Pemex Successful in Ronda 3 Bids in Gulf of Mexico
If anyone thought the end of Pemex’s monopoly in Mexico meant the company wouldn’t be involved in bidding for blocks being made available to the private sector, they need to cast aside that notion after bidding March 27 for blocks in the shallow waters of the Gulf of Mexico.
Pemex was part of a consortium that included Spain’s Compania Espanola and Germany’s Deutsche Erdoel that won the bidding for three blocks in the highly prospective Tampico-Misantla region, off the coast of Veracruz. Later, in partnership with France's Total, it successfully bid on two blocks in the Cuencas del Sureste area, on a third with partner Royal Dutch Shell and on its own with a $13mn cash bid for a fourth.
Overall, the auction attracted successful bids for 16 of the 35 blocks offered, with initial investment commitments totaling $442mn and cash offers totaling $124mn. Additional investment of some $8.6bn could be needed to develop the areas, National Hydrocarbon Commission (CNH) president Juan Carlos Zepeda Molina told reporters after the auction. Production from the awarded blocks could eventually reach 220mn ft3/day of natural gas and 280,000 b/day of oil, while creating as many as 86,000 jobs.
Pedro Coldwell, Mexico's Secretary of Energy, described the auction as successful, not only because it attracted the attention of some of the biggest oil and gas companies in the world, but also because it advances a national goal of boosting domestic natural gas production, which has waned considerably in recent years.
The Tampico-Misantla and Burgos basins are primarily gas prone, he said, adding that successful development in those two basins will address Mexico's priority "to decrease imports of natural gas and to supply the (domestic) petrochemical industry."
The Tampico-Misantla blocks, areas 16, 17 and 18, are contiguous and Pemex, which has historically been a very successful shallow water producer (its Cantarell field, at its peak, produced some 2.1mn b/day) likely knows the area very well.
The offshore Tampico-Misantla is thought to hold millions of barrels of light oil reserves and potentially significant natural gas reserves as well.
Another block in the basin, area 15, was awarded to partners Capricorn Energy and Houston-based Citla Energy, both of which have won blocks in previous rounds. Nine blocks did not attract bids.
Several blocks in the 8,424 km2 Burgos Basin, which borders Texas and is thought to hold significant gas reserves, were also offered in the March 27 Ronda 3. Two each went to Spanish energy giant Repsol and UK-based Premier Oil.
Finally, in addition to the Pemex wins in Cuencas del Sureste, additional blocks there were awarded to Eni, partnered with Russia's Lukoil; the consortium of Deutsche Erdoel, Malaysia's Sapura Energy and Britain's Premier Oil; Argentina's Pan American Energy; and a consortium of Total, Pan American and BP.
There is a history of recent exploration success in the shallow waters of the Gulf of Mexico.
A consortium that includes Mexican-based Sierra Oil and Gas, Houston-based Talos Energy and British-owned Premier Oil announced a shallow Gulf of Mexico discovery last July that has the potential to produce as much as 2bn barrels. The Zama 1 well is a light crude find.
And a year ago, Italy’s Eni announced a major light oil find in the shallow Gulf of Mexico, close to existing Pemex infrastructure. In July, after completing a third Amoca well in Campeche Bay, the company said the reservoir could hold 1bn barrels of oil.