Mexico to Tender Batch of Onshore Oil Fields in Energy Opening


Mexico’s oil sector regulator approved on Monday the call for bids for its next package of contracts covering 26 onshore areas, part of the country’s historic energy industry opening after decades of state control. The onshore oil and gas areas to be tendered are spread across five states and contain 2.5 billion barrels of oil equivalent (boe) in proven, probable and possible reserves. Crude oil output from the areas could reach 35,000 barrels per day while natural gas production could total 225 million cubic feet per day, officials from the national hydrocarbons commission (CNH) said.

“This tender will favorably impact the emergence of Mexico’s new petroleum industry,” said CNH President Juan Carlos Zepeda. The call for bids for the onshore areas follows two earlier packages covering 19 low-cost shallow water areas divided into nearly two dozen contracts, all part of the so-called Round One tender that was launched late last year along with an initial allotment of areas to national oil company Pemex.

The Round One tender features packages of blocks grouped by type of petroleum basin and will allow oil companies to bid on contracts covering 169 offshore and onshore blocks for the first time since Mexico’s oil industry was nationalized in 1938. The onshore areas range in size from about 3 square miles (7.7 sq km) to 23 square miles (60 sq km) and will be tendered as 26 individual license contracts.

Zepeda added that pre-qualification requirements for the 26 license contracts will not focus on companies’ operational or financial capacities, as they did in previously announced Round One tenders, but rather the track record of individual engineers working for the companies. Winning bids will be announced on December 15. Analysts have expressed concern that slumping oil prices could dent interest in Round One, particularly in higher cost developments.

The average price of Mexico’s crude oil exports has recovered to about $57 per barrel from a low of below $40 a barrel near the beginning of the year. Last year, Mexico’s Congress finalized a sweeping energy overhaul that ended Pemex’s longstanding monopoly on a wide range of oil sector activities from exploration to retail gasoline sales. The reform aims to lure billions of dollars in private investment via new contracts to boost crude oil output, which has declined by about a third over the past decade. 





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