The Mexican government said its third auction to offer oil and natural gas lease blocks for development was its most successful to date, with peak production from the 25 onshore fields expected to reach 77,000 boe/d and bring in $1.1 billion of investment over the next 25 years.

On Tuesday, the Secretaria de Energia (SENER) said 40 companies had participated in the Round One tender -- 26 individually and 14 in consortia. Of the 25 leases awarded, 18 went to Mexican companies. Canada's Renaissance Oil Corp. was awarded leases for three blocks. None of the world's majors participated.

"Under the terms of the lease agreements, the government will receive, on average, 63% of gross revenues," SENER said in a translated statement. "The results show that despite the challenging environment of global oil prices, Mexico presents geological and contractual opportunities for a long-term productive investment."

SENER added that with 18 new Mexican companies now involved in developing the country's oil and gas resources, "we have met the objectives of strengthening our hydrocarbons sector, making it more competitive and encouraging the investment of more capital."

According to SENER, 17 of the 25 licenses are for oil and gas fields in the Burgos Basin, which extends south from the Eagle Ford Shale in Texas into parts of the Mexican states of Coahuila, Nuevo Leon and Tamaulipas (see Shale DailyJuly 7).

On Wednesday, Renaissance CEO Craig Steinke said the Vancouver-based company "has made a commitment to its business in Mexico and the award of these oil and gas properties is an important step toward the company becoming a major operator in Mexico.” The leases are expected “to provide a solid foundation to grow Renaissance in Mexico."

According to Renaissance, the Mundo Nuevo, Topen and Malva blocks in Chiapas that it was awarded currently have aggregate gross production of 650 b/d of crude oil and condensate, and 6 MMcf/d of gas.

Seven of the leases are in the northern Mexican state of Nuevo Leon, while Chiapas, in the south, has leases for five fields. Veracruz, a coastal state along the Gulf of Mexico (GOM), has six leases. Two other coastal GOM states, Tabasco and Tamaulipas, have five and two leases, respectively.

Last December, Mexico's Comision Nacional de Hidrocarburos (CNH) launched its first auction for 14 offshore exploratory blocks in the shallow GOM, and invited international oil and gas companies to participate (see Daily GPIDec. 11, 2014). But the results were disappointing; less than half of the companies qualified to bid in the auction elected to do so, and several blocks received no offers (see Daily GPIJuly 15). Other bids failed to meet the minimum threshold for profit sharing with the government.

Mexico's second auction fared better than the first, after CNH sold three blocks to international firms for a combined $3.1 billion over the next 25 years (see Daily GPIOct. 2).

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 GPIAug. 14, 2014Aug. 7, 2014). The reforms opened the country to foreign investment in the oil and gas sector, but also allowed the state-owned oil company Petroleos Mexicanos, or Pemex, to hold on to the majority of its currently producing oil fields.