Chevron, Repsol Return Gulf Blocks to Mexico

Pair joins other E&Ps who have halted work in the area after disappointing results.

Flag of Mexico waving in the wind, over partly cloudy sky
Source: Getty Images.

Officials at Mexico’s Hydrocarbon Commission said Chevron sought and was granted approval to return a deepwater block off the coast of Tabasco state because the company considered there to be “no favorable prospects for the block.”

Separately, Repsol received final approval to return a block in shallow waters in the same basin. Officials highlighted that the Spanish company had never carried out significant physical activities on the tract.

The duo joins more than a dozen other companies who have abandoned E&P in the Mexican Gulf after disappointing results.

Both the Chevron and Repsol blocks were won as part of consortiums and have previously returned other blocks. Companies pay a fee to the Mexican state for the time they carry out E&P activities.

Chevron confirmed the decision in a statement but said it would maintain an office in Mexico and continue to monitor industry developments in the country. Repsol said it would keep a deepwater block—its last, for now.

To chip away the long-held monopoly of Mexican state energy company Pemex, the country had auctioned off more than 100 contracts to both foreign and local companies.

Despite initial optimism, there have only been a handful of companies that have made significant finds so far including Eni, Hokchi Energy, and Talos Energy.