Mexico Takes Bids on 25 Offshore Oil Fields Taking One Step Closer to Privatization & Reviving the Energy Sector

Some private Mexican oil and gas firms have emerged victorious on Tuesday after winning back nearly all of the contracts in an auction by the Mexican government of onshore fields. The Mexican oil firms were forced to wait on the sidelines for almost eight decades due to the Mexican government's control of the oil industry.

According to Yahoo, this was by far Mexico's most successful auction yet, with 25 blocks drawing bids on Tuesday, despite initial disappointing results in the first two auctions. The website said that Mexican government officials gave exploration and production rights to mostly Mexican private firms. 

The report also said that the officials awarded one Canadian firm as well as consortiums involving U.S. and Dutch investments. There were reportedly no major multinational oil companies who participated in the auction. These private Mexican firms will be cleared to produce crude oil for the first time in over eight decades after a long monopoly of Petroleos Mexicanos, which was fractured last year. Mexican firms won 22 of the 25 contracts. 

Mexico's economy has been severely affected by the huge drop in world oil prices. Economic analysts have previously blamed the drop for the tepid interest shown in the previous biddings. In July of this year, two of 14 blocks had attracted contracts. In September, it was reported that two of five blocks did not receive bids.

The leases that were auctioned on Tuesday are all onshore. All are situated in the Gulf coast states of Tamaulipas, Veracruz and Tabasco. The leases are also located in Nuevo Leon in the north and Chiapas in the south.

Government officials said that these blocks will produce the first oil from Mexico's energy reform. It is reported that 77,000 barrels of crude petroleum will be produced when they reach peak production in three years. Nineteen of these blocks were reported to be active and producing some oil.

"These levels of success are not being observed in any other country in the world," said Juan Carlos Zepeda, Commissioner of Mexico's oil regulator, in a report with Bloomberg. "We are pleasantly surprised and pleased with the demand and participation today."

"The primary objective of this round was to plant the seed to grow the Mexican oil industry," Lourdes Melgar, Mexico's Deputy Energy Minister told Bloomberg. "That goal was achieved." 

The publication said that the Mexican government will be receiving 63 percent of the total revenue from the development and production of the oil fields.