Mexican state-owned oil company Petroleos Mexicanos will not participate in the initial phase of the so-called Round One of oil tenders, which will mark a historic first step in the opening of the country's energy industry.
"You have to keep in mind two factors. Pemex has seen its revenues fall by more than 50 percent due to the decline in oil prices," Energy Secretary Pedro Joaquin Coldwell told foreign correspondents on Wednesday in announcing the company's decision.
Pemex also obtained 83 percent of Mexico's proven and probable reserves and 21 percent of its potential resources in a so-called "Zero Round" of non-competitive bidding last year, he recalled, adding that the company therefore "deemed it better to concentrate its resources" on future bidding processes.
Eighteen individual private companies, including U.S. oil supermajors ExxonMobil and Chevron, and seven private consortia are competing in the phase-one auction of 14 shallow water exploration blocks off the Gulf Coast states of Campeche, Tabasco and Veracruz.
But four other companies that had been pre-qualified to bid for the production-sharing contracts, including Colombian state-controlled oil company Ecopetrol, have pulled out of the first auction, it was announced on Monday.
The bids will be unsealed on July 15 and the winners will be announced that same day.
Coldwell tried to lower expectations ahead of the awarding of the first contracts, saying that because of the current oil-price scenario it would be acceptable if between 30 percent and 50 percent of the contracts on offer are awarded.
Mexico is starting small with its offer of shallow-water fields and onshore blocks this year and saving the big prizes - deep-water fields in the Gulf of Mexico - for later tenders.
The initial 14 blocks will be awarded in the first of five phases of Round One, which comprises a total of 169 onshore and offshore blocks.
The awarding of the initial batch of 14 25-year production-sharing contracts follows a December 2013 oil sector overhaul, a package of constitutional changes that ended Pemex's 75-year-old monopoly and opened Mexico's energy sector to private investment.
Mexico's government is looking to the energy overhaul to attract tens of billions of dollars in investment and reverse a roughly 30 percent decline in Mexico's oil output, which peaked at 3.38 million barrels per day in 2004 and currently stands at roughly 2.3 million bpd.