Mexico Delays Next Oil Auction to Let Huge New Find Sink In
(Bloomberg) -- Mexico will delay its next offshore oilfield auctions by a month, giving international bidders more time to evaluate recent major crude discoveries that highlight the potential value of the assets.
A new billion-barrel find announced last week "confirms that the Mexican side of the Gulf of Mexico is very prolific," said Juan Carlos Zepeda, Mexico’s chief oil regulator in an interview Friday. "International and national interest is awakening."
July 12 marked perhaps the single most successful day for the Mexico oil industry since the government ended Petroleos Mexicanos’s government-owned production monopoly in 2014. Premier Oil Plc, Sierra Oil & Gas and Talos Energy LLC reported a reservoir with an estimated 1.4 billion to 2 billion barrels of oil in the southern Gulf of Mexico.
On the same day, Italian producer Eni Spa said its March find in Mexico’s offshore waters also contains the equivalent of as much as 1 billion barrels, and Mexico successfully auctioned 21 of 24 onshore fields to private companies.
"There was already interest to come, explore and work in the Gulf of Mexico before these finds, but now to have discoveries in such a short time, interest of international entrants to have activity in Mexico has renewed," Zepeda, head of the National Hydrocarbons Commission that oversees the industry, said in an interview in Bloomberg’s Mexico City office.
Development Accelerating
The Talos-led discovery is expected to produce crude in three to four years, Zepeda said. Eni, which won rights to develop three more shallow water areas in the Gulf of Mexico last month, will accelerate development plans as it expects production by as soon as 2019, he said.
Mexico wants to give potential international entrants plenty of time to digest all the new data before they bid for new leases in the region. The country’s next deep water auction will be held in January 2018 instead of December as originally planned, Zepeda said. Mexico will announce the fields and acreage amounts for its next deep water auction "in a few days," he said in the interview.
The Mexican government will keep as much as 90 percent of the profits earned by the Eni project and around 83 of those generated from the Talos consortium, according to a July 16 emailed statement from the Energy Ministry.
In Mexico’s first deep water auction, held in December 2016, the oil industry’s largest companies - Exxon Mobil Corp., Chevron Corp. and BP Plc - were among those that won rights to explore for crude in the southern Gulf of Mexico.
To contact the reporter on this story: Adam Williams in Mexico City at awilliams111@bloomberg.net.
To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net, Susan Warren
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Gunvor CEO Sees Russian Refining Capacity Taking Hit from Drone Strikes
- Sinopec Engineering Posts Higher Annual Petrochemicals Revenue
- Subsea7 Secures Contract to Service Woodside's Trion
- These Factors Helped Brent Oil Price Break Above $85
- Imperial Pipeline in Winnipeg Goes Offline for Three Months
- Adnoc Inks Supply Deal for Ruwais LNG Project with Germany's SEFE
- Gaz System to Acquire Gas Storage Poland
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension