Mexico’s Rush to Add Oil Wells Falters, Hobbling Needed Growth
- Closed tenders limited bidders to contain costs, quicken work
- Some ‘survival mode,’ bidders are falling short, analyst says
Photographer: Susana Gonzalez/Bloomberg
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A drive by Mexico’s national oil company to drill new wells at 20 “priority” fields largely using smaller, local service providers is faltering, with the company expected to re-bid some of the work in the year ahead.
Industry analysts say they see little evidence a decision by Petroleos Mexicanos to use a closed bidding process with pre-selected companies is speeding up drilling at a time when the government is pressing to boost a stalled economy. The bidding, completed by May, leaned chiefly on local contractors in “survival mode” that bid low just to get the work, said Pablo Medina, vice president of Welligence Energy Analytics.