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Oil in Mexico: Transparent but Almost Empty

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Energy

 

By: Charles B.
Published: July, 2015

 

In June we wrote about horrible problems in Mexico concerning safety and corruption some days before mid-term elections. Surprisingly, this negative mood didn’t mean fewer seats in Congress for President Peña, given that his party (PRI) and allies together filled more than 50 percent of them. The significance of this outcome is not the president’s good performance but rather an opposition in disarray. The left split into two main blocks, and the National Action Party (PAN) is suffering an identity problem relative to its traditional stance as a right opposition party. The PAN proposed a raise in the minimum wage, but this inconsistent message took it nowhere, and the party got its worst result in 25 years.

In that noisy environment, it seemed that energy liberalization was moving quietly toward success. Maybe it was too quiet: 14 areas in shallow waters in the Gulf of Mexico were open for private exploration in a bidding session on July 15, but only two were awarded, both to Premier Oil, jointly with Talos Energy and Mexican Sierra Oil and Gas. For the remaining 12 blocks, either no tenders were submitted or they fell below the minimum share of profits asked by the Mexican government.

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