3-year hiatus on oil auctions promised

Associated Press

Mexico’s new president says he will take a three-year break from awarding new oil exploration contracts in order to judge the results of contracts already awarded.

President Andres Manuel Lopez Obrador says he wants more investment from private firms that have been awarded concessionary exploration contracts under reforms enacted by his predecessor, Enrique Pena Nieto.

Lopez Obrador said Dec. 5 he will use the three-year break to evaluate how much investment and production are actually produced by the foreign firms that bid on offshore blocks of oil fields.

He complained the firms haven’t invested much and haven’t produced any oil. He pledged not to cancel existing contracts.

Falling production forced the previous government to loosen the grip of Mexico’s state-owned oil company, which doesn’t have enough money to develop deep-water fields.