Mexico's CNH cancels October 2019 auction to select Pemex partners
The Mexican oil regulator Comisión Nacional de Hidrocarburos (CNH) has cancelled the October 2019 auctions aimed at selecting joint-venture partners for Pemex in seven onshore areas, including oil and gas blocks in the states of Veracruz, Chiapas and Tabasco. These "farmout" auctions were expected to lure private investments and to help Pemex reverse the trend in declining oil production. They had been postponed (in December 2018) to October 2019.
In December 2018, the CNH cancelled two oil and gas onshore bid rounds (rounds 3.2 and 3.3, namely Segunda y Tercera Licitación de la Ronda Tres) scheduled for February 2019, which would have offered nine unconventional onshore blocks with wet and dry gas. The cancellation of rounds 3.2 and 3.3 will give more time for revising the domestic energy policy and for evaluating all the existing exploration and extraction contracts before awarding new concessions.
Mexico's crude oil output is flagging and declined from 3.4 mb/d in 2005 to 1.91 mb/d in 2018. The main drivers behind this decline are the natural depletion of oil fields and a lack of investment. In order to reverse this trend, the government plans to add 0.6 mb/d in the next two years to reach 2.5 mb/d.
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