Successful Auction Encourages Mexico to Step Up Oil Opening
06 Décembre 2016 - 5:40PM
Dow Jones News
MEXICO CITY—Buoyed by the results of Mexico's first deep-water
oil auction, widely seen as a big success, President Enrique Peñ a
Nieto's government plans to raise the bet.
Mexico intends to hold a second, much bigger deep-water auction
around October next year, while state firm Petró leos Mexicanos
will likely seek as many as 25 partnerships with private firms over
the next two years, Energy Minister Pedro Joaquí n Coldwell said in
an interview.
"We're going to be more ambitious, we'll take a step forward
because we now have more experience," said Mr. Coldwell. "What
we'll very likely see are auctions with many more oil blocks than
what we have seen so far."
Mexico awarded eight out of 10 deep-water oil blocks in the Gulf
of Mexico on Monday, exceeding expectations and attracting such oil
majors as Exxon Mobil Corp. and the China National Offshore Oil
Corporation, despite a difficult backdrop of low oil prices and
steep cuts in oil investments.
In a separate auction, Australia's BHP Billiton won rights to
partner with Pemex to develop the Trion field near the Mexico-U.S.
maritime border—the first time Mexico's state-oil firm partners
with a private company to share risks and profits.
The results "encourage us to be much more ambitious in the
coming auctions," Mr. Coldwell said. "The menu [of blocks] is going
to widen considerably."
The Energy Ministry is still preparing the second deep-water
auction, which would likely also include shallow-water blocks, but
Mr. Coldwell said at least 20 blocks would be offered, probably in
September or October.
The positive results from the latest auction promise to provide
a boost for an economy suffering from low oil prices, government
budget cuts and uncertainty over what U.S. President-elect Donald
Trump's administration will mean for Mexico's export manufacturing
industry.
The first production of deep-water oil -- which carries higher
risk but offers higher rewards than traditional deposits -- is
still several years away.
The auction could also help the flagging approval ratings of
President Peñ a Nieto, as the economic overhauls passed in his
first two years in office have yet to translate into robust
economic growth and Mexicans have been dismayed at government
corruption scandals and a resurgence of violent crime in the past
year.
Mr. Coldwell said this week's oil auction provides decisive
support for the 2013 energy overhaul, which amended the
Constitution to open the oil industry to private investors after 75
years of state monopoly.
Monday's oil auction was the fourth, and the first involving
deep-water reserves. Mr. Coldwell said the government plans six
more by the end of Mr. Peñ a Nieto's administration in late 2018.
Mexican law doesn't permit presidential re-election.
Three auctions, including shallow-water and onshore blocks, are
already scheduled between March and July. After the second
deep-water auction next fall, two more are planned for 2018 which
will likely include shale oil and gas for the first time.
"That would mean that by then, the energy reform would be very
advanced as far as oil is concerned," Mr. Coldwell said. The
government expects to have awarded nearly 100 oil contracts to
private firms by the end of the administration.
During that time, Pemex will seek partners for 20 to 25 oil
blocks, including shallow and deep water, onshore, and shale
deposits. Those projects could contain commercial reserves, which
are a major attraction for private oil firms.
Partnerships will improve the outlook for Pemex, which is
immersed in deep financial difficulties and lacks the money or the
technology to produce oil in more difficult and expensive
deep-water blocks.
A confident Mr. Coldwell said Pemex's partnerships "are going to
be one of the largest investment destinations in the oil industry
in the next two years."
Write to Juan Montes at juan.montes@wsj.com and Robbie Whelan at
robbie.whelan@wsj.com
(END) Dow Jones Newswires
December 06, 2016 11:25 ET (16:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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