March 2, 2017 / 10:49 PM / 9 months ago

Mexico to launch two annual oil auctions beginning in 2018

MEXICO CITY, March 2 (Reuters) - Mexico’s oil regulator will organize two annual oil auctions beginning in 2018, officials said Thursday, in a bid to further boost the number of private and foreign producers operating in the country.

Part of an ongoing overhaul of Mexico’s energy sector, the post-2018 auctions will follow three previously announced ones set for later this year, covering two shallow water tenders and a separate onshore tender.

Last month, a senior energy official told Reuters a fourth auction will include deep water fields.

The deep water auction is set for December and will now also feature so-called unconventional onshore shale fields, Aldo Flores, deputy energy minister for hydrocarbons, told reporters on Thursday as the ministry announced its five-year development plan for the sector.

The inclusion of shale fields in the auction, most likely near Mexico’s northern border with the United States, will mark a first for Mexico, where development of its own shale basins badly lags booming U.S. fields next door.

Officials did not specify the locations of future fields up for grabs in the new five-year plan or the type of contract it plans to offer.

The twice yearly oil auctions beginning in 2018 will feature one during the first half of the year including shallow water and onshore conventional fields, and another in the second half including deep water and shale fields, said Flores, who also sits on the board of state-owned oil company Pemex.

A four-year-old landmark energy overhaul ended the decades-long exploration and production monopoly enjoyed by Pemex while also allowing private and foreign oil companies to operate fields on their own for the first time.

The National Hydrocarbons Commission, the sector regulator known locally as the CNH, oversaw four inaugural oil auctions last year in which nearly 40 contracts were bid out and won by nearly 50 companies. (Reporting by Ana Isabel Martinez; Writing by David Alire Garcia; Editing by David Gregorio)

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