Mexico to auction 15 offshore oil areas

By Nancy Caouette

MEXICO CITY (AA) – The Mexican government on Tuesday approved auction terms for 15 shallow water areas in the Gulf of Mexico.

The contracts will be part of a major overhaul of the country’s energy laws launched in 2013 and is set to open next March, according to the energy ministry.

In the first phase of the auction process called Round 2, the government will feature production-sharing contracts for 30 years that could be extended for up to 10 years.

Fifteen contracts will cover an area of 8,908 square kilometers (5,535 square miles) and include existing and undiscovered reserves of light and heavy oil and gas.

The head of Mexico’s National Hydrocarbon Commission, Juan Carlos Zepada, said at a press conference Tuesday that the 15 contract areas located in the states of Veracruz, Tabasco and Campeche could bring investments of $750 million per block, or $11.3 billion in total.

Energy Secretary Pedro Joaquin Coldwell said the purpose of Round 2 is to raise the country’s oil and gas reserves and output and to guarantee Mexico’s energy and revenue security.

“The tender will obviously have a positive effect on the region of the oil area, bringing jobs and services recovery. That will be reflected in the economic revitalization of states of the Gulf of Mexico”, Coldwell said in a separate press conference Tuesday.

In 2013, Mexico ended more than seven decades of monopoly by state-run oil company PEMEX when it launched an ambitious energy law reform.

Two years later, Mexico initiated Round 1 during which the country featured onshore and offshore oil fields for private companies.

The three auctions during that phase did not attract as many private investors as Mexico would have hoped and some water fields received zero bids.

The most anticipated auction during Round 1 will feature 10 deep water areas of the Gulf of Mexico that is expected to open in December.