With oil well below $40 per barrel and every sign pointing towards prices staying low through next year, you’d be excused for thinking stories about countries tapping more of their oil reserves would be in short supply. Indeed, the sizable oversupply of crude in the global oil market is throwing the viability of projects around the world into doubt. But there’s a bright spot south of the border, as Mexico successfully auctioned off every one of the 25 oil contracts on offer earlier this week. Reuters reports:
Peak oil production from the 25 onshore fields will reach 77,000 barrels per day and attract investment of $1.1 billion, Energy Minister Pedro Joaquin Coldwell said in a tweet following the auction. Mexican officials had said they would consider the auction a success if at least five contracts were awarded. […]
Among the 14 consortiums with winning bids, there were a dozen small Mexican oil companies, marking a dramatic shift for a sector long dominated by state-owned Pemex.
77,000 barrels per day is a drop in what today is a bucket that’s fairly overflowing, but the auction’s relatively small scope aside, this is still a significant step for Mexico. The country’s state-owned oil company—Pemex—oversaw stagnating production in the decade leading up to President Enrique Peña Nieto’s reforms, but there’s hope now that private firms can inject new life into Mexico’s energy landscape.
Low oil prices will certainly make it more difficult for Mexico to make the kinds of strides it hoped to in the immediate aftermath of these reforms, but the groundwork is there for it to join the United States and Canada in the North American energy boom.