Mexico awards 10 shallow water GOM blocks in successful 2.1 bid round

The National Hydrocarbon Commission of Mexico awarded 10 out of the 15 exploration blocks that were in its Round 2.1 lease auction this week. The awarded leases cover prospective oil and gas acreage in Mexico’s shallow waters in the Gulf of Mexico.

Mexico Awards 10 Shallow Water GOM Blocks in Highly Successful 2.1 Round

Mexico awarded 10 out of the 15 exploration blocks that were offered in its Round 2.1 lease auction this week. Map: NHC

 

According to Haynes and Boones’ Mexico energy group, the punchlist from Round 2.1 looks like this:

  • 9 additional exploration wells were committed.
  • ENI was the company who won more blocks (3) than any other company.
  • Repsol participated for the first time.
  • Pemex won 2 blocks in consortia.
  • Most of the interest was on light crude oil and less in heavy crude oil and gas areas.
  • Average participation of the State (utilidad operativa) is 57.3%
  • The government take average was 77.4% (including income tax).
  • New players like Repsol, Ecopetrol, DEA Deutsche participated.
  • Shell won a block for the first time.
Good News for Mexico

Haynes and Boone’s Ricardo Garcia-Moreno interviewed for Oil & Gas 360 by Angie Austin at The Oil & Gas Conference in Denver, Colorado.

“This was good news for Mexico, considering that Mexico was competing with many other countries bidding out 42 PSC blocks, like China, India, Malaysia, Indonesia, Egypt, and others,” said Haynes and Boone’s Ricardo Garcia-Moreno. “This round showed a lot of interest from majors around the world. Mexico is offering competitive terms and contracts, and people are responding.”

Reuters reported that Russia’s Lukoil also took a block in this latest auction, as did a consortium of France’s Total SA and Royal Dutch Shell Plc.

Energy Minister Pedro Joaquin Coldwell said in a press conference that the potential output from the blocks auctioned could total 170,000 BOEPD, and investments could eventually reach $8.2 billion, according to Reuters.

Mexico’s energy reform aims to reverse waning production

Mexico’s oil and gas production, once prolific, has waned in the recent decade. The country’s leadership initiated a program to open development of its oil and gas fields in partnership with outside companies in order to attract investment that would jumpstart the development of its oil and gas resources. The lease auctions that began in 2015 have attracted international attention and have been increasingly successful.

 

Mexico Awards 10 Shallow Water GOM Blocks in Highly Successful 2.1 Round

Chart: NHC

 

Mexico’s reported oil production was 2,013 thousand barrels per day in April 2017, according to the Mexican government’s National Hydrocarbons Commission (NHC).

The NHC said the main oil producing fields in Mexico are Maloob, Zaap, Xanab, Ku and Xux. Those fields reached an aggregated production of 1,056 MBOPD, on average during April 2017. The fields with the main oil production are located in shallow water of the Gulf of Mexico, the commission said.

Referring to its successful Round 2.1 bid in partnership with Mexico’s national oil company, Pemex, Juan Manuel Delgado, President of Germany’s Deutsche Erdoel (DEA) Mexico said,“The award is an important first step to build a portfolio in the country. The Tampico-Misantla is a prolific basin and offers significant undiscovered resource potential. With Block 2, DEA obtains access to material prospective resources.”

DEA holds a 30% share, with Pemex holding the remaining 70% as operator. Block 2 comprises 549 sq. km and is located in the South-Western Gulf of Mexico in water depth ranging from 40 to 260 m. The initial four-year exploration phase includes drilling of one commitment well, DEA said in a press release.

Pemex was awarded two blocks: Block 2, as a consortium with Deutsche Erdoel AG (DEA), and Block 8, as a consortium with Colombian company Ecopetrol. In Block 8 Pemex is the operator with 50% participation. This area is located in the Southeastern Basins and spans a surface of  586 km2, Pemex said in a statement.

Good News for Mexico

Map shows the blocks offered in Mexico’s first five bid rounds for oil and gas development. Source: NHC

The National Hydrocarbon Commission of Mexico offers an interactive mapping and data portal on its website.


