MEXICO CITY – Officials with the Mexican government have indicated that it will postpone auctions for deepwater oil exploration and production contracts, and adjust the terms of upcoming tenders, according to reports from Reuters and the Financial Times.
The decision comes after an inaugural oil auction failed to meet the government’s modest expectations.
Energy Minister Pedro Joaquin Coldwell told local media that the government will change rules that scared off potential bidders earlier this month, when it was able to auction only two of 14 blocks in a pivotal oil and gas tender.
He signaled that the government will relax its requirement that consortia bidding on oil parcels must have one member act as a guarantor and hold shareholder equity of at least $6 billion to protect the state’s interest in the event of a major accident.
“We are revising the issue of the guarantees,” Joaquin Coldwell said in a recent interview with Mexican broadcaster Televisa’s cable news channel Foro TV.
He also said the government would tweak rules prohibiting a consortium from selecting a new company to replace a pre-selected operator that pulls out. He said that rule thwarted bids in the July auction. He also added that the government will also allow companies to make a second bid in auctions if an initial bid fails to meet a government set minimum.
The auction held in July was the first of a scheduled five-phase auction that will extend into next year for oil regulator CNH.
Joaquin Coldwell, also chairman of the board of state-owned oil company PEMEX, said the critical fourth phase covering deepwater acreage in the Gulf of Mexico would be postponed to allow the government and companies more time to pore over details.
“We are conducting a full evaluation in order to launch the deepwater call for bids by the end of September and give us more time to perfect the criteria because we shouldn’t have any margin for error on that,” he was quoted to say.
The oil regulator had previously said the call for bids, followed by the opening of the corresponding data rooms, would be made by the end of July.
Joaquin Coldwell said the fifth phase, which was to focus on higher-cost shale and other so-called non-conventional oil and gas fields, has been frozen.
“Right now we have suspended it pending a future evaluation,” he said.
The government had previously said that the fifth phase would be trimmed but would still go forward.