Oil Majors Show Early Interest in Mexico Bidding Round – NASDAQ.com

Major international oil firms including Exxon Mobil Corp. and Royal Dutch Shell PLC are showing interest in the initial phase of a bidding round for exploratory oil and gas blocks in the shallow waters of the Gulf of Mexico that will be assigned by the government midyear, a top energy official said Monday.

The recent plunge in oil prices appears to not to have affected the shallow-water phase of the bidding round because of modest production costs, while a later phase involving more costly production in shale-rock formations will be trimmed back to offer only the most attractive of the so-called unconventional resources, said Juan Carlos Zepeda, head of the National Hydrocarbons Commission.

The commission is overseeing what Mexico is calling “round one,” since it is the first of its kind since an energy overhaul last year that ended the 76-year government monopoly on oil exploration and production by national firm Petroleos Mexicanos, or Pemex.

“Even in this price environment, the round is moving forward quite well,” Mr. Zepeda told journalists during a tour of “data rooms” where oil companies can see seismic and other data on the areas prior to bidding.

Among the seven companies that have been authorized into the data rooms–after paying fees–are Exxon Mobil, Chevron Corp., Shell, Ecopetrol SA and BG Group PLC, the commission said in a press release. A total of 30 companies have shown some interest in the process short of paying for entry into the data rooms, the commission said.

Mr. Zepeda said the shallow-water round is in an area of the Gulf of Mexico where there is already significant oil production and where costs are less than $20 a barrel, making them attractive even in the current environment of depressed prices.

via Oil Majors Show Early Interest in Mexico Bidding Round – NASDAQ.com.

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