US-based oil giants Exxon Mobil Corp, Chevron Corp and Hess Corp will form a group to bid in Mexico’s deepwater round next December 5, according to a direct source cited by Bloomberg. The three companies will seek to win drilling rights for one of the 10 offshore blocks to be auctioned in R1-L04, the fourth and last licensing phase of Round 1.
The trio of IOCs have reached a Joint Operating Agreement, a contractual framework which will underpin any subsequent joint ventures between them. The agreement allows the participants to bid as one entity in the highly anticipated offshore round.
Seemingly following suit are Murphy Oil Corp, Malaysia’s Petronas and Sierra Oil and Gas, who are also said to be in talks to compete together for an offshore block in December, Bloomberg reported.
These developments confirm predictions that partnerships between large companies will typify the deepwater licensing process, and give a glimpse into the future of Mexico’s evolving energy market. The remaining 19 companies qualified to bid in R1-L04 are expected to establish similar consortiums due to the sizeable capital prerequisites needed.
Such interest from industry leaders highlights the appeal that Mexico’s largely unexploited offshore reserves pose to potential investors. The appeal is evident when considering the ample reserves speculated to reside in the 10 blocks up for grabs.
The blocks are distributed across the Perdido area and in Cuenca Salina, vary between 1500m and 3000m of depth and will be productive for up to 50 years.
The companies participating in the two speculated bidding groups have yet to comment publicly on the matter.
Writing by Lucy Raitano, Mexico Oil & Gas Review Industry Analyst and Journalist