 CNH-R02-L01/2016 Shallow Waters BIDDING PROCESS RESULTS                              June 19, 2017

 

AREA COMPANY MAIN

HYDROCARBON

GOVERNMENT

OPERATING PROFIT

%

ADDITIONAL

INVESTMENT FACTOR

WEIGHTED

ECONOMIC OFFER

PROSPECTIVE

RESERVES MID-POINT (MMBOE)

AREA 1

(Tampico

Misantla)

Contractual area

was declared deserted

 

Light oil and dry gas

 

 

 

 

138.6

 

 

 

 

 

AREA 2 (Tampico Misantla)

Winner –  DEA

Deutsche in consortium with Pemex

 

2nd Place – ENI México in consortium with Lukoil International

 

 

 

 

 

Light oil and dry gas

 

57.92

 

 

 

 

 

55.14

 

1.0

 

 

 

 

 

1.5

 

63.493

 

 

 

 

 

63.261

 

 

 

 

 

280.4

AREA 3

(Tampico

Misantla)

Contractual area

was declared deserted

 

Light oil and dry gas

 

 

 

 

385.3

AREA 4

(Tampico

Misantla)

Contractual area

was declared deserted

 

Dry gas

 

 

 

 

403.9

AREA 5 (Veracruz) Contractual area was declared

deserted

 

Wet gas

 

 

 

 

466.1

 

 

 

AREA 6 (Cuencas del Sureste)

Winner – PC

Carigali in consortium with Ecopetrol Global

 

2nd Place – Murphy

Sur in consortium

 

 

 

 

Light oil

 

65.19

 

 

 

 

 

64.75

 

1.0

 

 

 

 

 

1.0

 

71.178

 

 

 

 

 

70.173

 

 

 

 

 

217.4

 

with Talos Energy

and Ophir México

 

 

 

 

 

AREA 7 (Cuencas del Sureste)

Winner – ENI

xico in consortium with Capricorn Energy and Citla Energy

 

 

 

2nd Place – Repsol Exploración in consortium with Premier Oil and Sierra Perote

 

 

 

 

 

Light oil

 

75.00

 

 

 

 

 

 

 

 

69.58

 

1.5

 

 

 

 

 

 

 

 

1.0

 

84.825

 

 

 

 

 

 

 

 

75.819

 

 

 

 

 

 

 

66.2

 

AREA 8 (Cuencas del Sureste)

Winner – Pemex

in consortium with Ecopetrol

 

 

 

Light oil

 

 

 

20.10

 

 

 

0.0

 

 

 

20.100

 

 

 

162.7

 

 

 

AREA 9 (Cuencas del Sureste)

Winner –

Capricorn Energy in consortium with Citla Energy E&P

 

2nd Place – ENI México

 

 

 

 

 

Light oil

 

75.00

 

 

 

 

 

75.00

 

1.5

 

 

 

 

 

1.5

 

84.825

 

 

 

 

 

84.825

 

 

 

 

252.5

 

AREA 10 (Cuencas del Sureste)

Winner – ENI

xico

 

2nd Place – DEA Deutsche in consortium with

 

 

 

Light oil

 

75.00

 

 

 

 

68.73

 

1.5

 

 

 

 

0.0

 

84.825

 

 

 

 

68.730

 

 

 

 

209.4

 

 

 

Diavaz G and P
 

 

 

 

AREA 11 (Cuencas del Sureste)

Winner – Repsol

Exploración in consortium with Sierra Perote

 

2nd Place – China Offshore Oil Corporation E&P México

 

 

 

 

 

Light oil

 

62.28

 

 

 

 

 

35.00

 

0.0

 

 

 

 

 

0.0

 

62.280

 

 

 

 

 

35.000

 

 

 

 

 

426.2

AREA 12

(Cuencas del Sureste)

 

Winner – Lukoil International Upstream Holding

 

 

 

Heavy oil

 

 

 

75.00

 

 

 

1.0

 

 

 

81.550

 

 

 

409.1

AREA 13

(Cuencas del Sureste)

Contractual area

was declared deserted

 

Heavy oil

 

 

 

 

212.9

 

AREA 14 (Cuencas del Sureste)

 

Winner – ENI México in consortium with Citla Energy

 

 

 

Heavy oil

 

 

 

37.27

 

 

 

0.0

 

 

 

37.270

 

 

 

207.3

 

AREA 15 (Cuencas del Sureste)

 

Winner – Total E&P in consortium with Shell

 

 

 

Heavy oil

 

 

 

30.11

 

 

 

0.0

 

 

 

30.110

 

 

 

188.4

 

COMPANY NUMBER OF

BLOCKS

BLOCKS AWARDED CONSORTIUM
 

ENI México

 

3

7

10

14

·    Capricorn Energy and Citla Energy

·    Individual

·    Citla Energy

 

PEP

 

2

2

8

·    DEA Deutsche

·    Ecopetrol

Citla Energy 1 9 ·    Capricorn
DEA Deutsche 1 2 ·    PEP
PC Carigali 1 6 ·    Ecopetrol
Capricorn Energy 1 9 ·    Citla Energy
Repsol Exploración 1 11 ·    Sierra Perote
Lukoil International

Upstream

1 12 ·    Individual
Total E&P 1 15 ·    Shell

 


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