The Mexican hydrocarbon regulator, National Hydrocarbons Commission (CNH), has approved contracts and auction terms for 15 shallow water blocks in the southern Gulf of Mexico, launching the first phase of the Round Two tender ("2.1 round"). Winners will be announced on 22 March 2017.
The 15 shallow water blocks, located off the coasts of Vera Cruz, Tabasco and Campeche, hold nearly 650 mboe of crude oil in proven reserves. Bidders must be able to document technical capability from at least three exploration and production (E&P) projects led between 2011 and 2015 (experience as an operator of financial partner in shallow or deep water) or total investments of at least US$1bn in similar projects (minimum capital requirement of US$1bn or assets worth at least US$10bn). The CNH will select the bidders offering the largest government take.
Mexico expects to attract an average investment of US$750m per block, i.e. a total investment of US$11.25bn over the life of the 30-year production sharing contracts (PSCs). The country, which launched its energy market reform in late 2013 to open the development of hydrocarbon resources to private companies, is seeking to attract interest from US drillers. The three Round One auctions failed to meet a large success, with several shallow water fields receiving no bids.
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