From the Field
E&P acreage relinquished back to CNH in Mexico
MEXICO CITY, September 14, 2018 – Mexico’s Consorcio Petrolero 5M del Golfo has relinquished 38% of the area of the onshore Contract Area 2 to oil and gas regulator the National Hydrocarbons Commission (CNH), local media reported on Thursday.
The consortium was awarded the 172-square-kilometre block in December 2015 during Mexico’s Round 1.3, but has decided to return a section because “technical studies showed no potential to produce hydrocarbons,” the CNH said.
Consorcio Petrolero 5M del Golfo will still be required to meet minimum work requirements in the block, which now covers 106 square kilometres and contains 70 previously drilled wells.
Contract Area 2 is located in the Burgos Basin and includes the mature Benavides and Primavera gasfields, which together produce around 276,743 cubic metres (9.77 mcf) per day. The block consortium is comprised of local players Sistemas Integrales de Compresión, Nuvoil and Constructora Marusa.
The consortium joins two other companies that have relinquished acreage won in Mexico’s earlier licensing rounds, mainly due to high royalty rates that made development unfeasible.
“We are going to have to get used to these types of returns because the operators are doing studies and delimitations and looking for the best routes in economic terms,” CNH commissioner Hector Acosta said, cited by local newspaper El Economista.