A Chevron oil platform in the Gulf of Mexico, in a file image.Mary Altaffer (AP)
Oil companies Repsol, BP, Chevron and others have given up their intention to search for black gold in Mexico. So far this year, at least 16 companies have initiated the process of early termination of their exploration contracts with the National Hydrocarbons Commission (CNH). The oil companies that landed on Mexican territory in 2014 thanks to the energy reform that opened the possibility of private investment in the exploration and production of hydrocarbons culminated almost a decade later in partial returns and renunciations of the awarded blocks.
At the last meeting of the National Hydrocarbon Commission last Thursday, the regulator approved the return of an area in the hands of Calicanto Oil&Gas as well as a property awarded to the consortium of BP Exploration México, Equinor Upstream and TotalEnergies México. The energy regulator also agreed to the early exit from two contract areas of the Spanish company Repsol.
The meeting detailed that in the case of Calicanto, although the company had permission to explore an area of 10.5 kilometers on the Tabasco coast for 25 years starting in 2016, the contractor announced his resignation in July 2023 . In the case of the Spanish oil company Repsol, they withdrew from two 30-year contracts covering a combined area of 1,625 square kilometers in the Burgos Basin in the Gulf of Mexico.
The consortium of Britain’s BP, France’s TotalEnergies and Norway’s Equinor signed a 35-year contract in March 2017 to explore 2,381 square kilometers in the Salina Basin. In this case, the commissioners reported that the companies were fined $42.2 million for failing to comply with the minimum work program. “This year we had several meetings with the companies that fulfill this contract and finally they agreed to pay the penalty to the Mexican Petroleum Fund and in any case it was no longer possible to continue,” commented the president of the CNH during the meeting. Agustin Diaz.
These oil companies join a previous list that has abandoned the tendered oil fields, mainly in the Gulf of Mexico: Eni, China Offshore Oil Corporation, Capricorn Energy, Pantera Exploration and Production, Caligari México and other oil companies have decided to bet others Oil veins off Mexico.
Gonzalo Monroy, general director of the energy consulting company GMEC, explains that the oil companies that came to Mexico in the wake of oil production in the last six years wanted to find out whether the hydrocarbon potential of the United States was still sufficient on the Mexican side and therefore the potential to produce light oil . “These exploration campaigns were carried out between 2016 and 2020 and we discovered that Mexico does have oil, but not in quantities that could compete with other areas. “Mexico didn’t have the geological resources to generate that much interest,” he says.
The specialist adds that the world oil market changed in 2020, when virtually all global investments in hydrocarbons dried up. “There is virtually no interest in the international market to come to Mexico to invest. In deep waters, it’s very likely that this famous deep-water treasure will just stay down there in the ground,” he says.
Since the start of this administration, oil rounds to allocate new territories to private companies have been paused, while state oil company Pemex’s production remains stagnant, at just over 1.6 million barrels per day, according to CNH data. In his most recent appearance, Pemex director Octavio Ramírez Oropeza predicted that oil production would be at 1.8 million barrels at the end of 2024, a target far from the more than two million forecast at the beginning of this term became.
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