N. Doc. A/Conf./62/122 (1982), reprinted in 21 I.L.M. 1261.

(33.) Letter of Submittal, supra note 30, at *6.

(34.) Letter from the President to the Senate, Oct. 7, 1994, U.S. Dept. of State Dispatch Supp., Feb. 1995, Vol. 6, No. 1, reprinted in 34 I.L.M. 1396 (Sept. 1995).

(35.) Bernard H. Oxman, Current Developments, United States Interests in the Law of the Sea Convention, 88 AM. J. INT'L L. 167, 168 (1994). He announced that the United States would act in the future in a manner that was consistent with the balance of U.S. interests with the rest of the Convention. Id.

(36.) Letter of Submittal, supra note 30, at *5.

(37.) Id.

(38.) Id.

(39.) Vargas, supra note 29, at 468.

(40.) Id.

(41.) Id. (noting that very few coastal states The U.S. Coastal states are states in the United States that have a coastline. This can be an ocean coast, a gulf coast, or a Great Lake coast. There are twenty three ocean/gulf of Mexico states, and eight Great Lake states. (New York is both an ocean state and a Great Lake state.  have reported such geological formations to UNCLOS).

(42.) Letter of Submittal, supra note 30, at *5-6.

(43.) Dabney Welsh, Access to Our Backyard Our Backyard was a series for pre-school children which aired at lunchtime on ITV from August 1984 until January 1987.It was produced by Granada Television.

The format was simple.
 Reserves: A Final Resolution of the Western Gulf of Mexico's Maritime Boundaries, 23 HOUS HOUS Housing . J. INT'L L. 609, 626-27 (2001) (discussing the history of the UNCLOS and both the Mexican and U.S. interpretation of UNCLOS). Had the area been classified as common heritage, it would not be subject to exclusive regulation between the two countries. Id. Common heritage is not subject to exclusive regulation between two countries. Id.

(44.) Kennett, supra note 19.

(45.) Vargas, supra note 29, at 464. While there was some debate concerning the use of certain islands as the starting point Noun 1. starting point - earliest limiting point
terminus a quo

commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the
 of the EEZs, there was general consensus in 1976, but not official agreement until the 1997 ratification of the TMB. Id. The United States did not object to Mexico's use of the islands north of the Yucatan because it used islands in the Pacific for its own benefit and thus could not realistically oppose Mexico on the issue. Mark B. Feldman & David Colson, The Maritime Boundaries of the United States, 75 AM. J. INT'L L. 729, 743 (1981).

(46.) Feldman & Colson, supra note 45, at 743.

(47.) U.S. and Mexico Sign Treaty Creating Boundary on Continental Shelf in Gulf, FOSTER NAT (Network Address Translation) An IETF standard that allows an organization to present itself to the Internet with far fewer IP addresses than there are nodes on its internal network. . GAS REP., June 15, 2000, at 17, available at 2000 WL 8690245.

(48.) Feldman & Colson, supra note 45, at 743.

(49.) Id.

(50.) Id.

(51.) One example is the issue of water rights in the Rio Grande Rio Grande, city, Brazil
Rio Grande (rē` grän`dĭ), city (1991 pop.
 Valley. James Pinkerton James Pinkerton is a columnist, author, and political analyst. A graduate of Stanford University, he served on the White House staff under both Ronald Reagan and George H.W. Bush and on each of their presidential campaigns. , Bitter Fruit: Valley Citrus Farmers Say Mexico Hoarding Water, Harming Crops, HOUSTON CHRON., Sept. 30, 2001, at A29. Under a 1944 water-sharing treaty that resulted in the construction of two reservoirs on the river, Mexico is required to release water into its tributaries that feed the Rio Grande. Id. Since 1992, Mexico has withheld 1.35 trillion acre-feet of water, citing drought conditions "Drought Conditions" is episode 126 of The West Wing. Plot
Senator Rafferty, a new presidential candidate garnered much media attention with a ground-breaking speech about health care.
. Id. U.S. officials and farmers claim that Mexico is, in fact, hoarding water for its own farmers, demonstrated by the dramatic increase in Mexican agricultural exports since 1992. Id.

