Shell, Chevron Abandon Projects After Failed Exploration
Shell and Chevron, two major oil companies operating in Mexico, announced their decision to withdraw from projects in the country due to the lack of commercially viable hydrocarbon reserves.
Shell, under the leadership of Chairman Alberto de la Fuente, has started the process of relinquishing two contractual areas located in the deep waters of the Gulf of Mexico. “The companies indicated that the contract area, Max-1XP had limited hydrocarbon potential due to insufficient thickness and immaturity, making oil and gas production economically unviable,” said Valeria Bautista, Legal Representative, CNH.
A similar outcome was observed at the Alux-1EXP well, which revealed a restricted presence of reservoirs and thermal immaturity, further impeding production possibilities. These abandoned assets are situated in the Cuenca Salina oil province, offshore Tabasco and Campeche, and had a 35-year license.
Commissioner Héctor Moreira Rodríguez, CNH, expressed regret over the resignation of Shell and Chevron. He emphasized that oil exploration activities involve a significant level of uncertainty, despite the efforts and investments made by companies. “They invested around US$200 million and found no commercial resources. They are doing the logical thing which is to leave the area,” said Moreira.
Mexico has recently witnessed a series of prominent oil companies, including BP, Equinor, Repsol and Total Energies, abandoning their assets, indicating challenges and unfavorable outcomes in the sector. It remains to be seen whether the government will take over these abandoned fields in the future.
Shell is currently in the process of relinquishing four blocks in the country. Upon completion, the company will hold a total of six blocks, the company told MBN. Chevron, on the other hand, will keep its participation in two blocks, one in collaboration with PEMEX and another with Shell.