As Oil Prices Rise, Global Majors Eye Mexico’s Deep Waters

Photo: By Matt Gertson / Shutterstock

By Adam Williams (Bloomberg) — As the price of oil rises, an international rush is on for Mexico’s untapped deep-water riches.

The who’s who of the oil world — led by Exxon Mobil Corp and Royal Dutch Shell Plc, the world’s two biggest drillers by market value — are lining up to bid in the country’s Jan. 31 deep-water auction. And the interest is international in scope, drawing Chevron Corp. from the U.S., the U.K.’s BP Plc, Norway’s Statoil ASA, France’s Total SA, Australia’s BHP Billiton Ltd, Russia’s Lukoil PJSC and China’s Cnooc Ltd, among others.

The total: 25 registered to bid for 29 deep-water plots across the southern Gulf of Mexico, the nation’s regulator said Thursday. It shouldn’t be a surprise. The areas up for grabs are estimated to hold as much as 4.2 billion barrels of crude oil in untapped deep waters where 76 percent of Mexico’s prospective resources may lie, the energy ministry has said.

In the country’s first-ever deep water oil auction last year, eight of the 10 blocks auctioned were won by international crude majors. The stakes are higher for the Jan. 31 bid round, which aims to auction almost 3 times the amount of fields as last year.

At the same time, it arrives on the heels of two recent 1 billion barrel-plus discoveries in Mexico shallow waters this summer, and as the price of oil has risen. Brent crude, the global benchmark, has jumped from $44.43 a barrel in November 2016, to close at $63.93 on Thursday, a 44 percent rise.

Friday is the last day for companies to qualify to participate in the auction. Then the countdown will begin.

© 2017 Bloomberg L.P

Unlock Exclusive Insights Today!

Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.

Sign Up