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Exclusive: Mexico fears BP spill to hit shores by year-end

MEXICO CITY (Reuters) - Mexico expects oil from BP Plc's BP.LBP.N damaged Gulf of Mexico well to reach its shores by December, and is considering how to sue the company for any environmental damage, Mexico's environment minister told Reuters.

The gushing well, off Louisiana, is about 500 miles from the nearest point on Mexico’s coast, but changing currents could bring oil tar balls and sick or dying sea turtles drifting toward its shores.

Environment Minister Juan Elvira said Mexico is trying to add to its stocks of oil booms and netting, a tough task because the United States has used up most of the gear to protect its coastline, to try to capture oil that will start drifting south when sea currents change in October.

The equipment will be deployed by the navy to protect the country’s sandy beaches and delicate mangrove forests when the oil comes to its shores.

“We think it will be in the month of December, not before, according to our simulations,” Elvira said in an interview late on Wednesday.

The BP disaster is prompting Mexico to consider tightening environmental rules for its own deep water drilling plans, Elvira said. New regulations could slow down the process of issuing incentive-based contracts for private companies wanting to partner with state oil company Pemex PEMX.UL.

Weather experts predict an unusually active hurricane season that could disperse the oil with potentially disastrous consequence for Mexico.

Many Gulf of Mexico turtles and birds migrate back and forth between the U.S. coast and Mexico, and turtles who have swallowed oil from the slick can die a slow and agonizing death from internal organ damage, Elvira said.

The blow to turtles could set back years of conservation programs in Mexico, which has protected hatcheries up and down its coasts for the often endangered species to lay eggs.

If scientists can prove the BP oil spill causes measurable harm to Mexico’s ecosystems, the country may sue BP. “We are looking for the most appropriate legal instruments to sue BP for impacting biodiversity,” Elvira said.

London-based BP already faces a criminal investigation and lawsuits over the April 20 explosion on the Deepwater Horizon oil rig that killed 11 workers and triggered the worst oil spill in U.S. history.

The company has spent more than $1 billion so far on cleaning up the sticky brown oil, which has fouled wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama, and sent tar balls ashore on beaches in Florida.

One-third of the Gulf’s U.S. waters, or 78,000 square miles (200,000 square km), is closed to fishing, and the toll of dead and injured birds and marine animals is climbing.

“The damage is already done to the environment,” Elvira said.

TIGHTER REGULATIONS

In 1979, Mexico experienced what was then the world’s biggest oil spill when its Ixtoc offshore well exploded under similar circumstances to the Deepwater Horizon.

Pemex spent more than $100 million on capping and cleaning up the massive spill, which dumped nearly 3 million barrels (126 million gallons/477 million liters) of crude oil over 297 days into the southern Gulf of Mexico. Some of the oil eventually washed up on the Texas coast.

But the company dodged most compensation claims by asserting sovereign immunity against U.S. courts.

Pemex, struggling to reverse declining output, has pinned its long-term hopes on exploring the deep waters of the Gulf of Mexico, where the government estimates as much as 29.5 billion barrels of oil equivalent could lie.

A 2008 oil reform law gave Pemex more flexibility to manage its finances and enabled it to draw up special service contracts that can offer foreign energy companies performance incentives to explore in the Gulf’s deep waters without breaching Mexico’s strict ban on foreign ownership of its oil.

Elvira said that in light of the BP spill, environment officials will press for tougher regulations to issue drilling and exploration licenses.

“The degree of risk (that each project) will have must be defined and a plan established to assure Mexico, and society, that these activities will be safe,” Elvira said.

Details of the new regulations would be worked out in coordination with the Energy Ministry, he said, adding: “I will not issue a single license or permit that doesn’t meet these requirements.”

“This is a lesson for the entire world,” he said.

Editing by Catherine Bremer

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