Mexico’s oil industry regulator CNH (Comisio Nacional de Hidrocarburos) has voted to change the terms for December’s deepwater oil and gas auction so as to encourage more bidders and better bids.
For two years the government has been trying to reform its energy sector, especially by lessening state firm Pemex’s near monopoly position and by attracting private sector and foreign investors.
But earlier auctions of potential oilfield sites have been disappointing. Partly it has been because of the depressed price of oil, partly it was because the previous fields on offer were not so enticing. But also a factor was the off-putting nature of some of the terms and conditions for participants.
Several times before, Mexico has responded by loosening things up and now they’re trying again.
Energy companies and investors will be allowed more flexibility to structure their bids; the project operator will no longer need to be the biggest stakeholder in a particular well or oilfield, allowing companies not involved in the day-to-day running of the field to be lead investors; blocks on offer will be bigger; and the government’s take will be smaller.
The December 5 auction will comprise 10 potentially oil-rich deepwater blocks in the Gulf of Mexico near the maritime border with the US. Four groups and 10 individual companies have qualified to bid.