Mexico sees first foreign oil and gas contracts by end 2015


Mexico sees first foreign oil and gas contracts by end 2015


MEXICO CITY -- Mexico will offer contracts to foreign companies in its recently opened oil and gas industry by the end of 2015 or beginning of 2016, according to Deputy Energy Minister Enrique Ochoa.

Companies will be allowed to bid on fields for exploration and begin developing infrastructure and operations as soon as late next year, Ochoa said in an interview at the Energy Ministry offices in Mexico City. Prior to granting operating licenses to foreign and local companies, the legal framework has to be determined and state owned oil producer Petroleos Mexicanos must select the fields it plans to continue to develop, he said.

“We estimate that by the end of 2015 or beginning of 2016, we could be in the stage of implementation,” Ochoa said. “We must be professional and careful with the necessary institutional development prior to the following rounds.”

Mexican President Enrique Pena Nieto enacted an energy law on December 20 that ends the 75 year production monopoly held by Pemex, as the state owned oil producer is known, and allows foreign companies such as Exxon Mobil and Chevron to produce oil. The new law could boost foreign investment by as much as $20 billion annually according to Carlos Capistran, chief Mexico economist at Bank of America Corporation.

Pemex has right of first refusal on the production areas it will maintain and is well positioned to seek joint ventures in mature oil fields to replenish diminished production, Ochoa said. The new law also opens joint venture opportunities with Pemex and private companies in refining and petrochemicals.

“There is a sufficient amount of mature fields to consider association options to be able to extract more oil and gas,” Ochoa said. “Reactivating mature fields could bring national and international investment.”

Pemex, the world’s fifth largest oil producer, pumped an average of 2.523 MMbpd in 2013, the ninth consecutive year of declines. The energy industry overhaul is forecast to increase the annual output of Pemex to as much as 4 MMbpd by 2025, according to the law.

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