Up-and-coming exploration of Mexico’s Gulf of Mexico (GoM) and onshore basins are set to reconfigure vast hydrocarbon provinces. Taking a closer look at frontier prospects can diversify resource estimates and bring new plays to the game. The rewards could bring billions of barrels of oil equivalent from unexplored conventional and unconventional opportunities across the country.

Mexico’s exploration was practically limited for more than seven decades to geophysical studies commissioned by state-owned Pemex. Now, as a result of the landmark energy reform, Mexico’s National Hydrocarbons Commission (CNH) expects to build on its 372,084 sq km (143,662 sq miles) of 3-D seismic data collected through 2014 with massive seismic coverage of prospective basins.

After the legal foundations for redefining the country’s oil and gas industry became a reality, CNH began approving one seismic survey after another. Earlier this year, CNH authorized 2-D and 3-D campaigns totaling 226,800 sq km (87,568 sq miles). Of these, 22 are in development and eight are yet to begin.

More than 2 million sq km (772,204 sq miles) of new 2-D and 3-D seismic are expected to lure companies to Mexico’s E&P sector. Exploration firms like CGG, PGS, TGS, Seitel and Dowell Schlumberger currently dominate the exploratory landscape while both foreign and local players are also taking a shot at new riches, an endeavor that is highly needed as Mexico’s reserves decline.

Pemex’s reserve restitution rates were practically unchanged in 2016, but actual reserves dropped by more than 10% due to stagnant exploratory activity. Also during the same year, the company drilled 22 exploratory wells with a 29% success rate—one of its lowest in years.

Newcomers will gradually make names for themselves, but Pemex will still lead the local oil and gas industry for some years. In addition, the state-owned company has the know-how and insight of the country’s hidden gems, making it an interesting partner for IOCs, NOCs or medium-sized operators to kick-start new projects.

Pemex’s first post-reform partnership is slowly coming together. BHP Billiton, the Australian mining and oil giant, landed a joint venture for one of the most interesting deepwater blocks in Mexico’s GoM. Exploration plans for Trion, a farm-out that is expected to house almost 500 MMbbl of oil in two blocks, are already underway.

Trion is just one of many potential assets that Pemex wants to develop with private partners. Both conventional and unconventional blocks are in the crosshairs. And with new seismic surveys offshore and onshore, upcoming licensing rounds may be even more enticing for newcomers.

Eni’s recent find already set a precedent for companies looking to come in on their own. The company drilled the first well post-reform and hit light oil reservoirs, which may hold more than 800 MMbbl of oil in place.

In February, SENER and CNH revealed that 23 deepwater, 17 shallow-water and 26 onshore exploration areas—with a total of 10.8 Bboe of prospective resources—will be up for grabs in rounds 2, 3 and 4. Additionally, a total of 18 unconventional exploration blocks in Tampico-Misantla, Burgos and Burro-Picachos basins (in order of prospective resources) will offer a combined 18 Bboe.

Drilling activity in production blocks offered during the three rounds could lead to new plays.

Mexico will also auction 144 onshore, 39 shallow-water and two offshore heavy oil production blocks with combined remaining resources of 2.94 Bboe.

Specific dates for all rounds have not been scheduled, but President Enrique Peña Nieto’s current administration aims to close its six-year term with Round 3 by year-end 2018.

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