bp is considering the sale of oil assets in Mexico

Oil major BP is considering selling oil assets in Mexico to shift its focus to renewable energy sources in the country Bloomberg News.

The oil company, in partnership with France’s TotalEnergies, Equinor, Hokchi Energy and Qatar Petroleum, signed three exploration contracts six years ago.

The oil major has divested itself of its stake and is in the process of returning the blocks it secured to Mexico’s regulator, the National Hydrocarbons Commission, according to a company spokesman.

After Mexico introduced competitive oil auctions for the first time in eight decades in 2013 and 2014, several major oil companies, including BP, flocked to the resource-rich country.

Although firms have successfully discovered and developed oil fields, operating the fields has become a challenge for companies since Andrés Manuel López Abrador became the country’s president in 2018.

The president wanted to reverse energy reforms passed by the previous government and reduce competition from state-owned oil giant Pemex to private players.

The government has also called on oil companies to reduce their carbon footprint.

Earlier this year, BP won approval from CNH to buy back its stake in the shallow water contract, which was awarded in a consortium with TotalEnergies, Qatar Petroleum and Hokchi.

In February 2022, Total acquired BP and Equinor’s stake in one deepwater block.

Bloomberg News quoted a BP spokesman as saying that the oil company has determined that the shallow-water block has a “very low” probability of success and that the commercial viability of the prospect is unlikely.

Through Hokchi Energy, BP indirectly owns a stake in the Mexican blocks. Hokchi Energy also owns more than 500 STAs in Mexico.

Hokchi Energy is owned by Argentina’s Pan American Energy, which is a joint venture between BP and Bridas.