(52.) Gary L. Scott et al., Success and Failure Components of Global Environmental Cooperation: The Making of International Environmental Law, 2 ILSA ILSA International Law Students Association
ILSA Iran-Libya Sanctions Act of 1996
ILSA International Lung Sounds Association
ILSA Irish Learning Support Association
ILSA Interstate Labor Standards Association
ILSA Insegnanti Italiano Lingua Seconda Associati
 J. INT'L & COMP. L. 23, 58 (1995).

(53.) Vargas, supra note 29, at 462.

(54.) Welsh, supra note 43, at 615 (quoting Article 27 of the Mexican Constitution).

(55.) Id.

(56.) Vargas, supra note 29, at 462.

(57.) Feldman & Colson, supra note 45, at 743.

(58.) Treaty on Maritime Boundaries, May 4, 1978, U.S.-Mex., 17 I.L.M. 1073 (1978); David B. Sheinbein, supra note 16, at 585. While Mexico ratified the treaty in 1978, the U.S. Senate did not do so until 1997, almost seventeen years later. Id. Sheinbein claims that this failure by the U.S. Senate has contributed to the current lack of resolution for the Western Gap given Mexico's ill will. Id.

(59.) US, Mexico Advance Gulf Treaty Effort, PLATT'S OILGRAM NEWS, Nov. 17, 1997, at 5, available at 1997 WL 8881802.

(60.) Feldman & Colson, supra note 45, at 745.

(61.) US, Mexico Advance Gulf Treaty Effort, supra note 59.

(62.) Letter of Submittal, supra note 30, at *4.

(63.) Jerry Greenberg, Data Ready when Gap Close, Explorer (Oct. 2000), available at http://www.aapg.org/explorer/archives/10_00/western_gap.html.

(64.) KATE VAN DYKE Van Dyke (or van/Van Dijk or Dyk etc) is a surname of Dutch origin. It refers to:
  • Sir Anthony van Dyck, (1599 – 1641), Flemish-born painter who lived in England
  • Barry Van Dyke (born 1951), American actor, son of Dick Van Dyke
, FUNDAMENTALS OF PETROLEUM 74 (1997). The Outer Continental Shelf Lands Act of 1953, as amended in 1978, governs offshore drilling Offshore drilling typically refers to the act of extracting resources, primarily oil, in an ocean or lake. Controversy
As with all oil drilling, there has been a certain level of controversy surrounding the issue.
 beyond the states' inland waters Canals, lakes, rivers, water courses, inlets, and bays that are nearest to the shores of a nation and subject to its complete sovereignty.

Inland waters, also known as internal waters, are subject to the total sovereignty of the country as much as if they were an actual part
. Id.

(65.) William Furlow, US, Mexico about to deal with the boundary "donut hole", OFFSHORE, July 1997, at 60, available at 1997 WL 10234914.

(66.) U.S.-Mexico gulf treaty pressures rising, OIL & GAS J., May 12, 1997, at 34, available at 1997 WL 9574810.

(67.) Id.

(68.) Id. Deepwater is defined as one thousand feet or deeper. Michael Davis Michael Davis or Mike Davis may refer to:
  • Michael Davis (philosopher), (born 1943) author, Professor of Philosophy at Illinois Institute of Technology, areas of interest: philosophy of law, applied ethics, political philosophy, and moral theory
, High interest in deep water, HOUSTON CHRON., Aug. 4, 2000, at 1, available at 2000 WL 24501790.

(69.) Nick Anderson For the editorial cartoonist, see .

Nelison "Nick" Anderson (born January 20, 1968 in Chicago, Illinois) is a retired American basketball player.

He spent thirteen years in the NBA (beginning in 1989), most of them with the Orlando Magic.
, Mexico fears U.S. drillers will siphon off Verb 1. siphon off - convey, draw off, or empty by or as if by a siphon
siphon, syphon

draw, take out - take liquid out of a container or well; "She drew water from the barrel"
 its oil, SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay.  UNION-TRIB., Mar. 31, 1996, at I2. Despite the fact that the Shell Oil Company project was more than twenty miles within the U.S. territorial waters territorial waters: see waters, territorial.
territorial waters

Waters under the sovereign jurisdiction of a nation or state, including both marginal sea and inland waters.
, some Mexicans protested that their sovereignty was at risk. Id.

