By Martin Clark
Mexico may not generate the same level of excitement as Brazil’s booming offshore sector, but there’s still plenty of oil and gas in the ground there too. In fact, it’s actually the ninth largest oil producer in the world, or eleventh in terms of net exports.
And sitting right next door to the United States means there’s a ready market close by.
Canada’s International Frontier Resources Corp. (IFR), which has a bunch of assets at home and across the border in the USA, is now looking to go the next step and delve into this potential.
The TSX Venture listed group this week created a new Mexican subsidiary, Petro Frontera S.A.P.I de CV (Frontera) to pursue opportunities there. Specifically, the company says the new unit will study and bid on assets in Mexico’s initial oil and gas energy reform bid round taking place this year.
Mexico’s landmark energy reform announced in 2014 established a new legal framework for the nation’s energy sector. It is expected to pull in billions of dollars in foreign investment from oil companies worldwide.Last August, SENER (Secretaria de Energia de Mexico) officials announced the details of the first bid round.
It includes 169 blocks in total, comprised of 109 exploration blocks and 60 production blocks, with 14 blocks under joint ventures with PEMEX, the state oil company. The tender process commenced during the first quarter of 2015, and production-sharing agreements are expected to be awarded throughout the year.
IFR’s president, Steve Hanson, said he believed Mexico to offer “excellent growth potential in the current environment”.The national oil company has reported historical finding development and production costs of less than US$25 per barrel, which places Mexico in the top quartile worldwide.
Hanson added that his company is now “actively” preparing to participate in the first open bid rounds expected later this year.IFR’s current interests include projects in the Northwest Territories, Southern Alberta and in North West Montana. “We are seeking to advance the development of our highly prospective, under explored regions,” he added.
The company also announced its 2014 results earlier this month, showing a net loss for the year ending December 31, 2014 of US$561,465, almost double the loss for 2013.
Oil revenues increased, however, rising to US$922,355 for the past year compared to US$792,800 back in 2013.