Oct 20, 2018 | Updated: 04:34 PM EDT

Mexico To Finally Produce Oil; Signs 7 New Contracts For Production In Gulf Of Mexico

Mar 14, 2017 01:53 AM EDT

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Mexico has signed seven new contracts for oil production in the Gulf of Mexico on Friday. The National Hydrocarbons Commission (CNH) has initiated the signing bringing seven deep water explorations and production that will stop Mexico from auctioning oil from other countries.

The said contracts are just addition to the contracts signed last week. The following oil companies are the ones that signed a contract with Mexico - Mexican state oil company Petroleos Mexicanos (Pemex) with BHP Billiton, American oil super major Chevron Corp. and Japan's Impex. These contracts have all been bid last year and were awarded in December. The new contracts are going to take place in the blocks of the Gulf of Mexico. Three in the Perdido Fold Belt, a 40,000 sq.-kilometer (15,450 sq.-miles) area located in the northwestern part of the Gulf and four in the Saline Basin, situated in the southern part of the Gulf.

The Gulf of Mexico will definitely be explored and in the Perdido Fold Belt, block one and four will be explored by a Chinese corporation, China National Offshore Oil Corporation. For block two, a French and American oil companies have signed for it, France's Total and the United States' Exxon Mobil Exploration. Meanwhile, in the Saline Basin, Norway's Statoil, the United Kingdom's BP Exploration and Total's local unit has signed Block one and three. Block four was signed up by Malaysia's Petronas, PC Carigali Mexico Operations and Mexico's Sierra Offshore Exploration. Lastly, the block 5 is signed by U.S. energy company Murphy Oil's local unit, the UK's Ophir Energy, PC Carigali and Sierra Offshore.

All contracts have a 35-year life span. At the same time, all contracts can be extended for 10 more years and an additional of five years after that, reported Petroleum World. This contracts and exploration will definitely increases the low and declining crude output of the country.

All the companies that have signed the contracts will not violate any law as they "are fully qualified and have the capital and experience to undertake projects of these dimensions (in which) there is no room for experimentation or error," Energy Secretary Pedro Joaquin Coldwell said.

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