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Mexico to Launch Auction for Oil Contracts for 1st Time in History

13 September, 2012

Reuters reported this month that Pemex,the state oil company in Mexico,will auction off oil field operating contracts for the first time in history. This is part of the country's ongoing efforts to encourage private partners to play an increasing role in the Mexican oil industry over the next ten years. Contracts are currently being awarded that will bring in private capital and expertise,reactivating operations at three small oil fields in Mexico this summer. 

Pemex reported that more than 120 international companies attended the conference the first week in March,confirming the interest of oil companies in Mexico,which has been managing oil production under a state-run monopoly for more than 70 years. As the number seven producer of oil in the world,Mexico has seen a decline in production in recent years,due to a lack of exploration for new deposits and outdated technology,which this auction hopes to remedy. 

Pemex CEO Juan Jose Suarez stated recently,"Businesses which decide to participate in this first bidding round and in subsequent rounds can be sure that this type of contract is a great opportunity to expand their investment portfolio." He went on to say that up to one quarter of Mexico's future projects over the next ten years will fall under the new contracting plan,which was made possible by changes in 2008 to Mexico's previously restrictive energy legislation. Two more rounds of bidding are already being planned for later in 2011,with more sure to follow in subsequent years.

Topics: Mexico