November 30, 2016 / 4:41 AM / 3 years ago

Mexico aims to award at least 4 blocks in deep water oil auction

MEXICO CITY, Nov 29 (Reuters) - Mexico hopes to award at least four of the 10 deep water oil blocks due to be auctioned next week, plus the farm-out on its Trion field, Energy Minister Pedro Joaquin Coldwell said on Tuesday.

Some of the world’s biggest oil firms, including ExxonMobil and BP, pre-qualified to bid on the initial deep water tenders on Dec. 5, which Joaquin Coldwell termed “the mother of all auctions” in an interview with local radio.

The auction will seek a partner for Mexican state oil company Pemex to develop the Trion field, as well as award the 10 other deep water blocks, including some around Trion just south of Mexico’s maritime border with the United States.

“If we award four blocks plus the farm-out, we’d be very satisfied, hopefully it’ll be more,” Joaquin Coldwell said.

Mexico in 2013-14 ended Pemex’s production and exploration monopoly in a bid to encourage more private investment in the oil and gas industry, though the decline in crude prices has undermined interest in the historic energy reform.

If successful, the blocks could generate up to $4 billion worth of investment each, and as much as $11 billion in the case of Trion, Joaquin Coldwell said, citing Pemex estimates.

There is widespread concern in Mexico that the election of Donald Trump as U.S. president could hurt its economy due to his campaign threats to impose punitive tariffs on Mexican-made goods or tear up a joint trade deal if he cannot renegotiate it.

Still, when asked whether Trump’s arrival in the White House could negatively affect U.S. interest in Mexico’s energy sector, Joaquin Coldwell said he expected cooperation to remain solid.

“In terms of bilateral relations between Mexico and the United States, we expect it to be as good as it’s been with President (Barack) Obama,” the minister said. (Reporting by Dave Graham and Noe Torres; Editing by Sunil Nair)

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