(70.) Ronald Buchanan, Mexico Sees Progress on Gulf `Donut Hole', PLATT'S OILGRAM NEWS, Mar. 8, 2000, at 2, available at 2000 WL 14094053.

(71.) Id.

(72.) US, Mexico Advance Gulf Treaty Effort, supra note 59.

(73.) MMS Lauds Lauds is one of the two "major hours" in the Roman Catholic Liturgy of the Hours. It is to be recited in the early morning hours, preferably near dawn. Structure of the hour  U.S. and Mexico continental shelf boundary treaty agreement, M2 PRESSWIRE, June 14, 2000, available at 2000 WL 22276453.

(74.) VAN DYKE, supra note 64, at 74.

(75.) Gerald Karey, US details new deep Gulf royalty program, PLATT'S OILGRAM NEWS, Nov. 30, 2000, at 1, available at 2000 WL 14098324.

(76.) Id.

(77.) Id.

(78.) Id.

(79.) MMS, industry praise Gulf of Mexico treaty, ENERGY REP., June 26, 2000, available at 2000 WL 8749077 [hereinafter Industry Praise].

(80.) While the MMS could have applied the treaty provisionally, it is clear that the ratification of the treaty legitimizes U.S. efforts to develop in the deepwater. Gulf of Mexico western gap division agreed, exploration pending, OIL & GAS J., July 10, 2000, at 30, available at 2000 WL 14257607 [hereinafter Exploration Pending].

(81.) See U.S.-Mexico Gulf Treaty Pressures Rising, supra note 66.

(82.) Peter Gall, Mexico, US on Brink of `Doughnut Hole' Deal, OIL DAILY, June 2, 2000, available at 2000 WL 23415903.

(83.) Id.

(84.) Welsh, supra note 43, at 640 (quoting Ronald Buchanan, PEMEX Needs an Elephant Find: Gas Requirement Urgent, PLATT'S OILGRAM NEWS, Apr. 21, 1999, at 2).

(85.) John King, Bush, Fox Pledge Greater Cooperation Between U.S., Mexico (Feb. 16, 2001), at http://www.cnn.com/2001/ALLPOLITICS/02/16/bush.mexico.02/ index.html.

(86.) Jorge A. Vargas, Mexico's Legal Regime Over Its Maine Spaces: A Proposal for the Delimitation of the Continental Shelf in the Deepest Part of the Gulf of Mexico, 26 U. MIAMI Miami, cities, United States
Miami (mīăm`ē, –ə).

1 City (1990 pop. 358,548), seat of Dade co., SE Fla., on Biscayne Bay at the mouth of the Miami River; inc. 1896.
 INTER-AM. L. REV. 189, 238 (1995).

(87.) Id. at 192.

(88.) Id. at 192-93.

(89.) Id. at 194-95.

(90.) Embassy.org, Mexico, available at http://www.countrywatch.com/files/114/ em_topic.asp?TP=ENERG&COUNTRY=114.

(91.) Id.

(92.) Tim Weiner, Bush Goes to Mexico Seeking Power: Electricity, Oil and Natural Gas, INT'L HERALD TRIB., Feb. 13, 2001, available at http://www.iht.com/ articles/10605.html.

(93.) U.S. Dept. of Energy, An Energy Overview of Mexico, available at http://www.fe.doe.gov/international/mexiover.html.

(94.) Id.

(95.) The Upturn Continues, WORLD OIL, Aug. 1, 2000, at 37, available at 2000 WL 18974359.

(96.) Embassy.org, supra note 90.

(97.) Weiner, supra note 92.

(98.) Id.

(99.) United States Energy Information Administration The United States Energy Information Administration (EIA), created by Congress in 1977, is a statistical agency of the U.S. Department of Energy. The agency provides policy-independent data, forecasts, and analyses to promote sound policy making, efficient markets, and public , Mexico (Feb. 2000), at http://www.eia.doe.gov/emeu/cabs/mexifull.html. In 1995 the Mexican Congress approved the Natural Gas Law, modifying the Mexican Constitution, opening the natural gas market to private and foreign investors. Id.

(100.) Id.

(101.) Id.

