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Mexico’s hydrocarbon reserves shed 6 percent last year to 16.77 billion barrels of oil equivalent, the country’s energy industry regulator CNH said yesterday, as quoted by Reuters. The decline came in spite of an increase in crude oil discoveries because of a drop in new gas deposit discoveries, CNH said.
The 6-percent decline concerns so-called P2 reserves – proven and probable. P3 reserves, which also include possible oil and gas content in prospective deposits, also fell in 2016, by 1.1 percent to 25.86 billion barrels of oil equivalent.
At the moment, Reuters notes, Mexico is pumping a bit more than 2 million barrels of oil daily and needs a 100-percent replacement rate of its reserves to just maintain it. The country, however, has plans to boost this to more than 2.6 million barrels – the rate, at which Brazil was pumping oil as of last October.
As part of these plans, earlier this month Mexico’s deputy energy minister Aldo Flores Quiroga announced that the ministry has invited oil companies to suggest offshore deposits they would like to develop. The nominations are due to be announced in June, and the blocks will be tendered in December—a year after Mexico awarded exploration licenses for nine offshore blocks to companies such as Chevron, BP, Exxon, and the China National Offshore Oil Corp., as well as Statoil and Petronas.
Both tenders, as well as a breakup of the monopoly position of state-owned Petroleos Mexicanos, are part of government efforts to liberalize the country’s energy market and make better use of local mineral resources.
The decline in new discoveries has a direct link to Pemex’s dethroning as a monopoly. As a result of the change, the company has had to make significant cost cuts since 2014, which, combined with the oil price crash, seriously affected its financial capacity to invest in new exploration.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.