BP has bought up full…
Oil markets were left both…
Mexico’s energy ministry on Monday extended by two years the leases on 101 oil and gas exploration blocks assigned to state oil firm Pemex that were due to expire on August 28.
Under Mexico’s energy reform of 2013, the government opened oil and gas exploration blocks to international investments for the first time in more than 70 years, ending Pemex’s monopoly. The state oil company was allowed to keep many of its blocks on the condition that it carries out a minimum amount of work to explore them.
A total of 65 of the 101 blocks partially fulfilled the required activity targets, but the energy ministry analyzed the domestic and international conditions that had affected Pemex’s reduced investments and decided to extend the state firm’s leases on them. According to the ministry, 68 percent of Pemex’s prospective resources are located in those areas, which are expected to generate income for the government in the form of taxes and royalties.
In addition, Pemex will include some of those blocks in farm-out contracts to boost investments and income generation, the energy ministry noted. The state firm also cut its exploration investments by 37 percent between 2015 and 2017, due to the low oil prices.
Pemex is currently looking for joint venture partners to help it to develop the Nobilis-Maximino deepwater block in the Gulf of Mexico. In March this year, the Mexican company and BHP Billiton agreed to jointly explore the Trion discovery.
Related: Kurdish Independence Could Deal A Major Blow To Oil Markets
Last month, UK-based Premier Oil, along with its partners Talos Energy and Mexico City-based Sierra Oil & Gas, said that they struck oil in excess of 1 billion barrels in the southern Gulf of Mexico in what they described as a “world class discovery.”
Mexico’s latest offshore blocks auction exceeded expectations, with several international oil majors winning exploration blocks. Mexico is planning to hold four more oil and gas block tenders by November 2018 as part of efforts to develop its reserves.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.