Mexico’s Energy Industry: Mexico Tender Round 2.1: Shallow Water Oil Sells Big
On June 19, 2017, the Comisión Nacional de Hidrocarburos (CNH) completed the Presentation and Opening of Bid Proposals for the First Tender of the Ronda Dos (“Round 2.1”), which was first announced on July 20, 2016. Round 2.1 attracted 36 bidders: 20 individual companies and 16 consortia, including Petroleos Mexicanos, DEA Deutsche Erdoel, Talos Energy, Noble Energy, Chevron, Shell, Total and ConocoPhillips.
Round 2.1 included 15 contract areas with an estimated four billion BOE of dry gas, wet gas, light oil, heavy oil and extra heavy oil located in the shallow waters of Veracruz, Tabasco and Campeche.
Despite “lower for longer” oil prices, the auction was quite competitive compared to previous shallow water tenders in Mexico. For instance, only nine bidders competed in Rounds 1.1 and 1.2, and only five contract areas were awarded. In contrast, Round 2.1 had 36 bidders and awarded 10 contract areas. Many blocks received multiple bids and one block had to be decided by the tiebreaker bonus. The aggressive nature of Round 2.1 compared to the prior rounds is indicative of the strong potential that the international energy industry sees in Mexico.
CNH evaluated the bids based on proposed state participation and investment factor. The results of the bidding process are shown in the attached chart.
