Published On: Mon, Dec 15th, 2014

Bidding for Oil Exploration Rights officially started in 14 areas of the Gulf of Mexico, including Campeche

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Mexico starts oil exploration bids,  businesses may bid independently or as a consortium.

 

The Mexican government announced on Thursday, December 11th, 2014, the start of bidding for oil exploration rights in 14 areas of the Gulf of Mexico being opened to domestic and international companies as Mexico ends a seven-decade state monopoly on the petroleum business.

Bidding will continue until July 15. Companies wishing to bid must meet a set of requirements, including showing their participation in at least three exploration projects and oil extraction of at least $1 billion and capital on hand of at least the same amount.

Mexico nationalized its oil industry in 1938. Prior to this year’s reforms, the state company Petróleos Mexicanos was the only one allowed to do oil exploration and production.

The parcels up for bid are in shallow water, less than 500 meters (1,640 feet), off the coasts of Veracruz, Tabasco and Campeche states.

The areas will be explored through shared production contracts running for 25 years.

Businesses may bid independently or as part of a consortium, but no company can try for more than five blocks. Interested companies will have access for six months to detailed data about each of the parcels through a website.

Mexico is betting a lot on this audacious opening,” said Energy Secretary Pedro Joaquín Coldwell. “For that reason the Mexican government’s commitment to transparency is crucial.”

Oil Platform in Campeche (Photo: Google)

Oil Platform in Campeche (Photo: Google)

Undersecretary of Energy Lourdes Melgar said every contract will include a clause stating that any corrupt practices will lead to cancellation of the deal.

Mexico’s oil and gas production reached a maximum of 3.4 million barrels a day in 2004. Since then, it has fallen to 2.4 million barrels. The government hopes the opening of the industry will entice foreign firms with access to greater exploration technology and help boost daily production to 3 million barrels by 2018 and 3.5 million by 2025.

Analysts have estimated that investment in the sector could reach $15 billion a year.

By E. EDUARDO CASTILLO (AP)

Source: http://www.thenews.com.mx/

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