Pemex wins 7 of 16 contracts in ‘very encouraging’ round 3.1 of Mexico’s oil tenders
In what turned out to be a somewhat disappointing round, the Mexican state-owned Oil and Gas company Petroleos Mexicanos (Pemex) was the big winner by obtaining seven contracts in total, one of which was won alone and the rest in consortium with other oil companies of Dutch, French, Spanish and German capital.
The National Hydrocarbons Commission (CNH) today awarded only 16 of the 35 shallow water areas that were bid in round 3.1, the remaining 19 were deserted.
At a press conference following the auction, Energy Secretary Pedro Joaquin Coldwell described the results as “very encouraging,” noting they would generate US$ 8.6 billion in investments over the duration of the contracts.
Mexico’s oil industry has shown it has competitive advantages “due to not only the nation’s geology but to the transparency in which these bid rounds have been conducted,” he said.
Of the three areas on offer, the first two were relatively unfamiliar to the industry.
The first was Burgos Basin, known as Mexico’s leading producer of non-associated gas, but the offshore is relatively unknown. Pemex had already drilled Burgos offshore several years ago without success.
The fields that Pemex obtained are close to the assignments that it currently has in the Gulf of Mexico, which will create synergies in exploration activities and eventually in its development, in areas where infrastructure already exists.
In Round 3.1, Pemex won in the marine region of Tampico-Misantla-Veracruz, contract areas 16 and 17, in consortium with Deutsche Erdoel and Compania Espanola de Petroleos; while the area 18 was won in association with the latter.
In fact, the Mexican oil company had already won Block 2 of the Tampico-Misantla Basin of shallow waters, in consortium with the Deutsche Erdoel, a company with which it is also associated to develop the Ogarrio land field in Tabasco through a farm out tendered by the CNH.
While in the Southeast Basins, Pemex was individually awarded area 29, as well as areas 32 and 33 in partnership with the French company Total; and obtained contract area 35 with Royal Dutch Shell, with which it is already associated for the development of area 2 in the zone of the Lost Belt in deep waters of Round 2.4.
Three of the eight blocks in the Southeastern Basins resulted in draws, following payment of the maximums for the government take and investment programs. The draws were resolved by cash bonuses totaling US$ 126 million.
Italy-based Eni SpA, in consortium with Russia’s Lukoil paid a bonus of US$ 59.8 million to win Block 28. Germany’s Deutsche Erdoel AG (DEA), UK-based Premier and Sapura of Malaysia paid a bonus of just above US$ 51 million for Block 30. Pemex, going alone, paid US$ 13 million to win Block 30.
All the bonuses were paid in addition to a government take of 65% in all three cases, completing a day on which the proven areas of the southern Gulf of Mexico’s shallow waters remain a powerful magnet to the modern industry.
Round 3.1 also caught the attention of other international oil companies such as Spain’s Repsol, which won the contract for areas 5 and 12 in Burgos; while UK-based Premier Oil won the fields 11 and 13 in the same basin, while in Tampico-Misantla, the consortium of Capricorn and Citla won the 15. Pan American won the 31st and the consortium of companies Total, BP and Pan American won the field 34.