Published On: Wed, Jul 1st, 2015

PEMEX Monopoly Finally Coming to an End

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According to www.bidnessetc.com/ Website, Mexican Commissioner of National Hydrocarbons, Juan Carlos Zepeda, declared last month that “companies pre-qualified to bid to explore for oil in Mexico’s shallow waters will be able to participate in auctions for all available blocks.” He further added that under the revised guidelines, companies could also compete individually with each other.
Previously oil exploration and production in Mexico was limited to Petroleos Mexicanos, the country’s state run company. However, the state run company had proved to be inefficient. The company saw consistent output declines, and finally in 2014, the decision to allow foreign companies to operate in Mexico was taken. Foreign companies such as Exxon and Chevron may possess advance technologies that are expected to allow them exploiting the area to its fullest.

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(Image: www.bidnessetc.com/)

The Mexican energy ministry has estimated the auctions to generate around $17 billion in private investments. Once the investments are complete, the shallow water region is expected to produce around 80,000 barrels of oil equivalent per day.

19 individual companies along with seven other groups had pre-qualified on June 1 for the bid on the blocks.

The decision to allow foreign companies to operate in Mexico came last year by the Mexican President Enrique Peña Nieto. Although PEMEX has discovered significant crude oil reserves in the area; it is able to do little regarding these resources. The Mexican state run company lacks proper drilling and the technical expertise to tap these reserves, and hence is looking for foreign oil companies for support.

Oil major that is expected to be keen on exploring in the area will be Royal Dutch Shell. The company has been operating in the US side of the Gulf of Mexico for the last 30 years, and possesses great deal of experience.

The Mexican oil regulator “Comisión Nacional de Hidrocarburos” (CNH) has indicated that the winners for the auction are expected to be announced on July 15.
Source: http://www.bidnessetc.com/

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