Mexican oil auctions originally set for later this year will be postponed until February, Mexico’s oil regulator said on July 18, allowing time for leftist President-elect Andres Manuel Lopez Obrador to take office.
During the campaign, Lopez Obrador said he would request a pause in auctions to allow his team to check for corruption in oil and gas contracts already issued to private and foreign companies.
Lopez Obrador takes office in December following his landslide election victory on July 1. The auctions are scheduled for Feb. 14.
The head of the National Hydrocarbons Commission (CNH), which runs the auctions and supervises the contracts, said the decision was aimed at attracting more bidders, while also acknowledging the political transition.
“I see our approval of extending the time frame as positive,” Juan Carlos Zepeda, CNH’s president, said. “Let’s remember we’re about to enter into a process of the new administration reviewing the contracts, which is a process that will take some time, a few weeks, a few months.”
“This decision will have the benefit that we work together with the new administration,” Zepeda added.
Before the election, officials including Zepeda and Energy Minister Pedro Joaquin Coldwell repeatedly said the auctions would take place as planned whoever won.
A total of 45 onshore areas, including both conventional and shale blocks, were originally scheduled for auction on Sept. 27, while tenders to pick partners for state-owned oil company Pemex in seven separate areas had been set to be awarded on Oct. 31.
The projects would have been the last scheduled oil tenders under outgoing President Enrique Pena Nieto.
An energy overhaul in 2013 championed by Pena Nieto ended Pemex’s decades-long monopoly over the sector and allowed private producers to operate their own fields for the first time.
Since then, more than 100 contracts have been awarded at auction to a range of private and foreign firms, including oil majors Royal Dutch Shell (NYSE: RDS.A) and Chevron (NYSE: CVX).
More than a dozen oil companies, including Germany’s Deutsche Erdoel and Mexico’s Petrobal, had already begun the process of pre-qualifying for the onshore auctions.
Six other oil companies have started the pre-qualification process for the Pemex joint ventures up for grabs, according to the CNH data.
Lopez Obrador said he is committed to expanding Mexico’s oil and gas output, which has declined steadily over the past 14 years, but some of his aides oppose private sector investment in the industry.
Recommended Reading
Hess Corp. Boosts Bakken Output, Drilling Ahead of Chevron Merger
2024-01-31 - Hess Corp. increased its drilling activity and output from the Bakken play of North Dakota during the fourth quarter, the E&P reported in its latest earnings.
Petrie Partners: A Small Wonder
2024-02-01 - Petrie Partners may not be the biggest or flashiest investment bank on the block, but after over two decades, its executives have been around the block more than most.
CEO: Coterra ‘Deeply Curious’ on M&A Amid E&P Consolidation Wave
2024-02-26 - Coterra Energy has yet to get in on the large-scale M&A wave sweeping across the Lower 48—but CEO Tom Jorden said Coterra is keeping an eye on acquisition opportunities.
Endeavor Integration Brings Capital Efficiency, Durability to Diamondback
2024-02-22 - The combined Diamondback-Endeavor deal is expected to realize $3 billion in synergies and have 12 years of sub-$40/bbl breakeven inventory.
Exxon, Chevron Tapping Permian for Output Growth in ‘24
2024-02-02 - Exxon Mobil and Chevron plan to tap West Texas and New Mexico for oil and gas production growth in 2024, the U.S. majors reported in their latest earnings.