(102.) See generally Weiner, supra note 92.

(103.) Mexico, U.S. May Solve Gulf Quarrel; Possible Oil Field Split Between Two Nations, TIMES-PICAYUNE, June 3, 2000, at C3, available at 2000 WL 21261710.

(104.) Chile, Argentina, and Brazil exemplify ex·em·pli·fy  
tr.v. ex·em·pli·fied, ex·em·pli·fy·ing, ex·em·pli·fies
1.
a. To illustrate by example: exemplify an argument.

b.
 the positives of natural resource privatization. J. Keith Russell, The Time is Now for the Full Privatization of PEMEX, 20 HOUS. J. INT'L L. 173, 176-79 (1997).

(105.) Id. at 176-77.

(106.) See Weiner, supra note 92 (noting that private investors rarely sink money into state-controlled enterprises).

(107.) If PEMEX remained nationalized, the scope of the joint development plan would be modified slightly. See infra notes 139-42, 229-33 and accompanying text.

(108.) Karey, supra note 20.

(109.) US, Mexico Advance Gulf Treaty Effort, supra note 59. Mexico had made it clear that it was not willing to discuss the Western Gap until the U.S. Senate ratified the TMB. Id.

(110.) Treaty Between the Government of the United States of America and the Government of the United Mexican States on the Delimitation of the Continental Shelf in the Western Gulf of Mexico Beyond 200 Nautical Miles, June 9, 2000, U.S.-Mex., S. TREATY DOC. No. 106-39 (2000) [hereinafter Western Gap Treaty].

(111.) Bob Deans, Agreement on Border Runs Deep; U.S., Mexico Settle Ownership of Sea Bottom That's Apparently Rich in Energy Resources, ATLANTA J. & CONST CONST Construction
CONST Constant
CONST Construct(ed)
CONST Constitution
CONST Under Construction
CONST Commission for Constitutional Affairs and European Governance (COR) 
., June 10, 2000, at 11A.

(112.) Jerry Greenberg, Data Ready when Gap Close, EXPLORER (Oct. 2000), at http://www.aapg.org/explorer/archives/10_00/western_gap.html.

(113.) Welsh, supra note 43, at 649.

(114.) Examples include the Cuba-Bahamas boundary, the U.S. and British Virgin Islands British Virgin Islands

A British colony in the eastern Caribbean east of Puerto Rico and the U.S. Virgin Islands. Road Town, on Tortola Island, is the capital. Population: 21,700.

Noun 1.
 boundary, the Cook Islands and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland.  boundary, and the U.S. and Canadian boundary. See id. at 635-39.

(115.) Id. at 651-52.

(116.) Welsh, supra note 43, at 652; Exploration Pending, supra note 80.

(117.) Industry Praise, supra note 79.

(118.) Exploration Pending, supra note 80.

(119.) Id. Mexico fears that without this buffer zone, the advanced U.S. oil companies would drill as close as possible to the boundary and take reserves from the Mexican side that rightfully belong to Mexico. See id.

(120.) Kennett, supra note 19 (quoting a statement by the Mexican government).

(121.) Id.

(122.) Western Gap Treaty, supra note 110, at 1.

(123.) The continental shelf boundary between the United States of America and the United Mexican States in the Western Gulf of Mexico beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured shall be determined by geodetic lines the shortest line that can be drawn between two points on the elipsoidal surface of the earth; a curve drawn on any given surface so that the osculating plane of the curve at every point shall contain the normal to the surface; the minimum line that can be drawn on any surface between any  connecting the following coordinates:
1.    25 [degrees] 42' 14.1" N.   91 [degrees] 05' 25.0" W.
2.    25 [degrees] 39' 43.1" N.   91 [degrees] 20' 31.2" W.
3.    25 [degrees] 36' 46.2" N.   91 [degrees] 39' 29.4" W.
4.    25 [degrees] 37' 01.2" N.   91 [degrees] 44' 19.1" W.
5.    25 [degrees] 37' 50.7" N.   92 [degrees] 00' 35.5" W.
6.    25 [degrees] 38' 13.4" N.   92 [degrees] 07' 59.3" W.
7.    25 [degrees] 39' 22.3" N.   92 [degrees] 31' 40.4" W.
8.    25 [degrees] 39' 23.8" N.   92 [degrees] 32' 13.7" W.
9.    25 [degrees] 40' 03.2" N.   92 [degrees] 46' 44.8" W.
10.   25 [degrees] 40' 27.3" N.   92 [degrees] 55' 56.0" W.
11.   25 [degrees] 42' 37.2" N.   92 [degrees] 57' 16.0" W.
12.   25 [degrees] 46' 33.9" N.   92 [degrees] 59' 41.5" W.
13.   25 [degrees] 48' 45.2" N.   93 [degrees] 03' 58.9" W.
14.   25 [degrees] 51' 51.0" N.   93 [degrees] 10' 03.0" W.
15.   25 [degrees] 54' 27.4" N.   93 [degrees] 15' 09.9" W.
16.   25 [degrees] 59' 49.3" N.   93 [degrees] 26' 42.5" W.


