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Oil major BP is considering divesting oil assets in Mexico to shift its focus towards renewable energy in the country, reported Bloomberg News.

The oil firm, in partnerships with France’s TotalEnergies, Equinor, Hokchi Energy, and Qatar Petroleum, signed three exploration contracts six years ago.

According to a company representative, the oil major has divested its stake and is in the process of returning the blocks it secured to Mexico’s regulator, the National Hydrocarbons Commission.

Following the introduction of competitive oil auctions by Mexico for the first time in eight decades in 2013 and 2014, several major oil companies, including BP, flocked to the resource-rich country.

Although the firms were successful in discovering and developing oil fields, operating the fields for the companies became challenging after Andres Manuel Lopez Obrador became the President of the country in 2018.

The president looked to roll back the energy reforms approved by the previous government and reduce competition for state oil giant Pemex with private players.

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By GlobalData

The government also urged the oil majors to reduce their carbon footprint.

Earlier this year, BP received CNH’s approval to return its share of a contract in shallow waters that was secured in a consortium with TotalEnergies, Qatar Petroleum, and Hokchi.

In February 2022, Total acquired stakes held by BP and Equinor in one deepwater block.

A BP spokeswoman was cited by Bloomberg News as saying that the oil company determined that the shallow-water block had a ‘very low’ success probability and the prospect’s commercial viability was unlikely.

Through Hokchi Energy, BP indirectly owns a stake in the Mexican blocks. Hokchi Energy also owns more than 500 service stations in Mexico.

Hokchi Energy is owned by Argentina’s Pan American Energy, which is a joint venture between BP and Bridas.