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Mexico auctions two-thirds of blocks in shallow water oil tender
June 19, 2017 / 8:55 PM / 4 months ago

Mexico auctions two-thirds of blocks in shallow water oil tender

MEXICO CITY, June 19 (Reuters) - Mexico on Monday auctioned two-thirds of the shallow water oil and gas blocks up for grabs in the latest round of its energy market opening, surpassing the cautious estimates of officials last week.

Italy’s Eni, Colombia’s Ecopetrol and Capricorn Energy, a unit of Edinburgh-based Cairn Energy , were among the companies at the forefront of the bidding for 15 blocks in the southern Gulf of Mexico. Ten of the 15 blocks were taken up in the auction.

The auction was the most recent step in Mexico’s bid to attract more private investment to the industry after Congress changed the constitution in late 2013 to end the 75-year production and exploration monopoly of state oil company Pemex.

Top government officials told Reuters before the auction they were hopeful Mexico would assign at least one-third to 40 percent of the blocks in the shallow water round.

The auction was the fifth since the energy reform, including one deep water and two previous shallow water tenders. They yielded 39 contracts signed with forecast investment over their lifespan of $48.8 billion, according to energy ministry data.

Mexico hopes by opening up the energy sector it will help reverse years of declining crude oil output.

Total crude oil production in Mexico now stands at 2.01 million bpd, down from a peak of 3.38 million bpd in 2004. (Reporting by Adriana Barrera; Editing by Bill Trott)

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