Id. at 2.

(124.) Id.

(125.) Id. at 3.

(126.) Id.

(127.) Id.

(128.) Id.

(129.) Id.

(130.) Id. at 4.

(131.) Id.

(132.) Id.

(133.) Id. at 4-5.

(134.) Id. at 5.

(135.) See supra notes 125-31 and accompanying text.

(136.) Keely Coghlan, MMS Expects Debut of Western Gap Leases to Attract Bidding Interest at Next Auction, OIL DAILY, Dec. 15, 2000, available at 2000 WL 30361443. As an illustration of the importance of the Gulf lease sales to the U.S. Treasury U.S. Treasury

Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S.
, the three Western Gulf lease sales prior to the August 1997 sale yielded $1.7 billion in high bids. Ray Tyson, Gulf Donut Zone Might Be Hot in Upcoming Sale, PLATT'S OILGRAM NEWS, July 28, 1997. Since 1956, oil and gas production as a whole has generated more than $100 billion for the U.S. Treasury. Id. (examining statistics from MMS measuring from 1956 to 1995).

(137.) Outer Continental Shelf, Central Gulf of Mexico, Oil and Gas Lease Sale 178, Part 1, 66 Fed. Reg. 11,524 (Feb. 23, 2001).

(138.) Id.

(139.) MMS, INSIDE F.E.R.C.'S GAS MARKET REP., Dec. 22, 2000, at 21, available at 2000 WL 13101150.

(140.) Id.

(141.) See supra note 128 and accompanying text.

(142.) Ronald Buchanan, Gulf `Donut Hole' Focus of Study by PEMEX, PLATT'S OILGRAM NEWS, May 22, 1998, at 3, available at 1998 WL 9828172.

(143.) Even though there is a ten-year moratorium on oil and gas exploration and production in the buffer area, each side can conduct its own seismic surveys and prepare for possible exploration. Greenberg, supra note 63. Following the moratorium, each side may permit drilling in its respective buffer zone, but must notify the other when any of the buffer area is made available for drilling. Id. Under the current scheme, Mexico would merely be informed of drilling on the U.S. side. Id.

(144.) Michael Shane French-Merrill, The Role of the United Nations and Recognition in Sovereignty Determinations: How Australia Breached Its International Obligations in Ratifying the Timor Gap Treaty, 8 CARDOZO J. INT'L & COMP. L. 285, 288 (2000).

(145.) Id.

(146.) Mito, supra note 28, at 750.

(147.) IAN IAN Interactive Affiliate Network
IAN i am nothing
IAN Instrumentation & Automation News
IAN Ianuarius (Latin: January)
IAN Instituto Agronomico Nacional (Paraguay)
IAN Incident Area Network
 ROWLAND, TIMOR: INCLUDING THE ISLANDS OF ROTI ROTI Recording Optical Tracking Instrument (telescope for tracking rocket launches)
ROTI Return on Technology Investment (financial analysis of IT intangible factors & total cost of ownership) 
 AND NAO NAO National Audit Office (UK government)
NAO North Atlantic Oscillation
NAO National Astronomical Observatory (Japan)
NAO North American Operations
NAO non-asbestos organic
 21-27 (1992).

(148.) Id. at 26.

