Exploration and production companies operating in Mexico are increasingly looking to exit the market as global trends and local factors weigh on portfolio strategies, observers told S&P Global Platts.

The decision to explore mergers and acquisitions comes as companies adjust their strategies to global decarbonization efforts, observers said, but the policy of President Andrés Manuel López Obrador of not continuing the liberalization of the sector started by the previous administration has accelerated the trend.

M&A options are being pondered particularly by small exploration and production companies operating contracts in onshore deposits, observers said. International and Mexican companies obtained contracts to explore or develop onshore mature fields during the oil rounds of 2015 and 2016, data from the National Hydrocarbons Commission, or CNH, shows. The fields had been abandoned by state oil company Pemex in the 1980s after the discovery of Cantarell, the largest producing field in Mexican history, and offered proven resources.

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