San Francisco: Mexico’s historic first open oil-rights auction failed to hit pay dirt on Wednesday, sputtering and bubbling instead as only two of 14 available oil and gas blocks received bids.
Both of the successful bids were for shallow water exploration and production contracts and they were won by a consortium comprising Mexico’s Sierra Oil & Gas, US firm Talos Energy and Britain’s Premier Oil.
They each included offers of substantial pre-tax profits – 55.99% and 68.99% – to the Mexican government,
None of the other 12 blocks received bids that met the Mexican authorities’ minimum requirements.
Among the groups who passed up chances to bid on rights in the Gulf of Mexico were ExxonMobil, Chevron and Total.
The period leading up to the auction had seen a number of potential bidders withdraw.
Beforehand the energy ministry had said that five successful bids would make for a successful auction so that target was missed badly.
Experts said that the low price of oil and the fact these were shallow water blocks accounted for some of the lack of interest.
This auction marks the first steps toward reform of an industry which has been monopolised by state firm Pemex since nationalisation in 1938.
Pemex itself chose to opt out of this first phase of bidding.