(149.) Id. at 22-25; see also Stuart Kaye, The Timor Gap Treaty: Creative Solutions and International Conflict, 16 SYDNEY L. REV. 72, 75 (1994) (noting that in 1978, Australia granted de facto recognition In international law, de facto recognition of a country is unofficial recognition. It is derived from actions and contacts between two states on a political level. These can include:
 of Indonesia's sovereignty over East Timor, despite Australia's initial "unenthusiastic" protest); James K. Kenny, Comment, Resolution III of the 1982 United Nations Convention on the Law of the Sea and the Timor Gap Treaty, 2 PAC. RIM L. & POL'Y J. 131, 134-35 (1993) (discussing that Portugal and the United Nations condemned Indonesia's actions and recognized the right of the Timorese to self-determination).

(150.) Ernst Willheim, Australia-Indonesia Sea-Bed Boundary Negotiations: Proposals for a Joint Development Zone in the "Timor Gap", 29 NAT. RESOURCES J. 821, 822 (1989) (explaining the boundary dispute).

(151.) Id.

(152.)Id.

(153.) Julie M. Sforza, The Timor Gap Dispute: The Validity of the Timor Gap Treaty, Self-Determination, and Decolonization decolonization

Process by which colonies become independent of the colonizing country. Decolonization was gradual and peaceful for some British colonies largely settled by expatriates but violent for others, where native rebellions were energized by nationalism.
, 22 SUFFOLK TRANSNAT'L L. REV. 481, 515 (1999).

(154.) Mito, supra note 28, at 751.

(155.) GEORGE J. ADITJONDRO, IS OIL THICKER THAN BLOOD? A STUDY OF OIL COMPANIES' INTERESTS AND WESTERN COMPLICITY com·plic·i·ty  
n. pl. com·plic·i·ties
Involvement as an accomplice in a questionable act or a crime.


complicity
Noun

pl -ties
 IN INDONESIA'S ANNEXATION OF EAST TIMOR 25 (1999).

(156.) Id.

(157.) Id.

(158.) Id.

(159.) Mito, supra note 28, at 750.

(160.) Willheim, supra note 150, at 822.

(161.) Id.

(162.) Kaye, supra note 149, at 78 (stating that Australian officials first suggested the concept of a joint development zone in 1984).

(163.) Id.

(164.) Mito, supra note 28, at 753.

(165.) Id.

(166.) Id.

(167.) Thalif Deen, East Timor on Track to Statehood state·hood  
n.
The status of being a state, especially of the United States, rather than being a territory or dependency.
, Say Officials, INTER PRESS SERVICE Inter Press Service (abbreviated: IPS) is a global news agency. Its main focus is the production of independent news and analysis about events and processes affecting economic, social and political development. , July 30, 2001, available at 2001 WL 4804793.

(168.) Id.

(169.) Timor's troubled waters, ECONOMIST, Dec. 2, 2000, at 44.

(170.) Id.
   Ignoring Portugal's protests, Australia and Indonesia carved up the Timor
   Sea's wealth evenly between them in a treaty they signed in 1989. The
   treaty was deeply controversial in Australia and beyond, since it
   represented Australia's acknowledgment of Indonesia's illegal occupation of
   East Timor, never accepted by anyone else. The Suharto regime gave
   Australia far more generous terms than they would have got under
   international law.


Id.

(171.) Vandana Hari, Agreement Opens Way for Development of Timor Sea Resources, PLATT'S OILGRAM NEWS, July 6, 2001, at 1, available at 2001 WL 13395624.

(172.) Id.

(173.) Christine Forster, Agreement Reached on Timor Gap Royalty, PLATT'S OILGRAM NEWS, July 5, 2001, at 4, available at 2001 WL 13395703.

(174.) Hari, supra note 171. Overall economic benefits to Australia, however, are expected to far outweigh East Timor's gains, with a possible $25 billion in downstream benefits going to Australia in the next two decades. Id.

(175.) Australia-Indonesia: Treaty on the Zone of Cooperation in an Area Between the Indonesian Province of East Timor and Northern Australia The term northern Australia is generally considered to include the States and territories of Australia of Queensland and the Northern Territory. The part of Western Australia (WA) north of latitude 26° south — a definition widely used in law and State government policy , Dec. 11, 1989, Austl.-Indon., 29 I.L.M. 469 [hereinafter Timor Gap Treaty].

