Mexican, Dutch firms win Mexico onshore oil deals

15th December 2015, Comments 0 comments

A Dutch-led consortium and Mexican startups won contracts in the first part of Mexico's onshore oil and gas auction Tuesday, as companies were undeterred by the location of fields in violent regions.

The auction is the third organized by the government this year following the 2014 enactment of a historic energy reform bill that opened the sector to private investors for the first time since 1938.

Fourteen consortiums and 26 individual firms were taking part in the sale involving 25 oil and gas deposits in five states, including three plagued by drug cartel crime: Veracruz, Tamaulipas and Nuevo Leon.

Four mature fields each containing more than 100 million barrels of oil and gas were the first ones auctioned off.

A group including Netherlands-based firm Canamex Dutch and two Mexican companies were awarded the Moloacan field in the eastern state of Veracruz.

Compania Petrolera Perseus won the Tajon field in southern Tabasco state, Diavaz Offshore was awarded Barcodon in the northeastern state of Tamaulipas and Servicios de Extraccion Petrolera Lifting de Mexico was given Cuichapa in Veracruz.

Winners for another 21 sites each containing less than 100 million barrels of oil and gas were to be decided later in the day.

More than 80 companies, most from Mexico but others from Latin America, Australia and Europe as well, originally qualified for a chance to win a contract, but only half of them made offers in the end.

- Carlos Slim in the mix -

The new energy company of Mexican billionaire Carlos Slim, Carso Oil and Gas, is among the national start-ups participating in the process, as authorities were aiming for a high participation of domestic firms.

Nuevo Leon, Tamaulipas and Veracruz have seen some of the most brutal turf wars between rival drug cartels as well as rampant theft from pipelines operated by state-run firm Pemex.

More than 5,000 illegal taps were discovered in the first 11 months of this year, compared to 3,286 in the same period in 2014, according to official figures.

Energy Minister Pedro Joaquin Coldwell noted on Monday that Congress is mulling legislation to toughen laws against such theft, which has hit Pemex "very hard."

The government also softened the terms for the auctions in order to lure more potential investors.

Officials were disappointed with the outcome of the first auctions for projects in shallow waters of the Gulf of Mexico, as company earnings have been hit by falling oil prices.

Only two of 14 sites were awarded in July and three of five in September.

Coldwell said this week that auctioning off five onshore fields on Tuesday "would be excellent" given the sector's tough international conditions.

The minister said the onshore fields are attractive because they have already produced oil and still have enough left to make it profitable for smaller firms.

They are also expected to quickly yield oil and gas.

"The first barrels of oil to be extracted following the energy reform should come from these fields," Coldwell said.

© 2015 AFP

0 Comments To This Article