As Mexico opens up its oil sector to private producers for the first time in decades, the initial set of contracts up for grabs later this year will feature extended exploration periods, the country's oil sector regulator said on Wednesday.
The change to the draft production-sharing contracts for 14 shallow water exploration projects will allow companies another year to satisfy requirements that they drill a field's first test wells, said Juan Carlos Zepeda, head of Mexico's national hydrocarbons commission.
"In this new version... the exploration phase will be four years instead of three with a possible extension of two years," said Zepeda, before the change was approved by the commission.
Oil companies had criticized the terms of the original draft contract's initial exploration phase, which required at least two completed wells in the first three years or the company risked having the 25-year contract rescinded.
Earlier this month, the regulator voted to modify the shallow water contracts to give companies a bigger share of profits as well as more flexible work requirements no longer linked to fixed upfront investment commitments, but instead emphasize the number of wells drilled.
The so-called Round One contract tenders are among the first steps of a sweeping energy reform finalized last year that ended the decades-long monopoly enjoyed by state-run oil company Pemex and promise to reverse a decade long slide in crude oil output.
Recommended Reading
U.S. Shale-catters to IPO Australian Shale Explorer on NYSE
2024-05-04 - Tamboran Resources Corp. is majority owned by Permian wildcatter Bryan Sheffield and chaired by Haynesville and Eagle Ford discovery co-leader Dick Stoneburner.
1Q24 Dividends Declared in the Week of April 29
2024-05-03 - With earnings season in full swing, upstream and midstream companies are declaring quarterly dividends. Here is a selection of dividends announced in the past week.
Analyst Questions Kimmeridge’s Character, Ben Dell Responds
2024-05-02 - The analyst said that “they don’t seem to be particularly good actors.” Ben Dell, Kimmeridge Energy Partners managing partner, told Hart Energy that “our reputation is unparalleled.”
Tellurian Reports Driftwood LNG Progress Amid Low NatGas Production
2024-05-02 - Tellurian’s Driftwood LNG received an extension through 2029 with authorization from the Federal Energy Regulatory Commission and the U.S. Army Corps of Engineers.
Zeta Energy Appoints Michael Everett as COO
2024-05-02 - Prior to joining Zeta Energy, a lithium-sulfur battery developer, Michael Everett previously served as president and COO at Advanced Battery Concepts.