• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 55 mins Shale Oil will it self destruct?
  • 23 mins White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 13 mins NYT: Mass Immigration Roundups in U.S. to Start Sunday
  • 3 hours U.S. Administration Moves To End Asylum Protections For Central Americans
  • 2 hours U.S.- Taiwan: China Says Will Freeze Out U.S. Companies That Sell Arms To Taiwan
  • 3 hours South Korea imports No Oil From Iran in June - First-Half Imports Fall 37%
  • 4 hours Starlink Internet Courtesy of Tesla
  • 1 day Panama revoked registrations of tankers flying under their flag that have not complied with sanctions. Most are Iranian tankers. Vessel seized in Gibraltar, Grace I, flying under Panamanian Flag. Registration revoked in May. England seizing justified
  • 22 hours Rising air pollution and green house effect
  • 1 day Is This The End of BBQ?
  • 1 day Oil Price Could Fall To $30 If Global Deal Not Extended
  • 21 hours U.S. Economic Expansion: Rich Get Richer
  • 14 hours Germany exits coal: A model for Asia?

Mexico Set To Lose Billions From Auction Delay

Gulf of Mexico

Mexico will lose billions as a result of the new government’s decision to delay oil and gas auctions while it reviews all contracts awarded by the previous government over the three years since it began holding auctions for oil and gas blocks.

"Every year you don't have a bidding, it's going to cost you $1 billion," said a commissioner from Mexico’s hydrocarbons commission, Hector Moreira Rodriguez, as quoted by S&P Global Platts.

Yet the losses would not just be directly financial. A delay in tenders will also interfere with President Andres Manuel Lopez Obrador’s plans to boost Mexico’s oil production to 2.4 million bpd by 2024. According to Rodriguez, with the delay, the country’s crude oil production will grow by 300,000 bpd less over the next ten years than otherwise.

Mexico’s current oil production stands at about 1.84 million bpd, of which 60 percent is exported. Production has been falling steadily and the tenders organized by the previous government were instrumental in reversing the decline.

Now the government is reviewing more than 100 contracts for signs of corruption. It has also had to bail out Pemex, which has turned the company into the most indebted in the world with the load at US$107 billion. Last month, Obrador announced a US$5.5-billion rescue package for the company, including US$3.9 billion in a direct cash injection and US$16 billion in guaranteed revenues.

Yet, according to industry insiders who talked to S&P Global Platts, even if the auctions are renewed before all contracts are reviewed, chances are Mexico will not be able to reach its production growth goals.

The reasons for this are natural depletion at legacy fields and an insufficient number of new discoveries. This should make the resumption of auctions all the more necessary if anything, especially coupled with the government’s ambition to reduce the country’s reliance on imported natural gas from the United States.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play