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Commentary: Mexico's Offshore Auctions Boosted by Transparency

Alfredo Alvarez, the Mexico oil and gas leader for Ernst & Young Mancera, and Deborah Byers, the U.S. oil and gas leader for Ernst & Young LLP, write in Fuel Fix : "In less than three months, the Mexican Government has changed the narrative of their oil and gas auctions. While round one, phase one, in July was widely called a “failure” in US media due to the amount of awarded blocks, phase two on Sept. 30 proved oil and gas companies will bid as long as Mexico offers attractive fields and remains open to industry feedback on the auction process."  

"Phase two also marked the second fully transparent auction – a huge win that gives additional credibility to Mexico’s energy reform."  

The piece concludes: "Mexico’s coming auctions are widely anticipated, as many in the industry expect the number and type of bidders to expand. However, each auction’s success will depend on the contractual regime, the cost and risk of the blocks available, and the industry’s environment at the time. Hopefully throughout the forthcoming auctions, the Mexican Government will continue to be receptive to the oil and gas industry’s feedback – thus further boosting the industry’s investment in the country’s oil sector."

Topics: commentary