Mexico Sweetens Oil Auction to Draw Firms Hit by Low Oil Prices

Gas is flared from a tower on an oil drilling rig operated by Pemex in the Ku-Maloob-Zaap oilfield at Campeche Bay off the coast of Ciudad del Carmen. (Susana Gonzalez / Bloomberg)
Gas is flared from a tower on an oil drilling rig operated by Pemex in the Ku-Maloob-Zaap oilfield at Campeche Bay off the coast of Ciudad del Carmen. (Susana Gonzalez / Bloomberg)

By Laurence Iliff / Wall Street Journal

Mexico’s hydrocarbons regulator has improved the terms for its September oil auction to drum up more interest among cash-strapped international oil firms reeling from falling prices, with industry analysts applauding the move Wednesday as a step in the right direction.

The National Hydrocarbons Commission approved a series of changes in both auction procedures and contract terms that reduce the risk to oil companies seeking to begin operations in Mexico following the nation’s energy opening to private and foreign firms.

The first oil block auction under the energy overhaul, held in July, was considered a failure because only two of 14 exploratory offshore blocks were awarded. Mexican officials promised to find ways to improve the terms for the second auction, which are for five groups of already discovered offshore fields.

Among the 14 companies that have qualified to bid in the next auction are major oil companies like Chevron Corp. and Royal Dutch Shell, national oil firms such as China’s Cnooc Limited, and Mexican upstarts Sierra Oil & Gas and Carso Oil & Gas.

http://www.wsj.com/articles/mexico-sweetens-oil-auction-to-draw-firms-hit-by-low-oil-prices-1440616643

Leave a Reply

Your email address will not be published. Required fields are marked *