Mexico starts upstream tender countdown

The Mexican government is preparing to offer the first of five staggered packages of acreage in its ground-breaking upstream tender, a cornerstone of the country´s sweeping energy reform.

An invitation for the first package of shallow water blocks will be issued in early November, to be followed by the opening of a physical and virtual data room in January 2015, and bidding in May.

Subsequent packages, to be released monthly, will cover extra-heavy, Chicontepec and unconventional, onshore and deepwater blocks located in the Perdido Fold Belt near the border with the US and southern areas of the Gulf of Mexico.

Awards for deepwater blocks, the most coveted acreage for big oil companies looking for a step change in their reserves, will be issued in September 2015.

Several senior executives attending an oil conference in Cancun expressed surprise with the lightning pace of Mexico´s upstream opening, but acknowledge that the government probably had little choice politically except to expeditiously push through the reform before mid-term elections in June 2015.

Mexico plans to offer a variety of contracts, including production and profit-sharing and license agreements.

State-owned Pemex, which the reform wrested of its longheld upstream monopoly, will compete with other bidders, likely in new partnerships that leverage its traditional shallow water expertise.

YPF chief executive Miguel Galuccio told Argus this morning that a new cooperation deal with Pemex and Malaysian counterpart Petronas will likely lead to a joint bid for shallow water acreage.

Mexico´s political stability, proximity to the US and enormous geological potential are fueling a “gold rush” for oil companies, as one top executive described it

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