Mexico’s private oil and natural gas industry has invested $18 billion in the country since 2015 and secured approvals to invest another $42 billion as a result of the country’s 2013-2014 constitutional energy reform.
That’s according to the Asociación Mexicana de Empresas de Hidrocarburos (Amexhi), Mexico’s private sector oil and gas trade organization.
The group highlighted its contributions in an update last Thursday (Sept. 9), saying, “Mexico is the main beneficiary” of the bid rounds conducted under the reform.
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The legislative overhaul has allowed firms other than national oil company Petróleos Mexicanos (Pemex) to participate in the exploration and production (E&P) segment, Amexhi said.
Private sector firms announced 12 commercial oil and gas discoveries in Mexico between 2017 and 2020, which “will counteract the decline” of Mexico’s currently producing legacy fields, Amexhi said.
The discoveries have raised Mexico’s proven (1P), probable (2P) and possible (3P) reserves by 29%, 43% and 39%, respectively, according to Amexhi.
Investments so far have included $7.62 billion in E&P projects, $2.72 billion toward Mexico’s sovereign oil wealth fund and $4.66 billion in payments to the government for subsurface geological data.
Private sector firms in Mexico were producing 63,529 b/d of oil and 192 MMcf/d as of July, according to CNH.
The Amexhi update comes amid continued criticism of the private energy industry by President Andrés Manuel López Obrador.
Shortly after taking office, his administration suspended the awarding of new oil and gas contracts to private sector firms, but has pledged to respect the sanctity of the 111 contracts awarded under the previous government.
“What I can say is that all of these contracts that were awarded have not produced good results,” the president said on Sept. 9 during his daily press briefing.
He claimed that of the active contracts, “very few are activated, the majority have no work, and there is no investment.”
Amexhi, for its part, countered that, “the evaluation of the benefits of the oil contracts should incorporate indicators other than production…Above all, because only 11 of the 34 contracts signed with the Mexican state are in the production phase, while the rest are in the exploration phase.”
Warren Levy, CEO of natural gas-focused Jaguar Exploración y Producción, this month told the Mexico Gas Summit hosted by Industry Exchange LLC his firm sees a “tremendous opportunity” in Mexico, adding, “natural gas is the place we want to be.”
The most high-profile project waiting to reach production is shallow water Block 7, site of the Zama oil discovery in 2017.
The consortium that made the discovery is led by Houston-based Talos Energy Inc. However, energy ministry Sener recently designated Pemex as operator of Zama, as part of the discovery is located within a neighboring Pemex tract.
Talos this month alleged that the move violated the United States-Mexico-Canada Agreement, and filed a notice of dispute with the Mexican government.
BHP, meanwhile, recently sanctioned investment of $258 million in front end engineering design for the Trion deepwater asset, a joint venture with Pemex.
Italy’s Eni SpA, meanwhile, one of Mexico’s leading private sector oil producers, in August announced a deepwater find in the Sureste Basin, with preliminary estimates indicating 150-200 boe in place.
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