HOUSTON —Mexico Energy Secretary Pedro Joaquín Coldwell said that since energy reforms have been enacted the country has received $22.4 billion in investment commitments.

But Mexico needs more money and technology to reach new resources, Coldwell said Sept. 23 at Rice University’s Baker Institute. The company continues to struggle with deepwater, shale and mature field development. Unconventional and deepwater reservoirs make up 76% of the country’s prospective resources.

Mexico has upcoming auctions, including a deepwater sale in December, but it will be months beyond that before unconventional assets near the U.S.-Mexico border are ready for the auctioneer’s hammer.

“Pemex finances are really suffering, they have taken a huge blow,” Coldwell said. The company was first hurt by an “accumulation of debt over time and very recently because of the dramatic fall in international prices.”

Coldwell said Pemex revenues are down by 80%.

The company can engage in farm-out agreements in order to get new partners or monetize nonstrategic assets “so they can survive this tempest,” Coldwell said.

Energy reform also allows Pemex power to renegotiate debt and, in particular, worker retirement plans.

“For each peso, the company manages to reduce from this debt the government will reduce another peso,” Coldwell said.

Compounding Pemex’s woes are projections that Mexico’s oil production will fall through 2017. Including NGLs and oil, 2016 production is forecast to decline by 115 thousand barrels per day (bbl/d) in 2016. State-owned Pemex controls the rights of about 83% of the country’s proved and probable reserves but is still roiling from low oil prices.

For Mexico, that will mean a financial burden. Oil industry taxes and direct payments accounted for a third of total government spending in 2015.

Development of oil and gas production through public auctions remains a lurching, rather than smooth process.

In July 2015, the country’s first auction phase of Round One foundered due to low crude oil prices and contracts terms. Of the 14 blocks available, only two received adequate bids to be awarded, according to the U.S. Energy Information Administration (EIA).

Mexico’s offshore and onshore auctions have been scrapped as the oil price downturn hurt results.

Unconventional assets were being considered for auction before being pushed back, Coldwell said.

“We suspended it for two reason,” he said. “First, international prices went down and our impression was there would be no interest from the industry, specifically in areas where there is no infrastructure.”

Coldwell said the other cause for concern was the lack of environmental regulations needed to perform unconventional drilling.

“We expect to have this regulation ready at the beginning of January,” he said, adding that by March they should be ready to proceed.

Submissions for 12 licenses to explore and extract onshore are due in April.

Coldwell said energy reform has helped Mexico transform power generation costs, due to coal-to-gas switching.

“Prices have already changed,” he said. “We have comparable rates. Not to Texas, but California.”

Darren Barbee can be reached at dbarbee@hartenergy.com.