Successful auction encourages Mexico to step up oil opening

Mexico plans to hold a second, bigger deep-water auction around October next year, while Petróleos Mexicanos will likely seek as many as 25 partnerships with private firms.
Mexico plans to hold a second, bigger deep-water auction around October next year, while Petróleos Mexicanos will likely seek as many as 25 partnerships with private firms.

By Juan Montes and Robbie Whelan / Wall Street Journal

Buoyed by the results of Mexico’s first deep-water oil auction, widely seen as a big success, President Enrique Peña Nieto’s government plans to raise the bet.

Mexico intends to hold a second, much bigger deep-water auction around October next year, while state firm Petróleos Mexicanos will likely seek as many as 25 partnerships with private firms over the next two years, Energy Minister Pedro Joaquín Coldwell said in an interview.

“We’re going to be more ambitious, we’ll take a step forward because we now have more experience,” said Coldwell. “What we’ll very likely see are auctions with many more oil blocks than what we have seen so far.”

Mexico awarded eight out of 10 deep-water oil blocks in the Gulf of Mexico on Monday, exceeding expectations and attracting such oil majors as Exxon Mobil Corp. and the China National Offshore Oil Corp., despite a difficult backdrop of low oil prices and steep cuts in oil investments.

In a separate auction, Australia’s BHP Billiton won rights to partner with Pemex to develop the Trion field near the Mexico-U.S. maritime border—the first time Mexico’s state-oil firm partners with a private company to share risks and profits.

The results “encourage us to be much more ambitious in the coming auctions,” Coldwell said. “The menu [of blocks] is going to widen considerably.”

http://www.wsj.com/articles/successful-auction-encourages-mexico-to-step-up-oil-opening-1481037652

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