Mexico is planning to hold two regular oil field auctions every year, beginning in 2018, aiming to stimulate more foreign energy companies and local private players to invest in the country's hydrocarbons industry.
The two auctions will take place in the first and second half of the year, respectively, said Aldo Flores, deputy Energy Minister for oil and gas, adding that the first one will target onshore and shallow water deposits, while the second tender will target deepwater and shale reserves.
The tenders are part of a comprehensive energy industry reform launched in 2013 by President Enrique Pena Nieto. The goal of the initiative was to reverse the decline in the nation's oil production and encourage green energy initiatives by ending the monopoly of Petróleos Mexicanos, or Pemex, in the fossil fuel sector and opening up opportunities for foreign direct investment.
The reform also included a liberalization of fuel prices, which sparked widespread protests among the population earlier this year and brought the President's popularity ratings to record lows.
The government is not giving up, however. Last year, it conducted four oil and gas auctions, awarding a total of almost 40 licenses to about 50 companies.
Two months ago, the National Hydrocarbons Commission awarded nine major drilling contracts for offshore fields in the Gulf of Mexico to foreign bidders including Chevron, BP, Exxon, and the China National Offshore Corp, along with Statoil, and Total.
Related: Exxon Betting Big On U.S. Shale
Mexico seems anxious to raise its crude production substantially, overtaking Venezuela and Brazil. At the moment, Mexico pumps around 2 million barrels per day. According to the National Hydrocarbons Commission, the combined output from these nine fields, when they reach commercial production, will add 900,000 bpd to this total. Mexico is currently the fourth-largest oil producer in the Americas, according to the EIA, behind the US, Canada, and Brazil.
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. More