Mexico’s debut foray into opening up its oil field rights was such a damp squib it has postponed upcoming deepwater auctions and will adjust terms of future tenders, it was announced on Wednesday.
In opening up its nationalised oil industry to outside private investment the Mexican government had hoped to lure billions of dollars into a domestic industry long dominated by state firm Pemex, which enjoyed a 75-year monopoly on exploration and production until 2013.
It was especially hopeful because of the slump in oil prices which had hit government coffers badly.
But in the event, the July 15 first open oil rights auction fell flat as only two of 14 available shallow water oil and gas blocks received bids. The Energy Ministry had said beforehand that five successful bids would make for a successful auction.
Now the Energy Minister says the government will relax its requirement that consortia bidding on oil parcels must have one member act as a guarantor and hold shareholder equity of at least $6 billion to protect the state’s interest in the event of a major accident.
It will also allow companies to make a second bid in auctions if an initial bid fails to meet a government set minimum.
July 15’s disappointing event was the first of a scheduled five-phase auction that will extend into next year.
The fourth of those phases is seen as critical as it covers lucrative deepwater fields in the Gulf of Mexico and that phase will now be postponed to allow the government and companies more time to consider the details.