Italian oil major Eni is the day’s big winner of Mexico’s latest oil tender round that awarded 10 out of 15 shallow-water blocks in the Gulf of Mexico, in the latest opening since a landmark reform in 2013 paved the way for private investment in the sector.
In March, Eni announced a “significant” oil discovery at a block it won in a tender in 2015. On Monday, the company won one block in its own right after beating out four other bidders. It also scored two other blocks, one in a consortium with Capricorn, a unit of UK oil group Cairn Energy, and Mexican company Citla, and the other in consortium just with Citla.
Pemex, Mexico’s state oil company that lost its monopoly in the reform, won two blocks – one in consortium with DEA Deutsche Erdoel of Germany and one with Ecopetrol of Colombia. Pemex has a strong track record in shallow-water exploration and development.
Ecopetrol also won another block, in partnership with PC Carigali of Malaysia.
Lukoil of Russia won one block, as did a consortium made up of France’s Total and Anglo-Dutch major Shell. Spain’s Repsol, in partnership with a unit of Mexico’s Sierra Oil & Gas, clinched another.
The most dramatic moment of the auction came when a consortium made up of Capricorn and Citla beat Eni on a tiebreaker. Both groups had offered identical bids, but the UK-Mexican consortium clinched the ninth block after offering a higher payment to the government in the event of a tied offer.
Among the unlucky bidders was China’s CNOOC, which clinched two of Mexico’s deep-water blocks in a tender last December. The deep-water round is considered the jewel of the auction process so far.
“We estimate that the total investment throughout the life of these contracts could reach $8.2bn,” the energy ministry said in a statement. Juan Carlos Zepeda, head of the National Hydrocarbons Commission, the regulator that ran the tender, called it a great result.
The state will receive an average of 77.4 per cent of the profits of the projects and under extraordinary circumstances, as much as 83.9 per cent, it added.