Cuencas del Sureste saves Mexico's lackluster Round 3.1

Tuesday, March 27, 2018

Mexico's shallow water Round 3.1 got off to a slow start when only eight of the first 27 areas in the Burgos and Tampico-Misantla-Veracruz basins received bids, but the round roared to life when the seven areas in the Cuencas del Sureste basin, the location of the significant Zama discovery, were offered.

Cuencas del Sureste was contested by heavy hitters such as Total, Eni, Shell, BP, Pemex E&P and Lukoil. When the dust cleared, state oil company Pemex had acquired four of the seven blocks; one on its own, one in consortium with Shell and two in consortium with Total.

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Energy minister Pedro Joaquin Coldwell noted that the eight awarded areas in Tampico-Misantla-Veracruz and the Burgos Marine basins were much less explored than the ones in Cuencas del Sureste, and that the winning bids are important to facilitate further exploration in these areas.

Big winners in Round 3.1 were Pemex with seven areas, as well as Premier Oil, Cepsa, Deutsche Erdoel and Total, each with three areas. The only new entrant to win a block was Malaysian Sapura Energy, as established players that sought to consolidate their positions dominated this round. It is the final round before general elections in Mexico are held in July.

Coldwell noted that the bids represented an investment of US$8.6bn and would generate 86,377 new jobs.

Eni and Lukoil won Area 28. Deutsche Erdoel Mexico, Premier Oil Exploration and Production and Sapura won Area 30. Pan American Energy took Area 31, while it will work Area 35 in consortium with Total E&P and BP Exploration.

In the Burgos Marine basin, four of 14 blocks were granted contracts. Two went to Spanish IOC Repsol and two to London-based Premier Oil, bringing the total these two companies hold on Mexico's side of the Gulf to six and four blocks, respectively.

In the Tampico-Misantla-Veracruz basin only four of 13 blocks were auctioned. Pemex brought the number of blocks it won in that round to seven with the acquisition of three areas – two in consortium with Cepsa and Deutsche Erdoel and one in consortium only with Cepsa.