In the most recent auction in Mexico, 19 out of 29 bids were awarded, sharply higher than the seven expected by the government. Officials estimate that the awarded blocks could eventually attract $93 billion in investment.
A series of recent deepwater discoveries has demonstrated that the offshore oil sector is beginning to rebound after years of subdued activity, despite increasing interest in onshore shale drilling.
There is still a long way to go before Mexican production can grow in a meaningful way, but several years since the landmark liberalization of the country’s energy sector, the situation is finally moving in the right direction.
OPEC member Nigeria has taken a major step in improving its country’s energy sector by restructuring its state-run oil company. The move is significant since the NNPC has a longstanding history of corruption and the country is dealing with a large budget gap.
Mexico’s crude oil production has declined for 11 consecutive years, and a recovery is nowhere in sight.
Mexico's historic initial auction, although it was a bust, is a positive reflection of how major producing countries in Latin America are moving away from resource nationalism—for now, at least—as they struggle in the current low oil price environment that shows no sign of turning around.