Mexico to cancel Feb oil, gas auctions

mexico city — Mexico’s energy secretary Rocio Nahle said that President Andres Manuel Lopez Obrador’s newly installed administration would cancel 2 February bidding rounds for oil and gas blocks, including Mexico’s first shale areas on offer.

Lopez Obrador, who took office on December 1, has sharply criticised the landmark energy opening enacted by his predecessor, President Enrique Pena Nieto, whose government planned the February auctions.

The new president previously said he would suspend future oil auctions pending a review of the more than 100 contracts already awarded, but has not detailed what would become of the auctions slated for February.

Mexico’s oil industry is struggling to stem a long-running crude output decline, posing one of the biggest challenges for Lopez Obrador’s six-year term. He has yet to disclose a full plan for the sector.

Nahle told reporters at an event in the state of Chiapas on Saturday that 2 bidding rounds would be cancelled. Together they would have auctioned off 46 oil and gas blocks, including the first shale areas in Mexico to be offered to private and foreign oil companies.

The dense rock has been successfully tapped over the past decade in the United States, including the lucrative Eagle Rock formation in Texas just across Mexico’s northern border.