500 Oil-Rich Areas Have Potential for Future Auctions: CNH

Mexican authorities have delineated 1,000 areas with oil potential, of which 500 have already been allocated — 80% to PEMEX and 20% through private investment contracts. The remaining 500 are on hold but could be included in new bidding rounds, CNH Commissioner Héctor Moreira informed Bloomberg Línea. 

"We can't auction them all at once, but they are still there. Five years have passed since the last auction in 2018 and we should have assigned 250 by now," stated Moreira. 

The energy reform implemented by former President Enrique Peña Nieto in 2013 opened the sector to private investment, setting ambitious production and investment goals that went unmet over the years. When Andrés Manuel López Obrador entered office in 2018, he canceled two oil bidding rounds and focused on rescuing the state-owned company, PEMEX. 

"We need one of two options: either give them to PEMEX and provide funding for exploration or establish alliances, migrations, or new rounds," mentioned Moreira during his participation in the Joint Energy Associations Congress XIII.

In the past year, over a dozen contractual areas have been returned in full to the Mexican state prematurely by major oil companies like BP, Chevron, Equinor and Repsol, with some even exiting Mexico's oil sector almost in full. Moreira commented that the success rate for drilling a well is only 30%, but the odds become more favorable for companies with a higher number of drilled areas. 

In the most recent session of the CNH, held last Thursday, the regulatory body approved the return of an area held by Calicanto Oil&Gas and a block awarded to the consortium comprising BP Exploration México, Equinor Upstream and TotalEnergies México. During the session, it was disclosed that in the case of Calicanto, while the company had the right to explore an area of 10.5km2 off the coast of Tabasco for 25 years starting in 2016, the contractor notified its resignation from the awarded areas in July 2023. 

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