Mexico awards 10 blocks in 2nd round bid

Mexico awards 10 blocks in 2nd round bid

Jun 20, 2017
3 min read
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Mexico has awarded 10 of 15 blocks it offered international bidders during its second bid round for shallow water acreage in the country with big names like Shell, Eni and Total all winning blocks.

A total of 36 individuals and consortia had initially pre-qualified to bid and 20 companies and consortia submitted offers for the second bid offering of 15 shallow-water areas.

Each of the blocks cover an area of 594 square kilometres, and the average estimate for the combined prospective resource is about 1.58 billion barrels.

"We are highly satisfied. It’s a very high percentage of blocks, which fills us with satisfaction even when the crude prices aren’t the best," energy secretary Pedro Joaquin Coldwell told newswires during a press conference afterwards.

Eni, in a consortium with UK-listed Cairn and Mexican start-up Citla, won out for the hotly contested Area 7 in the south-east region of the country. Its offer was for a 75 per cent additional royalty to the state with a two-well work programme.

The Cairn-Citla group also won the bid for Area 9 attracting the identical offers of 75 per cent additional royalty and two additional wells.

Cairn Energy CEO, Simon Thomson, said: "We are delighted with these awards which we believe provide an exciting opportunity to build a strategic portfolio over time in this highly prolific yet under-explored region. Cairn and its partners have identified and secured our favoured blocks with multiple stand-alone prospects and numerous follow-on tie-back opportunities based on 3D seismic data."

Eni also took Area 10 in the south-east basin, pledging the maximum additional royalty of 75 per cent and two additional wells. Alongside Citla, it also took Area 14 with an offer of 37.27 per cent additional royalty to the state.

Shell secured its first entry into Mexico, alongside French major Total taking Area 15 in the south-east basin. Area 6 went to a consortium of Malaysia's Petronas and Colombia's Ecopetrol

Mexico's Pemex set up its third and fourth partnerships since the energy reforms after bidding jointly with Germany's Dea Deutsche Erdoel for Area 2 in the Tampico-Misantla basin and with Colombia's Ecopetrol for Area 8 in the south-east basins.

The final blocks went to Russia’s Lukoil for Area 12, a Petronas-Ecopetrol consortium was awarded Area 6 and Spain's Repsol alongside Sierra Oil & Gas took Area 11.

Other blocks outside of the south-east basin attracted little interest, with Areas 1, 3, 4, and 5 receiving no bids.