Abstract

Mexico's oil production has been declining for the last decade. Therefore, the country has established strategies to increase oil production including the acquisition of new technology to produce unconventional reservoirs as well as the implementation of new regulations to enhance recovery rates from mature fields and develop the shallow-water and deepwater areas.

This paper presents a detailed analysis of Mexico's new hydrocarbons legislation with special focus on the contracting and bidding processes. This research also considers available data to identify the main technical challenges associated with the contractual areas which ultimately may be crucial in increasing oil production. Prospective production from main Mexican reservoirs was evaluated using a probabilistic method based on decline curve analysis (DCA) to forecast Mexico's oil production and its effect on North America oil production outlook.

The results of the technical evaluation of the contractual areas along with the analysis of the new policies indicate optimistic scenarios for the development of projects and a potential increase in oil production. These projects will foster offset decline of oil production by attracting experienced companies capable of facing current technical challenges and increasing upstream investment. Furthermore, areas of opportunity in the new regulations were identified to make the project conditions more attractive for companies and government. This study is built upon the exhaustive analysis of the new legislation and characteristics of the contractual areas in the context of the current internal and external factors to forecast Mexico's oil production scenario.

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