Mexico soft­ens auc­tion rules for oil de­vel­op­ment sites

The Pak Banker - - BUSINESS -

MEXICO CITY: Bid­ding re­quire­ments for the de­vel­op­ment of sev­eral Mex­i­can oil and nat­u­ral gas blocks have been re­laxed in or­der to at­tract for­eign in­vestors, Mexico's Na­tional Hy­dro­car­bons Com­mis­sion has an­nounced.

The ac­tion fol­lows dis­ap­point­ing re­sults from the first ten­der of de­vel­op­ment blocks, in mid-July. "The changes we are bring­ing about are in­tended to at­tract more in­vest­ment, im­prove job cre­ation and in­crease oil and nat­u­ral gas pro­duc­tion," CNH ex­plained in a state­ment late Tues­day. The rule changes al­low for greater flex­i­bil­ity in fil­ing a bid and in form­ing con­sor­tiums. The min­istries of energy and fi­nance also changed rules on guar­an­tees, in­sur­ance and ar­bi­tra­tion. On July 15, Mexico put the de­vel­op­ment of 14 shal­low-wa­ter Gulf of Mexico sites up for auc­tion, but only two at­tracted bid­ders.

Four more phases in this first round of ten­ders are ex­pected. The most highly an­tic­i­pated are for deep-wa­ter sites, which will take place at the start of 2016. Last year, Pres­i­dent En­rique Peña Ni­eto ap­proved con­tro­ver­sial re­forms to the petroleum sec­tor, break­ing up a state mo­nop­oly that had dated to 1938, with the goal of re­vi­tal­iz­ing oil pro­duc­tion and stim­u­lat­ing the coun­try's econ­omy af­ter years of de­clin­ing pro­duc­tion.

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