Mexico Whets Foreign Oil, Gas Appetite: Awards 10 Shallow Water GOM Blocks
Mexico’s Gulf of Mexico shallow water auction June 19 awarded 10 of 15 blocks to the likes of Eni, Royal Dutch Shell and Total – suggesting the nation’s bet on foreign oil company investment will pay off.
Round 2.1 in the nation’s auctioning process for private companies to lease southern blocks drew participation from 20 companies from more than a dozen countries. Pablo Medina, Wood Mackenzie’s senior analyst for upstream Latin America, live-Tweeted on the proceedings, which were broadcast live from Mexico’s National Hydrocarbons Commission headquarters in Mexico City.
Awarding two-thirds of the blocks to international companies is “an amazing result for Mexico,” Medina Tweeted.
Almost 20 percent of the United States’ total crude oil production comes from the Gulf of Mexico – a basin of opportunity for the nation for decades – and now, oil and gas companies from around the world are tapping into Mexico’s southern share of the briny waters.
In January, the U.S. Gulf produced about 1.7 million barrels of oil per day (bpd), according to the U.S. Energy Information Administration. That’s more than enough to easily power the consumption needs of France, Indonesia or the United Kingdom.
“Geology doesn’t know geographical boundaries so if there’s oil on the northern side, I’m pretty sure there’s going to be oil on the southern side,” said Scott Munro, vice president of Americas, Europe and Africa at McDermott International. “But then, that’s just a guess – it’s definitely a forward-looking statement.”
It’s a guess that many companies are banking on.
Mexico’s Gulf of Mexico acreage is vastly underexplored and certainly unexploited compared to the waters of the United States – and with the emergence of Mexico’s newly open market, the nation is virtually awash in offshore opportunity.
Three offshore bidding rounds since 2015 have yielded interest from supermajors to private companies trying to make it as first-movers. Already, Exxon Mobil Corp., Total, Chevron, Statoil and BP have shallow water concessions in the Sureste Basin, and a second deepwater lease auction is scheduled this year.
Courting Currency
To be sure, Mexican government leaders are anxious to catch up. On May 21, a well was spudded in Mexico’s Gulf without the input of long-time monopoly Petróleos Mexicanos (Pemex). The joint venture of London’s Premier Oil, Houston’s Talos and Mexico’s Sierra Oil & Gas spudded the first private…
