Mexico’s latest oil and gas auction seen as last big chance to reap major investments

Mexico is just eight days away from its latest and potentially biggest-yet round of offshore oil and gas auctions, according to Reuters.

It could also be the last major impact from the energy sector reforms of 2013 if foreseeable political, geopolitical and economic changes come to pass.

On January 31 Mexico will tender licences for exploration and production in 29 deep-water blocks in the Gulf of Mexico, an offering that has attracted a raft of major players including Shell, BP, Total, Exxon and China’s CNOOC.

The ongoing energy reforms have seen Mexico loosen the monopoly grip of state oil firm Pemex and allow foreign and private entities to participate and the last few oil rights auctions have shown greater commitments from international players.

But the upward investment trend may be blunted if July’s Mexican Presidential election is won by challenger Andres Manuel Lopez Obrador who opposes privatization and says he would review some of the contracts already signed.

There is also US President Donald Trump’s pledge to tear up the North American Free Trade Agreement (NAFTA), which could introduce great market uncertainty.

Plus, the Trump administration’s plan to massively expand the range of its offshore energy drilling in US waters could lure away likely investors in the Mexican part of the Gulf.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.
Back to top button