As oil prices rise, global majors eye Mexico's deep waters

By Adam Williams on 11/10/2017

MEXICO CITY (Bloomberg) -- As the price of oil rises, an international rush is on for Mexico’s untapped deepwater riches.

The who’s who of the oil world -- led by ExxonMobil Corp. and Royal Dutch Shell Plc, the world’s two biggest drillers by market value -- are lining up to bid in the country’s Jan. 31 deepwater auction. And the interest is international in scope, drawing Chevron Corp. from the U.S., the UK’s BP Plc, Norway’s Statoil ASA, France’s Total SA, Australia’s BHP Billiton Ltd, Russia’s Lukoil PJSC and China’s Cnooc Ltd, among others.

The total: 25 registered to bid for 29 deepwater plots across the southern Gulf of Mexico, the nation’s regulator said Thursday. It shouldn’t be a surprise. The areas up for grabs are estimated to hold as much as 4.2 Bbbl of crude oil in untapped deep waters where 76% of Mexico’s prospective resources may lie, the energy ministry has said.

In the country’s first-ever deep water oil auction last year, eight of the 10 blocks auctioned were won by international crude majors. The stakes are higher for the Jan. 31 bid round, which aims to auction almost three times the amount of fields as last year.

At the same time, it arrives on the heels of two recent 1 Bbbl-plus discoveries in Mexico shallow waters this summer, and as the price of oil has risen. Brent crude, the global benchmark, has jumped from $44.43/bbl in November 2016, to close at $63.93 on Thursday, a 44% rise.

Friday is the last day for companies to qualify to participate in the auction. Then the countdown will begin.


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