MEXICO CITY: Energy companies Chevron and Repsol decided to quit offshore oil and gas exploration areas in Mexico, the regulator for the sector said on Thursday (Sept 7), joining more than a dozen other companies after disappointing results.
Both had won the blocks in the Gulf of Mexico in a tender process, held by the government of former president Enrique Pena Nieto, who had sought to open the energy business to private investment and knowledge as part of a landmark reform.
Officials at Mexico’s hydrocarbon commission said Chevron sought and was granted approval to return a deepwater block off the coast of Tabasco state because the US company considered there to be “no favourable prospects for the block”.
Repsol received final approval to return a block in shallow waters in the same basin.
It was not immediately clear why though officials highlighted that the Spanish company had never carried out significant physical activities.
Both Chevron and Repsol had won the blocks as part of consortiums and have previously returned other blocks; companies pay a fee to the Mexican state for the time they carry out exploration and production activities.
Chevron confirmed the decision in a statement but said it would maintain an office in Mexico and continue to monitor industry developments in the country. Repsol said it would keep a deepwater block, its last, for now.
More than a dozen others – including BP, Shell and TotalEnergies – have started or completed the process of returning blocks partially or completely to the Mexican state, documents received through a Reuters records request showed. Some returned more than one block.
In an attempt to chip away the long-held monopoly of Mexican state energy company Pemex, the country had auctioned off more than 100 contracts to both foreign and local companies.
Despite much initial optimism, there have only been a handful of companies that have made significant finds in the blocks so far.
Among those are Italy’s Eni and Mexico’s Hokchi Energy as well as US company Talos Energy. – Reuters