Round Two in Mexico: 10 More Offshore Fields Awarded

Topics: Greenfields Offshore
The President Commissioner of Mexico’s National Hydrocarbons Commission (CNH) issued an opening address at this week’s offshore auction which included 15 oil and gas areas. Source: CNH.

The first tender of the second round of Mexico’s oil and gas licensing auctions issued 10 awarded areas to more than a dozen different oil and gas companies. In addition to Mexican-headquartered companies, other winning firms represented hail from Russia, Malaysia, US, and the Netherlands.

Five locations received no bids, including some that were understood to be gas-rich and therefore a challenging investment due to the relatively low-cost gas imports coming from the US.

Under the terms of these production sharing agreements, the profits are to be split between the government and the operating companies. The minimum government take for this round of auctions was set between 20-25%.

But borrowing a theme seen throughout much of the first round of licensing, several companies overshot the base requirements by large margins. Four bids were won by promising the maximum of 75% of the profits to state coffers.

The largest concentration of no-bid areas was along the Tampico coast while the areas offshore the states Veracruz and Tabasco attracted the most interest amongst oil and gas companies. The depths of these areas ranges from about 90 ft to 1,500 ft.Image source: Wood Mackenzie. (Click here for full size map)

 

Only a single lease was awarded based on the minimum profit sharing terms of 20.1%—a block to be jointly developed by Mexican-national oil company Pemex and its Colombian counterpart, Ecopetrol.

Most of the areas to be developed through the results of this auction are between 200-225 sq. mile in area. The irregular shapes of the blocks reflects the Mexican government’s attempts to draw the lines around potential and known reservoirs, and to help speed the arrival of new production.

The largest block in terms of area encompasses 375 sq mi and was won by a consortium of Total and Shell and holds up to an estimated 496 million bbl of oil.  The smallest block of 180 sq. mi. is to be leased by Italy-based Eni and Mexican independent Citla Energy and holds a potential 472 million bbl.

Area

Winning Bidder

Country of Company Headquarters

Block Size

(sq. mile)

Reserve Estimate

(Oil, millions of bbl)  

Block 2

Deutsche Erdoel, Pemex

Netherlands, Mexico

212

681

Block 6

Carigali, Ecopetrol

Malaysia, Colombia

216

516

Block 7

Eni, Capricorn Energy, Citla Energy

Italy, United Kingdom, Mexico

228

169

Block 8

Pemex, Ecopetrol

Mexico, Colombia

226

413

Block 9

Capricorn Energy, Citla Energy

United Kingdom, Mexico

217

571

Block 10

Eni

Italy

206

512

Block 11

Repsol, Sierra Perote

Spain, Mexico

206

949

Block 12

Lukoil

Russia

201

958

Block 14

Eni, Citla Energy

Italy, Mexico

180

472

Block 15

Total, Shell

France, the Netherlands

375

496

Round Two in Mexico: 10 More Offshore Fields Awarded

20 June 2017

Volume: 69 | Issue: 8