Second phase of Mexican offshore oil auction is much more successful

Second phase of Mexican offshore oil auction is much more successful

Mexico’s moves to improve transparency in the process of selling its offshore oil and gas sites got the thumbs-up from international oil producers on Thursday as the latest auction of blocks in the Gulf of Mexico drew far more interest than July’s first attempt.

The Mexican government is in the process of privatising its oil industry and opening up the bid process after 75 years of domination by state oil firm Pemex.

Bidding requirements and fiscal terms had been loosened last month and it seemed to have the desired effect as three out of five blocks were sold.

Notably, nine companies vied for the lease to a shallow water block thought to hold more than 700m barrels (bbl) of oil.

Another block had five bidders while a third had just one. Two blocks were void after attracting no bidders.

By contrast in July only two of 14 offshore exploratory properties were sold, which was the debacle that forced Mexico’s hand to make the bid process for favourable to private bidding firms.

Thursday’s three winning bids were from: Italy’s Eni; a consortium including Argentine firm Pan American Energy (a subsidiary of BP); and a partnership including Fieldwood Energy of Houston, Texas.

Unsuccessful bidders included Russia’s Lukoil, Norway’s Statoil and China’s CNOOC International.

Donal Scully

With 28 years experience writing and editing for newspapers in the UK and Hong Kong, Donal is now based in California from where he covers the Americas for Splash as well as ensuring the site is loaded through the Western Hemisphere timezone.

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