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Mexico Signs Deepwater Exploration, Production Contracts

First Posted: Mar 15, 2017 02:53 AM EDT
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Mexico's famous Round One series of oil auctions has ended after the government presided by the National Hydrocarbons Commission (CNH) signed a seven deepwater exploration and production contracts on Friday.

According to Petroleum World, the contracts in Mexico deepwater exploration includes three in the Perdido Fold Belt, 40,000 square kilometer area that is located in the northwestern part of the Gulf, and four in the Salin Basin that is located in the south of the Gulf of Mexico.

The three blocks were awarded in Mexico last December. The seven contracts were added together with the other contract signed by the Mexican State Oil Company Petroleos Mexicanos (Pemex), Japan's Impex, and American Oil Supermajor Chevron Corp. It marked the first time that PEMEX Company formed a consortium that would compete for a block under the 2013 energy-sector overhaul.

Each of the contracts mentioned above signed by Mexico has a 35-year life span. However, they can also be extended to have additional periods of five to ten years. In the Perdido Fold Belt, China National Offshore Oil Corporation signed contracts for the Block 1 and Block 4.

According to Offshore, the signing ceremony of the contracts in Mexico City was attended by Chevron Africa, Clay Neff, and the Latin America incoming president, Jose Antonio Gonzalez Anaya, Managing Executive Officer of INPEX, and PEMEX CEO, Shuhei Miyamoto. The Mexico energy sector that suffered the steady decline in crude output for almost a decade is expected to receive a boost from oil production giants as a result of the Round One Auctions. 

Mexico's consortium which is made up of the local unit of France's Total, as well as the United States Exxon Mobil Exploration, signed a contract for Block 2. In the Salin Basin, on the other hand, a consortium which is made up of Norway's Statoil, the United Kingdom's BP Exploration and the Total's local unit signed the contracts for Block 1 and Block 3.

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