MEXICO CITY – The Mexican government launched its second round of oil auctions, offering 15 exploration and production blocks in shallow waters of the Gulf of Mexico, according to a report in the Wall Street Journal.
On July 19, the National Hydrocarbons Commission approved terms for the first auction under Round 2, for which bids are due in March 2017.
The tender process includes five exploration and production blocks and 10 exploration blocks located off the coasts of Veracruz, Tabasco, and Campeche states. The blocks include existing and undiscovered reserves of light oil, heavy oil and gas, and combined cover an area of 8,908 sq km (3,439 sq mi).
The government is offering production-sharing contracts for 30 years, which could be extended for up to an additional 10 years if the fields in question are producing, the ministries of energy and finance said. Initial exploration periods are for four to six years, with a two-year evaluation period following a discovery.
The Energy Ministry said the aim of the auction is to increase Mexico’s output of oil and gas, as well as reserves, to guarantee the country’s energy security and government revenue. Several of the blocks include areas that were offered but not awarded in previous auctions.
After a major overhaul of the country’s energy laws, the government held three auctions in 2015 in which it awarded several dozen onshore and offshore oil fields to private players for the first time in almost eight decades.
After a disappointing first auction in which only two of 14 blocks were awarded, results improved in subsequent auctions as terms were modified.