Despite low oil prices, energy reform in Mexico is advancing. Production costs in the shallow water blocks put to tender earlier this year are seen in the region of US$20 per barrel (b), economic in the current pricing environment.
Dozens of companies have prequalified for the shallow water tender, which bodes well for the rest of the reform and for the aims of the government: namely, to increase production that has stagnated over the past decade and reap the rewards of the rich resources the country possesses.
There are numerous challenges, however, beyond the low price environment, including the nature of the contracts on offer, traditionally long drilling times, plumetting confidence in the government and local content laws. This report provides a picture of what is occurring in the oil and gas reform in Mexico, and shows us where we are headed.