The opening of Mexico’s energy sector to private and foreign companies is drawing dozens of geological-data firms that plan to crisscross the Gulf of Mexico and onshore areas in search petroleum riches that went undiscovered during the eight-decade monopoly of Petróleos Mexicanos.

Mexico’s oil regulator, the National Hydrocarbons Commission, approved four Norwegian companies this week to focus on the oil-rich Gulf of Mexico, including deep-water areas where state-owned Pemex, Mexico’s lone oil producer, has done little exploration and has no production.

Geological-data companies TGS, Petroleum Geo-Services ASA, Dolphin Geophysical and Spectrum ASA will have rights for 12 years to sell information gathered in seven Gulf areas, but copies of their data will be given to the hydrocarbons commission for private review.

The seismic surveys are expected to give a more complete picture of areas that haven’t yet been studied or were surveyed many years ago with less sophisticated technology.

“This is excellent news because it will multiply and potentiate the capacity for exploration,” hydrocarbons Commissioner Edgar Rangel said on Thursday.

The four permits for data-gathering are the first batch in the wake of the energy overhaul last year that opened Mexico’s oil industry to private firms in the hope of reversing a decadelong slide in production.

Mexico is in the early stages of its first round of auctions for oil blocks under the energy overhaul, with the first contracts for shallow-water exploration to be awarded in July.

Pemex has provided its geological data to the hydrocarbons commission, which has set up data rooms for oil and gas companies to analyze the studies before making bids.

In recent decades, Pemex has focused much of its energy on big, shallow-water deposits concentrated in the southern Gulf, several of which are now at peak production or in decline. The end of an era of “easy oil” was a key selling point of the energy overhaul, which leftist parties opposed as a sellout to foreigners.

The four Norwegian firms will conduct two-dimensional geological studies in areas of the Gulf covering about one million square kilometers, according to the commission. Some of the areas overlap, meaning more than one company will have the data.

The commission says there are 22 more firms seeking permission to carry out geological mapping—including more sophisticated three-dimensional studies—that will provide a wealth of data and possibly lead to significant new oil and gas discoveries.

No company will have exclusive access to any geological area, and all of the firms must pay fees to the commission to carry out the studies.

In addition to the Gulf of Mexico, where most of Pemex’s 2.3 million barrels of daily oil production is concentrated, some oil and gas companies are expected to bid for onshore oil blocks.

Mexico is believed to have significant oil and gas deposits in shale-rock formations, but few geological studies have been done there.

In the current environment of low oil prices, the hydrocarbons commission may put few shale areas up for bids this year since production costs are higher than at other onshore basins or in the shallow waters of the Gulf of Mexico.

Source: The Wall Street Journal