Mexico’s first invitation to bid on its second round of hydrocarbon
auction has attracted the attention of some of the world’s largest oil
“What is especially interesting about this round is how big an
opportunity this is for oil companies,” George Baker, director of
Houston-based consultancy Mexico Energy Intelligence, told S&P Global Platts
On June 18, Mexico’s National Hydrocarbon Commission will announce the
winners in this round 2.1 of the auction. In this round, there are 15
shallow-water exploration blocks available for auction.
These shallow-water blocks cover a combined area of 8,908 sq km and hold
prospective resources of 4 billion boe located. They are in the provinces of
Tampico-Misantla, Veracruz, and the Cuencas del Sureste basin.
The largest blocks in the auction are: block four, with 403.9 million
boe, mainly dry gas; block five, with 466 boe, mainly wet gas; block 11, with
426 million boe, mainly light oil; and block 12, with 409 million boe, mainly
CNH has prequalified 36 bidders for round 2.1, compared with 14 bidders
in round 1.1 and 25 bidders in round 1.2.
The increase in the number of participating companies in the auction is
proof of Mexico’s growing convening power, as a result of how dynamic the
market has become, Baker said.
“You need enough activity to create economic gravity to pull in other
players and more suppliers and assets,” he added.
JOINT BIDS TAKE FRONT SEAT
Of the 36 bidders prequalified by CNH, 20 have been selected to
participate individually in round 2.1. The bidders are: Chevron, CNOOC,
ConocoPhillips, DEA Deutsche, Ecopetrol, ENI, Hunt Overseas Oil, INPEX,
RN-Shelf-South, Lukoil, Murphy, Noble Energy, ONGC Videsh, Ophir, Pan
American, PC Carigali, Pemex, Repsol, Shell, and Total.
The other 16 have been approved for bidding as consortiums: Capricon
Energy with Citla Energy, Chevron with Inpex and Pemex, DEA Deutsche with
Diavaz, DEA Deutsche with Pemex, ENI Mexico with Citla, ENI Mexico with
Lukoil, Noble Energy with Ecopetrol and PC Carigali, PC Carigali with
Ecopetrol, Premier Oil with Sierra Perote, Repsol with Premier Oil and Sierra
Perote, Repsol with Sierra Oil, and Total with Shell.
“It is interesting to see how flexible the market is becoming regarding
joint bids,” Luis Gomar, a Mexico City-based partner-lawyer in Thompson &
Knight’s International Energy Practice Group, told Platts on Thursday.
“It is positive to see how Mexican companies like Sierra and Diavaz are
participating in the auction in joint bids with international companies. This
was one of the objectives of the reform,” Gomar said.
Analysts told Platts that Ecopetrol and ConocoPhillips are among the
players to follow in the auction.
“It is a surprise that ConocoPhillips said they don’t want to operate in
the US Gulf, but now they are looking to do it in Mexico,” Baker said. This is
the first time that the American oil company has registered for a Mexican oil
auction, he added.
Colombia’s state oil company Ecopetrol had registered for previous
auction rounds but never submitted a bid, said Gomar. The company has multiple
operations in the US Gulf region.
For round 2.1, Ecopetrol has taken an aggressive position by
participating in more than one joint bids.
–Daniel Rodriguez, firstname.lastname@example.org
–Edited by Arnab Banerjee, email@example.com