Mexico will licence 4 new auctions within 2018
Mexico wants to squeeze in a fifth oil auction this year, racing to put together a new package of shallow water heavy crude blocks for bidders before the current administration leaves office
Mexico aims to add the heavy oilfields to the existing auction calendar by the end of this year in an attempt to finalize a growing roster of drilling deals before a new administration takes the reign.
“We have three auctions already announced (for this year) and we expect one more before the end of this presidential period, which is for heavy crude in shallow waters,” said Mexico’s Deputy Energy Secretary Aldo Flores.
This Mexican rush is an effort to reinforce an ambitious energy reform by the government of President Enrique Pena Nieto. The bidding rounds are designed to bring new investment to the sector and reverse the country’s declining oil production.
Mexico in January awarded 19 deepwater blocks in the first auction of this year, which brought on the table over $93 billion in promised investment for the coming decades.
About half of Mexico’s oil production comes from heavy oil areas in the Gulf of Mexico’s shallow waters. But foreign investment is needed to secure future production aimed to maintain supplies to U.S. refiners, the largest buyers of its crude oil.
The Mexican oil regulator and the national oil company PEMEX are also in talks to open heavy oil drilling opportunities to private actors.
“There is a very large potential there. We are seeing this (project) as a package, but have not yet defined the specific model for it. We are evaluating it,” Flores said.
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