Mexico's National Hydrocarbons Commission reported the award of 19 blocks of the 29 on offer in the Perdido, Campeche, and Mexican Ridges areas in the Mexican Gulf of Mexico. Round 2, Phase 4 (Round 2.4) was held Jan. 31 in Mexico City.
Round 2.4-which was dominated by Shell Exploracion y Extraccion de Mexico SA de CV picking up nine key blocks either alone or with partners-was called by one analyst a "significant success."
Maria Cortez, Latin America upstream research manager for Wood Mackenzie, noted, "Bidding was competitive, with Shell the most aggressive bidder, taking nearly half of all blocks awarded. In the Perdido area, the company won five of six awarded blocks."
Shell won four exploration blocks on its own, one with its partner Pemex Exploracion y Produccion, and four with its partner Qatar Petroleum International Ltd. (QP). Shell will be the operator of all nine blocks, which cover a total area of 18,996 sq km.
"We commend Mexico on a historical, successful bid round; for Shell, today's win marks a competitive, deepwater entry in Mexico," said Andy Brown, Shell upstream director. "The proximity and technical similarity of this opportunity to our leading position in the US Gulf of Mexico will allow us to benefit from and build upon decades of experience, complementing our position in the region."
QP won exploration rights for Blocks 3, 4, 6, and 7 in the Perdido basin as part of a consortium comprising Shell, operator with 60% interest, and QP, with 40% interest.
QP also won the exploration rights for Block 24 in the Campeche basin as part of a consortium comprising Eni SPA, operator with 65% interest, and QP, with 35% interest.
Saad Sherida Al-Kaabi, QP president and chief executive officer, said, "Winning these offshore exploration blocks in Mexico, which contain some of the most promising hydrocarbon prospects in the world, is an important achievement for [QP]. It represents another step in implementing our strategy to expand our international footprint, and to pursue Latin America as an important core area for [QP]."
Round 2.4 comes at the same time as several other deepwater rounds worldwide. As WoodMac expected, acreage in the Perdido and Salinas Sureste areas proved to be the most sought after in this latest round.
Cortez said, "The majors used this round to increase acreage exposure to some of the most attractive deepwater areas in the world."
The analyst said the round validated the Mexican government's approach to setting competitive fiscal terms, which promoted active bidding, driving up the value of acreage. Mexico raised more than $500 million in cash payments.
"Mexico has not only opened its doors to foreign direct investment but has also made a point of listening to industry and learning from each round. One measure of success is the number and quality of companies now active in Mexico's offshore. The corporate landscape is very diverse," Cortez said.
