As stated in the passage, the public auction

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                                                                                                                            The good oil boys club

      It should have been a day of high excitement. A public auction on July 15th marked the end of a 77-year monopoly on oil exploration and production by Pemex, Mexico`s state-owned oil company, and ushered in a new era of foreign investment in Mexican oil that until a few years ago was considered unimaginable.

      The Mexican government had hoped that its firstever auction of shallow-water exploration blocks in the Gulf of Mexico would successfully launch the modernisation of its energy industry. In the run-up to the bidding, Mexico had sought to be as accommodating as its historic dislike for foreign oil companies allowed it to be. Juan Carlos Zepeda, head of the National Hydrocarbons Commission, the regulator, had put a premium on transparency, saying there was “zero room” for favouritism.

      When prices of Mexican crude were above $100 a barrel last year (now they are around $50), the government had spoken optimistically of a bonanza. It had predicted that four to six blocks would be sold, based on international norms.

      It did not turn out that way. The results fell well short of the government’s hopes and underscore how residual resource nationalism continues to plague the Latin American oil industry. Only two of 14 exploration blocks were awarded, both going to the same Mexican-led trio of energy fi rms. Offi cials blamed the disappointing outcome on the sagging international oil market, but their own insecurity about appearing to sell the country’s oil too cheap may also have been to blame, according to industry experts. On the day of the auction, the fi nance ministry set minimum-bid requirements that some considered onerously high; bids for four blocks were disqualifi ed because they failed to reach the offi cial fl oor.

                                                                (Source: http://www.economist.com/news/business/21657827-

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