Mexico’s First Big Oil Tender: The Results
On Monday, Mexico announced the results of its historic tender of 10 offshore drilling blocks in the Trion field, which is divided into the Perdido Fold Belt and the Salina Basin, both located in the nation’s namesake Gulf.
Block 1: China Offshore Oil Corporation (CNOOC) won Perdido’s first block with a sky-high royalty bid of 17 percent and a two-well commitment.
Block 2: Total and Exxon took the second Perdido block with a five percent royalty and a two-well offer.
Block 3: The Chevron, Pemex and Inpex partnership won the belt’s third block with a 7.44 percent royalty, but without a well commitment.
Block 4: Said to hold 540.5 million barrels of oil equivalent in light and extra light crude, this 725-square mile block has been awarded to CNOOC as well. The company offered a 15 percent royalty bid and a one-well guarantee.
Salina Basin Blocks
Block 1: The Statoil, British Petroleum and Total consortium won the first block offered in Salina, with a 10 percent royalty and a single-well commitment.
Block 2: Reuters reports that no company had submitted bids for this block.
Block 3: A ten percent additional royalty and a single-well commitment got the Statoil, BP and Total consortium this block – making it the trio’s second win.
Block 4: Salinas Sureste block 4 went to Petronas and Sierra, due to their 22.99 percent royalty offer, without well commitments.
Block 5: The Murphy/Ophir/PC Carigali/Sierra Offshore group won this Salinas Sureste block with a 26 percent royalty and a single-well commitment.
Block 6: This one went deserted, too.
This auction is a huge milestone in Mexico’s comprehensive energy reform, which began at the end of 2013.
With Pemex’s monopoly now over after 75 long years, the auction will bring new foreign investment to the country, aiming at revitalizing the sector. As a result, the US Energy Information Administration (EIA) has upped Mexico’s 2040 oil and gas production forecast by 76 percent.
By Zainab Calcuttawala of Oilprice.com
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