Mexico to Auction 37 Oil Blocks in July

By  
Anthony Harrup
  January 24, 2018

MEXICO CITY—The Mexican government unveiled plans to offer 37 onshore oil blocks in a July auction, which the Energy Ministry estimates could drum up about $3.3 billion in investment.

 

The blocks are located in northeastern and southeastern Mexico, covering a combined area of 9,500 square kilometers (3,668 square miles) with prospects of reserves for 260 million barrels of oil equivalent in gas and light crude, the ministry and the oil industry regulator said in a statement Wednesday.

 

The ministry said investment could average $89 million per block if exploration is successful.

 

The government hopes the auction will help develop the country’s private oil industry. Mexico has few private oil companies. State giant Petróleos Mexicanos had a monopoly on exploration and production from 1938 to 2013.

 

Energy laws were changed in 2013 to allow foreign and private capital into the industry.

 

Pemex’s crude oil output fell below 2 million barrels a day in 2017 after steadily declining for more than a decade from about 3.4 million barrels a day in 2004.

 

The July auction would follow two others planned for this year. On Jan. 31, regulators will take bids for 29 deep water blocks in the Gulf of Mexico, while 35 shallow-water blocks, also in the Gulf, are scheduled to be auctioned in March.

"The government says the onshore sales could attract up to $3.3 billion in investment"