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Mexico wants more bids for oil exploration

Wednesday, July 22, 2015

Mexico will likely seek additional bidders, following disappointing results in the country's first public oil auction in 83 years.

Buyers took only two of 14 blocks, which were offered for development.

The government had expected to award as many as seven blocks, each for around $1.3 billion.

Money markets reacted to the result, as the peso slumped to its lowest point in more than five years against the US dollar.

In a period of low-cost oil, many potential buyers expected the government to lower the cost.

But Energy minister Pedro Joaquin Coldwell defended the price as reasonable over a long term.

In the expectation that new investment would energize the oil-gas sector, Mexico last year ended a 78-year monopoly of the oil-gas sector by state-owned Petróleos Mexicanos.

Mexican oil production fell from 3.5 million barrels a day in 2004 to 2.5 million last year.