Mexico City — US oil company Chevron is in the process of exiting the oil and gas exploration business in Mexico, following its entry in 2016 when it won its first oil contract under former President Enrique Peña Nieto’s energy reform.
The company will maintain its office in the country and follow the local industry’s development.
“While Chevron and our partners have decided not to continue exploratory work in Block 22, Chevron’s Gulf of Mexico business will maintain an office in Mexico City and will continue to monitor industry developments in the country,” Chevron’s head of external affairs in North America, Deena McMullen, told Bloomberg Línea.
Chevron Energía de México, a subsidiary of the US oil giant, received approval to fully return contract area 22 of oil auction 2.4 from the Mexican regulator, the National Hydrocarbons Commission (CNH), on September 7.
This contract, which Chevron won as a consortium in partnership with Mexico’s Pemex Exploration and Production (PEP) and Japan’s Inpex E&P Mexico, is located in deep waters of the Gulf of Mexico off the coast of Tabasco.
“The participating companies have concluded that there is no favorable prospect in the block,” stated Oliver Antonio Mayo Cruz, representative of the Mexican regulator’s legal unit, during a meeting of the CNH.
The company is also returning the entirety of area 3 of the Perdido Belt since November last year, while its partner Shell is fully returning to the Mexican government blocks 20, 21 and 23 that it won in the 2.4 auction, and in which Chevron bought a 40% stake in October 2019.
The return of Shell’s block 20 began in February 2023, according to a CNH document, but the full relinquishment was approved as an emergency measure due to the authority’s lack of a quorum in December last year.
Chevron joins the list of oil companies, such as BP and Equinor, that exited Mexico last year after lack of commercial success and changes in their business strategy, respectively.
The government of President Andrés Manuel López Obrador suspended oil auctions at the beginning of his administration in 2018 and set a production target of 280,000 barrels of oil per day for private companies by the end of his six-year term in 2024.