Mexico has opened bidding for oil exploration rights in 14 areas of the Gulf of Mexico to domestic and international companies after upstream oil regulator, Comision Nacional de Hidrobarburos (CNH), this week approved rules for the first part of Bid Round 1, focusing on shallow-water exploratory blocks.
According to CNH, data room access will be available to those that pre-qualify for shallow water assets in January with the successful bidders being granted up to five years to develop an exploration plan.
Bidding, which had been due to be launched in November, will continue until July 15, said AP. The previously set deadline for bidding on the first tranche of Round 1 had been set for May 2015. Requirements include showing participation in at least three exploration projects and oil extraction of at least US$ billion and capital on hand of at least the same amount.
Setting these guidelines is the latest step in Mexico’s move to allow foreign companies to own and produce oil, ending a 76-year-old state monopoly. Prior to this year's reforms, state company PEMEX was the only company allowed to do oil exploration and production in Mexico.
Mexico's first round is being staggered, with bidding for the shallow water areas first, followed by, in order, extra-heavy oil, Chicontepec and unconventional, onshore, and deepwater, over a period between now and March-October (bid open and close for deepwater) next year, however, timelines have already slipped. The first parcels up for bid are in shallow water, less than 500m (1650ft), off the coasts of Veracruz, Tabasco, and Campeche states, covering about 2600sq mi. It has been suggested that the shallow water acreage has been chosen to reflect the current low oil prices.
Juan Carlos Zepeda, president of CNH said experts believe the parcels contain a total of 687 million barrels of oil, reported AP.
In addition to the Bid Round 1 blocks being made available, there are also existing fields operated by Pemex, the state-owned national oil company, which are also available via farm out.
The latter are a key area of focus for AIM-listed outfit MX Oil. Its CEO Stefan Olivier said: "We are excited to see the tender process is now fully underway with CNH this week releasing the first segment of the blocks being released in Bid Round 1, namely shallow offshore and we look forward to the release of pre-qualification criteria in Q1 2015."
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