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Since Mexico's landmark 2013 energy reform that opened up oil and gas fields to foreign companies, 72 exploration and production contracts have been handed out.   © Reuters
Interview

Asian companies are major bidders in Mexico's deepwater oil tender

Country courts new markets as its North American clients shift to shale

| China

TOKYO -- Billed as the next headline event in the world of oil, Mexico will conduct a new round of bidding for deepwater oil and gas blocks on Jan. 31, 2018.

On a three-day tour of Japan to brief energy companies about the new opportunities, Juan Carlos Zepeda, president of the National Hydrocarbons Commission, Mexico's oil regulator, said that Asian companies such as Japan's Inpex, China's CNOOC and Thailand's PTT Exploration & Production will be major players in the tender.

"The future for us is Asia," Zepeda told the Nikkei Asian Review in an interview on Tuesday. "It is Japan, it is South Korea, it is India, and it is China. The big countries importing oil and gas are in Asia."

Four years after a sweeping reform of the energy sector that ended 75 years of state monopoly and opened up its oil and gas sectors to foreign companies, Mexico is eager to offer its untapped reserves to outside bidders.

Juan Carlos Zepeda, president of Mexico's National Hydrocarbons Commission, the country's oil regulator, speaks to the Nikkei Asian Review in Tokyo on Tuesday. (Photo by Ken Moriyasu)

Of the 29 companies registered for the January auction, nine are from Asia and Oceania, Zepeda revealed. These include Inpex and Mitsui & Co. from Japan, China's CNOOC, ONGC Videsh, a subsidiary of India's Oil & Natural Gas Corp., and PC Carigali Mexico Operations, a subsidiary of Malaysia's Petronas.

This is the first time that Thailand's PTT is taking part in the process.

Another participant is PTT Exploration and Production, the flagship oil and gas arm of Thailand's state-owned resources giant PTT. "This is the first time that Thailand's PTT is taking part in the process," Zepeda said. "It is a very competitive bid, but we are very pleased." 

Zepeda said that Mexico is eager to diversify export destinations to lessen dependence on the adjacent North America market. "The U.S. has become pretty much self-sufficient in terms of energy after the revolution in shale oil and shale gas. We have to look for countries that are increasing their imports, and they are in Asia."

The regulator touted Mexico's future as possibly being "the most prolific region offshore in America." He compared the number of offshore wells that have been explored in recent years with those in nearby countries.

"Between 1976 and 2016, some 6,076 wells were explored in the U.S. and 2,420 were explored in Brazil. In Mexico, that figure was a mere 316," he said, emphasizing Mexico's relatively untapped potential.

Zepeda also explained that Mexico's location offered a strategic advantage for shipping U.S. natural gas to Asia. Transporting the gas from the Permian Basin that spans Texas and New Mexico via pipeline to Mexico's Manzanillo Port would reduce shipping time to Japan by 39% and costs by 32%, compared to exporting gas from Louisiana and sending it through the Panama Canal.

Interviewed by Nikkei Asian Review Chief Desk Editor Ken Moriyasu

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