From the Field

Oil contract reviews begin in Mexico

MEXICO CITY, September 19, 2018 – Mexico’s incoming administration has launched its assessment of more than 100 E&P licences and PSCs awarded in recent bidding rounds, international media reported Tuesday.

The first contract to come under review is that for shallow-water Block 7, awarded to a consortium of US independent Talos Energy, the UK’s Premier Oil and Mexico’s Sierra Oil & Gas in Round 1.1 in July 2015.


Located in the Southeastern Basins, Block 7 contains the major Zama field, discovered in July 2017. The field is estimated to hold up to 2 billion barrels of mainly light oil, and a final investment decision for its development is expected by late 2019 or early 2020. However, the partners could face delays depending on the results of the incoming administration’s review.

President-elect Andrés Manuel López Obrador has said he would suspend bidding rounds for E&P acreage until 2019 while his administration reviews contracts signed under the reforms, to ensure they did not harm the interests of the country.

“They should check everything,” Sierra CEO Ivan Sandrea told Reuters. “Along with the entire industry, I’m most interested that they clear up all of their thoughts that there was manipulation.”

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