(Rewrites throughout after eight of 10 auctions for deep water
oil and gas blocks)
By Adriana Barrera and David Alire Garcia
MEXICO CITY Dec 5 Mexico on Monday auctioned
eight out of ten deep water oil and gas blocks up for grabs in
the Gulf of Mexico, and scored a joint venture for a major crude
field in the most hotly-anticipated round of the country's
energy opening so far.
China's Offshore Oil Corporation took two of the eight
blocks, while Australia's BHP Billiton outbid Britain's BP
in a bid to partner with Mexican state oil firm Pemex in
the promising Trion light oil field in the Gulf of Mexico.
France's Total also made three winning bids, teaming up with
U.S. major ExxonMobil in the Perdido Fold Belt close to the
U.S.-Mexico maritime border for one and with Norway's Statoil
and BP for two blocks in the Salina Basin further south.
U.S. oil major Chevron, Pemex and Japan's Inpex combined to
win a block while Malaysia's Petronas Carigali and private
equity backed start-up Sierra Offshore Exploration also featured
in two winning consortia, one fronted by U.S. independent Murphy
and Britain's Ophir.
"This underlines Mexico is very competitive in the oil and
gas sector," said Energy Minister Pedro Joaquin Coldwell.
Before the current administration ends in two years, Mexico
will likely hold three more oil auctions for shallow and deep
waters, as well as onshore areas, probably including tenders for
so-called non-conventional fields like shale, the minister said.
Over the next decade, the fields auctioned on Monday could
add some 900,000 barrels per day (bpd) to Mexican output, said
Juan Carlos Zepeda, head of the national oil regulator.
All told, fields containing an estimated 8.4 billion barrels
of oil equivalent (boe) were awarded.
Almost 1.2 billion of those were areas rich in most-valuable
light and super light crude secured by China Offshore, a unit of
the Chinese giant CNOOC, in the Perdido Fold Belt, where output
on the U.S. side of the formation has been booming for years.
Joaquin Coldwell extended a "warm welcome" to the Chinese
oil firm, which easily won the two blocks they sought. China
Offshore's entry into Mexico looks set to mark the biggest
investment by a Chinese company in the country.
The Mexican unit of BHP Billiton secured the rights
to tie-up with Pemex in Trion, less than 50 miles (80 km) from
the U.S.-Mexico maritime border.
BHP outbid BP by some $18 million with a $624 million
offer to complement its 4 percent additional royalty bid.
Pemex estimates Trion will require an $11 billion investment
to successfully develop. The competition marks the first time
the ailing Mexican oil giant will join forces with a private
company to drill since losing its monopoly in 2013.
Pemex chief executive Jose Antonio Gonzalez Anaya said the
Trion field would produce 120,000 barrels per day (bpd) by 2025,
though the company has often missed output targets in the past.
The government had said it would be content if four of the
10 blocks went, so the auction was welcome news for Latin
America's No. 2 economy, which has been roiled by fears of
economic turmoil by Donald Trump's election as U.S. president.
The peso currency has slumped amid fears Trump will make
good on threats to tear up a joint trade deal with Mexico or
impose hefty tariffs on Mexican-made goods. It strengthened
slightly during the auctions on Monday.
Trion is nearly 500 square miles (1,285 sq km) in size and
is sandwiched between other blocks in border-straddling Perdido.
New investments in the project are expected to begin next
year, almost entirely from BHP's commitment to spend $1.12
billion, while commercial production is not seen coming online
until 2022 at the earliest.
(Additional repoting by Ana Isabel Martinez and Michael
O'Boyle; editing by Dave Graham and Grant McCool)