(176.) Id. art. 2.

(177.) Id. art. 33.

(178.) Kaye, supra note 149, at 79.

(179.) Id.

(180.) Note that the Zone of Cooperation is comprised only of the overlapping claims made by both Australia and Indonesia. Mito, supra note 28, at 753-54.

(181.) Id. at 754.

(182.) For a thorough explanation of the changes instituted by the New Timor Sea Agreement, see the Memorandum of Understanding A Memorandum of Understanding (MoU) is a legal document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action and may not imply a legal commitment.  of Timor Sea Arrangement (July 5, 2001), available at http://www.austlii.edu.au/au/other/dfat/special/MOUTSA.html [hereinafter Memorandum of Understanding] signed at Dill on July 5, 2001 by representatives from Australia and the East Timor Transitional Administration. For purposes of easing discussion and because of the pertinent portions of the Treaty remain unchanged, the Treaties will be referred to as a single agreement.

(183.) Kaye, supra note 149, at 79.

(184.) Id.

(185.) Vandana Hari, Revenue Split of 85:15 Eyed for Timor Gap, PLATT'S OILGRAM NEWS, May 14, 2001, at 2, available at 2001 WL 13394859.

(186.) Memorandum of Understanding, supra note 182 (explaining the appropriate delimitation methods under UNCLOS); see also supra Part II.

(187.) Timor Gap Treaty, supra note 175, art. 4(1).

(188.) Id. art. 4(1)(a).

(189.) Id. art. 4(1)(b).

(190.) Id. art. 4(2).

(191.) Id. art. 4(2)(a).

(192.) Id. art. 4(2)(b).

(193.) Id. art. 2(2)(a).

(194.) Id. art. 2(2)(b).

(195.) Forster, supra note 173.

(196.) Timor Gap Treaty, supra note 175, arts. 5(1), 7(1).

(197.) Id. art. 5(2).

(198.) Id. arts. 5(3), 5(4).

(199.) Id. art. 5(5).

(200.) Id. art. 6.

(201.) Id. art. 9(1)(a).

(202.) Id. art. 7(4).

(203.) Id. art. 8.

(204.) Id. ann. B.

(205.) Id. ann. C.

(206.) Id. ann. B, art. 4.

(207.) Id. ann. B, arts. 4(3), 4(4).

(208.) Id. ann. C, 7

(209.) Id. ann. B, art. 5.

(210.) Id. ann. C, 3; Kaye, supra note 149, at 89.

(211.) Mito, supra note 28, at 756.

(212.) Kaye, supra note 149, at 95.

(213.) Mito, supra note 28, at 757.

(214.) ADITJONDRO, supra note 155 (denouncing the agreement on several grounds); Roger S. Clark, Timor Gap--The Legality le·gal·i·ty  
n. pl. le·gal·i·ties
1. The state or quality of being legal; lawfulness.

2. Adherence to or observance of the law.

3. A requirement enjoined by law. Often used in the plural.
 of the Treaty on the Zone of Cooperation in an Area between the Indonesian Province of East Timor and Northern Australia, in EAST TIMOR AT THE CROSSROADS: THE FORGING OF A NATION 73-94 (Peter Carey Peter Carey may refer to:
  • Peter Carey (novelist), (b. 1943), Australian novelist
  • Peter Carey (umpire), Australian rules umpire
  • Peter Carey (footballer), Australian rules player for Glenelg
 & G. Carter Bentley eds., 1995) (challenging the legality of the agreement altogether). It is important to note that the scope of this Note does not address the issues raised by many scholars concerning the political and social issues raised by the Indonesian invasion of East Timor The Indonesian invasion of East Timor, also known as Operasi Seroja, or 'Operation Lotus', began on December 7 1975. With US approval, Indonesian forces launched a massive air and sea invasion using almost entirely US-supplied weapons and equipment.  in 1975 and the subsequent dominance by Indonesia and the legitimacy of the Timor Gap Treaty. Rather, this Note merely looks at the mechanics of the agreement set forth to resolve the territorial dispute that had prevented the exploration of the Timor Gap for petroleum. This Note does not include political discussion of Timor as it is only focused on the Treaty itself as a useful model for governments of various countries facing boundary disputes in international waters.

