Mexican round nets two successful bids

Two of 14 shallow-water blocks received successful bids on July 15 in Mexico’s historic Round One offering of exploration and production rights (OGJ Online, Dec. 19, 2014).

A joint venture of Talos Energy LLC, Houston; Sierra Oil & Gas, Mexico City; and Premier Oil PLC, London, submitted both bids.

Before bidding opened, Juan Carlos Zepeda, president of Mexico’s National Hydrocarbons Commission, had indicated the round would be considered successful if it led to the award of four to seven contracts.

The round was the first to make participation in Mexican oil and gas exploration and production available to non-Mexican companies. Terms are based on production-sharing.

Five individual companies and four groups submitted bids for six of the blocks on offer. Four bids fell below minimum terms set by the government.

Large companies registered for the auction were Statoil ASA, Murphy Oil Corp., Eni SPA, and Oil & Natural Gas Corp.

Twenty-five of 49 companies purchasing data-room access had prequalified to bid.

The successful bids were for Block 2, off Veracruz, and Block 7, off Tabasco (see map, OGJ, Mar. 2, 2015, p. 30). Both have minimum drilling requirements of two wells.

In a statement, Premier said drilling locations might be identified “towards the end of 2016.” It said both blocks contain Tertiary clastic plays typical of the Salinas subbasin of the Sureste basin.

Talos Energy is operator of the joint venture. It and Sierra Oil & Gas hold 45% interests each. Premier holds 10% with an option to participate in the drilling program at an equity interest of up to 25%.

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