Mexico will ask for deep-water bids in December, President says

HOUSTON — Mexico will issue a call for bids on 10 lucrative deepwater exploration fields in early December, President Enrique Peña Nieto told a Houston audience Monday.

The announcement is the firmest date yet offered as the much-anticipated auction of Mexico’s deep-water resources approaches. The Gulf of Mexico fields are among the most potentially valuable and technically challenging opportunities the country plans to offer as part of its energy privatization.

Mexican officials had previously delayed the auction, and uncertainty around the process had raised speculation that the country may hesitate to offer valuable exploration opportunities at a time when oil prices are low and companies are slashing budgets for new offshore projects.

Peña Nieto said the announcement was an affirmation of his government’s commitment to the reform despite volatile commodity prices.

“We will maintain the rhythm in the bids of contracts for hydrocarbons extraction,” Peña Nieto said, speaking at the IHS CERAWeek Conference in Houston. “This decision demonstrates and confirms the commitment of the Mexican Government with the Energy Reform implementation, in a fast and decisive way.”

The 10 fields included in the tender include four blocks in the Centuron Plegado Perdido region and six in the Cuenca Salina region. Major oil companies such as Shell, BP and Chevron have invested in the U.S. side of the Perdido region.

Source: Comisión Nacional de Hidrocarburos
Source: Comisión Nacional de Hidrocarburos

The auction will be the fourth round of tenders to private companies since Mexico launched its energy reform. While the first round attracted little interest from investors, bidders snapped up the majority of blocks offered in the second and third auctions

Peña Nieto also used Monday’s speech to announce the tender for new high-voltage electricity transmission line and to announced open imports of gasoline and diesel fuel.

“Despite the low international oil prices, the world is trusting and investing in Mexico,” Peña Nieto said. “This is not the time to stop, this is the time to move forward.”