Mexico approved 19 companies and seven groups to bid on 14 shallow-water exploration blocks as the country prepares to allow private producers to drill in its waters for the first time since 1938.
ExxonMobil Corp., Chevron Corp. and Pacific Rubiales Energy Corp. were among the companies that Mexico’s oil regulator, known as CNH, cleared to develop an estimated 80,000 daily crude barrels in the Gulf of Mexico, Commissioner Juan Carlos Zepeda said in a live feed of the meeting. Some 34 companies applied to pre-qualify for the July 15 auction.
Mexico forecasts that the opening of the energy industry will bring in $62.5 billion in private investment by 2018 and increase its annual oil output by 500,000 barrels a day in that time.
Shell and Petrobras began the process of pre-qualification but ultimately decided to stop and won’t participate as bidders in this first phase of the first round, Zepeda said. As part of the pre-qualification process, interested companies paid for access to data rooms with seismic information on the blocks and were required to meet qualifications regarding investment capacity and experience.
The fall in oil prices, which declined to five-year lows in recent months, prompted the Finance Ministry to offer more incentives to companies. In March, the pretax profit margin minimum was increased to 20% from 15% before triggering a mechanism to share more of the output with the government. The final version of the contract details for the 14 oil blocks will be published June 9, Zepeda said.
In addition to these 14 shallow-water blocks, the CNH will also auction 9 other shallow-water blocks in the Gulf of Mexico in September and 26 onshore blocks in December.
Recommended Reading
Venture Global Gets FERC Nod to Process Gas for LNG
2024-04-23 - Venture Global’s massive export terminal will change natural gas flows across the Gulf of Mexico but its Plaquemines LNG export terminal may still be years away from delivering LNG to long-term customers.
US EPA Expected to Drop Hydrogen from Power Plant Rule, Sources Say
2024-04-22 - The move reflects skepticism within the U.S. government that the technology will develop quickly enough to become a significant tool to decarbonize the electricity industry.
Exclusive: ‘Regulatory Tsunami’ a Top Priority for American Producers, Says AXPC’s Bradbury
2024-04-22 - Regulatory considerations have significant implications for how oil and gas companies evaluate risk, and it’s a top priority for American energy producers right now, said American Exploration & Production Council CEO Anne Bradbury at CERAWeek by S&P Global.
Biden Administration Criticized for Limits to Arctic Oil, Gas Drilling
2024-04-19 - The Bureau of Land Management is limiting new oil and gas leasing in the Arctic and also shut down a road proposal for industrial mining purposes.
Exclusive: The Politics, Realities and Benefits of Natural Gas
2024-04-19 - Replacing just 5% of coal-fired power plants with U.S. LNG — even at average methane and greenhouse-gas emissions intensity — could reduce energy sector emissions by 30% globally, says Chris Treanor, PAGE Coalition executive director.