NGI Mexico GPI

In a day of tooth-and-claw bidding, a clear winner emerged Wednesday from the second and third auctions of Round Two of Mexico’s energy reform, which were dominated — for the first time — by natural gas-rich blocks.

Total natural gas production in Mexico fell at a trendline rate of 3.7% a year between 2012 and the first half of 2017, according to NGI calculations, but that figure obscures the actual driving force behind the overall decline.

Italy’s Eni SpA has raised the resource estimate of its Amoca field offshore Mexico in Campeche Bay after drilling and testing its first well, which indicated “significant oil levels” in the Orca and Cinco Presidentes formations.

One of the hallmarks of the liquid natural gas spot markets in the United States and Canada — access to natural gas storage facilities — help match supply during periods with greater than normal demand. Mexico has made tremendous strides in opening its natural gas grid to third party trading activity in recent months, but the country still has a long way to go to rival the storage availability north of its border.

Department of Energy (DOE) Secretary Rick Perry told his Mexican counterpart on Thursday that he wants to streamline the permitting process for cross-border energy infrastructure, including natural gas pipelines, calling them “absolutely vital facilitators of energy trade.”

Mexico has rescheduled a natural gas capacity auction on its import pipeline network for August, after failing to draw any bids on Monday.

The Zama-1 exploration well in Mexico, the first offshore well drilled in the country by the private sector, has hit net oil pay and some associated natural gas, Houston-based Talos Energy LLC and its partners said Wednesday.

Seven of 10 exploration blocks found bidders Wednesday in what was the first upstream auction featuring natural gas since Mexico’s 2014 energy reform.

The first days of operations under Mexico’s new natural gascapacity reservation system have gone relatively smoothly, according to pipeline system operator Centro Nacional de Control del Gas Natural (Cenagas).