Mexico eyes $44 bn in deep-water oil auction

MEXICO CITY, Dec 19, (AFP): Mexico’s government unveiled 10 deep-water oil blocks that it will offer in the fourth auction of its energy reform, eyeing investments that could total $44 billion.

The fields in the Gulf of Mexico contain a total of 10.9 million barrels of crude, the energy ministry said in a statement.

Deputy Energy Minister Lourdes Melgar said each contract is expected to generate $4.4 billion in investments.

It will be the fourth auction since the country enacted an energy reform last year that opened the sector to foreign investments for the first time since 1938, breaking the monopoly of staterun firm Pemex.

No date was set but the ministry said the start of the process will be announced in the third quarter of 2016 and the auction will have to take place within 90 days after that.

Four of the blocks are in the Plegado Perdido belt near US waters while the six others are off the coast of the eastern state of Veracruz.

The deep-water projects are expected to attract the world’s major energy firms because they require bigger investments than the shallow-water and land blocks that were auctioned off this year.

Falling oil prices affected the first two auctions, which drew fewer offers than the government had hoped, with only five of 19 shallow-water fields winning contracts.

But the energy ministry hailed the latest auction, on Tuesday, when all 25 onshore fields were sold, mostly to new Mexican companies.