Aussie Companies Early Victors In Mexican Oil Auction
MEXICO CITY, July 14 (UPI) — Australian media reports Tuesday energy companies there are among the early victors in the first round of auctions for exploration permits offshore Mexico.
Australia’s BHP Billiton and Woodside Petroleum each prequalified as bidders for the first round of auctions for permits to explore the shallow Mexican territorial waters of the Gulf of Mexico, the first in more than 70 years.
Neither company offered a statement on the approval. Deutsche Bank energy analystPaul Young told The Sydney Morning Herald deepwater permits, expected on the auction block next year, were among the “most promising and anticipated acreage” offers in the region.
Mexican President Enrique Peña Nieto last year set a goal of producing 3.5 million barrels of oil per day by 2025, which would be a 40 percent increase from 2013 levels. The president has opened up Mexico to private investors after more than 70 years under a monopoly controlled by state-run Petroleos Mexicanos, or Pemex.
The government is auctioning off rights to 14 tracts covering an estimated 2,600 square miles with reserve estimates of around 686 million barrels of oil equivalent, with most of that existing as light crude oil.
Analysis of the Mexican auction from consultant group Wood Mackenzie finds that who comes to the auction is as important of a metric as is the potential prize.
“A healthy mix of companies of different sizes and expertise levels will help Mexico create a domestic, private oil and gas sector, in addition to welcoming international players,” the group said in an emailed statement.
Before the Mexican president’s reforms, the U.S. Energy Information Administration said it expected production from Mexico to decline from 3 million barrels per day in 2010 to 1.8 million bpd by 2025. With the reforms, Mexican production holds steady at around 2.9 million bpd through 2020.
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