(215.) ADITJONDRO, supra note 155, at 34.

(216.) Id.; Sonny son·ny  
n. pl. son·nies
Used as a familiar form of address for a boy or young man.



[Diminutive of son.
 Inbaraj, East Timor: Blood and Tears, in ASEAN ASEAN: see Association of Southeast Asian Nations.
ASEAN
 in full Association of Southeast Asian Nations

International organization established by the governments of Indonesia, Malaysia, the Philippines, Singapore, and Thailand in
 109-10 (1995).

(217.) French-Merrill, supra note 144, at 289.

(218.) Id.

(219.) It is unlikely that additional challenges will be brought following the recent independence of the East Timorese and the promise of tax revenue from the renegotiated treaty. See generally supra note 174 and accompanying text.

(220.) Deen, supra note 167 (quoting Sergio Viera de Mello, Special Representative of the U.N. Secretary General).

(221.) East Timor wins its just oil deal, WKLY WKLY Weekly . PETROLEUM ARGUS Argus Media Ltd (formerly known as Petroleum Argus Ltd) is a leading independent provider of price information, market data and business intelligence for the global petroleum, natural gas, electricity and coal industries. , July 9, 2001, at 5, available at 2001 WL 23852683 [hereinafter East Timor Wins].

(222.) Christine Forster, Phillips Reviewing Shell's Timor Scheme, PLATT'S OILGRAM NEWS, Aug. 24, 2001, at 4, available at 2001 WL 13396464.

(223.) East Timor Wins, supra note 221.

(224.) Forster, supra note 173.

(225.) The recent visit by President Bush to Mexico to visit with Mexican President Vicente Fox and discuss multiple areas of cooperation demonstrated a possible trend towards an even closer relationship between the United States and Mexico. King, supra note 85.

(226.) See supra Part IV.

(227.) Vargas, supra note 29, at 475.

(228.) Unitization is the process of calculating the proportionate share of royalties based on ownership interest in the project. VAN DYKE, supra note 64, at 62.

(229.) Forster, supra note 222 (explaining the application of unitization to the Greater Sunrise gas field on the basis that 20% of the field lies within the Joint Petroleum Development Area and 80% within Australian jurisdiction).

(230.) Weiner, supra note 92.

(231.) Timor Gap Treaty, supra note 175.

(232.) Single companies own very few exploration projects, most involve multiple parties as a way to diversify risk. VAN DYKE, supra note 64, at 70. Additionally, joint operating agreements Any contract, agreement, Joint Venture, or other arrangement entered into by two or more businesses in which the operations and the physical facilities of a failing business are merged, although each business retains its status as a separate entity in terms of profits and  make expensive explorations possible because few individual companies could attempt them alone. Id.

(233.) Unitization is a standard part of almost every lease agreement. Id. at 62-64.

(234.) Particularly if the area is as resource rich as it is believed to be.

John Holmes John Holm is a Canadian politician from Sackville, Nova Scotia in the Halifax Regional Municipality.

Holm served as the New Democratic Party Member of the Legislative Assembly for the electoral district of Sackville from 1984 until it was redistributed in 1993, then
, J.D. Candidate, 2002, Vanderbilt University Vanderbilt University, at Nashville, Tenn.; coeducational; chartered 1872 as Central Univ. of Methodist Episcopal Church, founded and renamed 1873, opened 1875 through a gift from Cornelius Vanderbilt. Until 1914 it operated under the auspices of the Methodist Church.  Law School; B.A., The University of the South. This Note is dedicated to the memories of Gay Rue, Randy Smith Randy Smith can refer to any of the following people:
  • Randy Smith (game designer), who worked on the Thief series of games for Looking Glass Studios
  • Randy Smith (basketball), a retired professional basketball player
, Ruby Hardy, and Louise Prowell. The Note could not have been written without the continued love and support of my family and friends. Specifically, I would like to thank my wife for her patience throughout the drafting process and my father for sharing his expertise on the subject.
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Author:Souster, Raymond
Publication:Vanderbilt Journal of Transnational Law
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Date:May 1, 2002
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