In 2013, Mexico opened it’s energy sector doors to foreign competitors hence ending state-controlled Petroleos Mexicanos’s 75 years monopoly in this sector.
The 2016 deepwater auction is in the anticipation on the influx of foreign investment to help reverse 12 years of oil production declines in Mexico.
10 blocks were up for sale, and all expectations were surprisingly fully met as against the Petroleum Minister expectation of selling only 4 out of the 10, this goes a long way to prove that the world’s majors are interested in getting into Mexico.
The blocks in the deepwater auction are estimated to cost $4 billion each to develop, according to the Energy Ministry.
Total won three blocks in the auction, including two in the Salina basin as part of a group with Norway’s Statoil and BP, as well as one in the Perdido basin with Exxon.
CNOOC was awarded two blocks in the Perdido, beating out Pemex for the first block.
Chevron, in a consortia with Pemex and Japan’s Inpex Corp., also won a block in the Perdido.
Sierra Oil & Gas, pledged the highest additional royalty rates in the auction won two blocks in bid groups that included Malaysia’s Petroliam Nasional Bhd. in both and Murphy Oil Corp. and Ophir Energy in one.
BHP Billiton beat out BP for the Trion joint venture with a cash commitment of $624 million compared with BP’s $604 million. The area is estimated to contain the equivalent of 485 MMbbl.