MEXICO CITY –The Mexican government awarded 16 contracts Tuesday for oil and gas exploration in the shallow-water Gulf of Mexico in its Round 3.1 auction, its ninth since opening the oil industry to foreign and private investment.
The auction of 35 blocks was the last before the upcoming July 1 presidential election. The leading candidate, Andrés Manuel López Obrador, has said he would review the contracts and hold off any new auctions at least until positive results are seen from the first awards.
According to a MarketWatch report, Energy Minister Pedro Joaquín Coldwell said Tuesday that the administration will continue with its planned auctions – 37 onshore blocks in late July and nine blocks of unconventional reserves in September – regardless of political considerations. “We have the firm conviction that the work we’ve done is correct and should be lasting,” he said at a news conference.
The administration of President Enrique Peña Nieto, which runs through Nov. 30, bet on the energy overhaul to restore oil production that has fallen steadily from a record 3.4 MMb/d in 2004 to less than 2 MMb/d currently.
Mexico has so far awarded 107 contracts which are expected to generate as much as $160 billion in investment.
Oil regulator Juan Carlos Zepeda said Tuesday’s contracts require minimum investment of $442 million and up to $8.6 billion over the life of the contracts. The first production is expected in 2022, reaching a peak of about 280,000 b/d of oil and 220 MMcf/d of gas in 2025.
Mexican state oil company Petróleos Mexicanos secured seven blocks, one alone and six in partnerships with other companies including Deutsche Erdoel AG, Total SA, and Royal Dutch Shell.
The hydrocarbons commission said last week that for the first time reserves in areas won in 2015 by private concerns were certified, contributing to the country’s reserves.
Overall proven oil and gas reserves stood at 8.5 Bbboe as of Jan. 1 this year, down from 9.2 billion at the beginning of 2017. The 7.6% decline compared with a drop of 9.8% the previous year. Crude-oil reserves fell 7.1% to 6.5 Bbbls as of Jan. 1, and gas reserves slipped 3.8% to 10 Tcf.