In the quest for gas and oil, a number of countries are starting to open up and change old policies in regards to these natural resources. One of the most recent changes is coming from Mexico. For more than seven decades, a company called PEMEX held a monopoly on the gas and oil market. In late 2013 though, the Mexican government put an end to this monopoly with their energy reform bill. In August of 2014, they began looking at the legalities of extracting these resources. This is starting to open up the possibilities for oil production to move into the country in a way that has not been possible up until now.
The outlook for the energy output in Mexico was bleak just a year or so ago. The EIA (US Energy Information Association) stated that they believe the oil production would drop from 3 million barrels a day to just 1.8 million by 2025. However, the changes to the structure and policy in the country have them revising their estimates. They now believe that in that same timeframe or less, the numbers will actually increase to 2.9 million a day. By 2040, this could go up to as much as 3.7 million barrels a day.
The gains will not be immediate though, as planning is still underway. They’ve scheduled auctions in 2015 that will give foreign investors control of some of the properties, and it will likely be several years beyond that before they can develop and actually implement plans. They estimate that by 2017, the increase in the number of rigs will be appreciable. Experts believe that both onshore and offshore drilling will be increasing substantially in the coming years.
Of course, this is still the early stages, and it is not yet known which oil fields will belong to which companies, and it remains to be seen just how PEMEX will be dealing with the new changes and reforms. During the first auction of sites, they plan to move 169 blocks, and only 60 of these will be for production. The remaining will be for exploration. Since 109 will be exploration blocks, there is always the chance that companies could actually find even more oil reserves in the country, as so much of it remains untapped right now. It is a very exciting time for those potential investors who are likely already gearing up for the auctions next year.
About OWI
Oil Works, Inc. is a complete drilling rig equipment manufacturer and service provider based in the Permian Basin for over 20 years. OWI’s product and service offerings include Derricks, Substructures, Drawworks, Mud Systems, Walking Systems, Power Generation, Control Systems, Iron Roughnecks and complete Rig Solutions built to API and ISO standards. OWI is also proud to offer 24/7 Service and Support.
