Mexico's Energy Secretary on Tuesday approved the bidding process for a dozen onshore exploration and production areas open to international investment. The acreage contains mostly natural gas and includes nine blocks in the Burgos Basin south of the Texas border.
The Burgos Basin areas cover 1,495 square miles and are expected to be prospective for 356.6 million boe. Additionally, three contract areas in the Southeast Basin cover 461 square miles and are estimated to be prospective for 286.6 million boe, according to the ministry's announcement.
The second call in Mexico's round two in the opening of its oil and natural gas resources to outside investment (known as round 2.2) is intended to increase natural gas production for the benefit of the country's petrochemical industry, in particular, said Secretary of Energy Pedro Joaquin Coldwell, according to a report in El Financiero. Aldo Flores, undersecretary of hydrocarbons, said the main target in opening the acreage is the production of wet gas, according to the newspaper.
Mexico has been focusing on increasing production of more lucrative crude oil as opposed to natural gas. To meet its growing need for natural gas -- largely driven by gas-fired power generation -- Mexico has been importing ever increasing quantities of natural gas via pipelines from Texas (see Daily GPI, July 5; June 17).
The lease sales are part of sweeping energy reforms submitted by President Enrique Pena Nieto and enacted by Mexico's Congress in 2014 (see Daily GPI, Aug. 14, 2014; Aug. 7, 2014). The reforms opened the country to foreign investment in the oil and gas sector but also allowed Pemex to hold on to the majority of its currently producing oil fields.
In the recent round 2.1, 15 shallow-water exploration blocks were offered in the Gulf of Mexico (see Daily GPI, July 21).