Pemex launches first licensing round in Mexico in 70 years

By Phaedra Friend Troy

The national oil company of Mexico, Pemex has officially launched the first licensing round made available to international operators since oil and gas operations were nationalized.

An energy reform in 2008 allowed the change in doctrine for Pemex, which has not allowed international companies to explore and develop Mexican reserves since 1938.

Although less than originally slated, Pemex is offering three onshore exploration and production licenses that encompass approximately 40 mature fields in Southern Mexico. The licenses include the Santuario, Carrizo and Magallanes fields in the Chiapas-Tabasco region. Each license holds about six of these mature fields.

In total, Pemex believes the licenses hold up to 207 million barrels of oil equivalent in 3P reserves and more than 2.2 billion barrels of oil equivalent in situ. Currently, the three licenses produce an annual average of 13,000 barrels a day, but in the future, through redevelopment Pemex hopes to reach 150,000 barrels a day of production.

The licensing round stipulates that Pemex hold no less than 40 percent interest in the blocks.

By allowing foreign companies to develop Mexican reserves, Pemex hopes to gain knowledge and expand its capabilities to develop unconventional gas, deepwater and bitumen. Production from the oil-rich nation has been waning over the last decade due to a lack of skill set to properly develop the Mexican reserves.

While the licensing round only offers three blocks, it is a major shift for Mexico to allow foreign operators to develop its reserves. International operators are no doubt eager for Mexico to offer up its deepwaters in the Gulf of Mexico, which is expected to hold massive reserves.

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