Mexico: After 8 decades, foreign companies return to Mexico’s oil fields

Representatives for the consortium formed by Mexican oil company Sierra Oil & Gas, along with US based Talos Energy and Britain’s Premier Oil have signed the first contracts for the exploitation of Mexico’s oil and gas resources to be awarded to foreign companies since the 1930s. “After nearly eight decades, the presence of private enterprise in our oil industry is now a reality” said Mexico’s Energy minister, Pedro Joaquín Coldwell.

“With this deal, Mexico has updated itself in terms of Energy and public policy for energy, matching more advanced countries and taking a huge step towards the future, where the hydrocarbons in the ground can be used more efficiently, for the benefit of our Nation” said Coldwell, who was recently ratified in his post by President Enrique Peña Nieto.

The winning companies will have 90 days to conduct the required environmental analysis, and 120 days to present their exploration and development plans, said Juan Carlos Zepeda, who presides the National Hydrocarbon Commission (CNH), the state regulator for this industry.

The contest to assign 14 new exploration blocks in Mexico’s gulf coast took place on July 15th this year, with widely disappointing results. The consortium formed by Sierra, Talos and Premier Oil became the only one to earn the rights to exploit any possible findings in two blocks (2 and 7), out of a starting pool of 35 companies who had placed a bid. Seven of these failed to reach the minimum earnings as stipulated by the contest, which requires at least 40% State utility. Various analysts and authorities have pointed to the recent plunge in oil prices, as well as concerns over Mexico’s political and social situation, as the main culprits for the disappointing showing.

Source: Sputnik News

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