Oil companies competing in the next phase of Mexico’s historic Round One auction will know the minimum level of profits demanded by the government prior to the auction, the sector regulator said on Aug. 26, in a bid to raise investor interest.
The oil regulator, known by its Spanish-language acronym CNH, also said it will offer companies the possibility to conduct additional exploration and extraction beyond reserves that have already been discovered.
The changes are aimed at avoiding a repeat of the first phase of the auction, in which the government missed its own modest expectations, awarding just two of 14 contracts offered.
During that auction, Mexico’s finance ministry only revealed the minimum level of profits companies would have to pay the government after firms presented their bids.
The next round will be awarded on Sept. 30, and involves five production-sharing contracts covering nine shallow water oil fields along the southern edge of the Gulf of Mexico.
The regulator already said in August that it would lower the corporate guarantee—money a consortium has to put up in case of an accident—for the second phase.
Twenty companies have pre-qualified for the late September auction, either as individual operators or in consortia, including international oil majors Chevron and Royal Dutch Shell.
Mexican billionaire Carlos Slim’s Carso Oil and Gas is also among the firms that have pre-qualified to bid, partnering up with Talos Energy and Sierra Oil and Gas, the two winners from last month’s auction.
Mexico's oil regulator is running the five-phase Round One auction, which aims to lure billions of dollars in investment and reverse a decade-long dip in crude output.
The oil auctions are among the first concrete steps following a sweeping energy overhaul finalized last year that ended the decades-long monopoly enjoyed by national oil company Pemex.
Recommended Reading
Marketed: Delta Minerals Non-producing Sale in Colorado
2024-05-02 - Delta Minerals LLC has retained EnergyNet for the sale of non-producing minerals in Bent, Cheyenne and Kiowa counties, Colorado.
NuStar Energy Unitholders Approve Merger with Sunoco
2024-05-02 - The transaction is expected to close on or about May 3, in which NuStar Energy LP will merge with and into a merger subsidiary of Sunoco LP.
FTC OKs Exxon-Pioneer Merger, but Bars Sheffield from Exxon’s Board
2024-05-02 - A megamerger between Exxon Mobil and Pioneer Natural Resources can proceed, but Pioneer Chairman Scott Sheffield is out, the Federal Trade Commission says.
Stice: Diamondback’s Small Company Culture Suits Big M&A Appetite
2024-05-01 - Diamondback Energy CEO Travis Stice tells analysts that the company’s nimble nature is among its top qualities, allowing for rapid growth and the successful integration of Endeavor Energy this year.
Comstock Adds Four Whopper Wildcats; Takes Western Haynesville to 450K
2024-05-01 - Comstock Resources' four newest wells, which IP’ed at more than 35 MMcf/d, were landed at up to 19,400 feet total vertical depth.