Mexico opens data room for shallow water blocks

OREANDA-NEWS. Mexico's government is opening a long-awaited data room today for the first package of oil blocks in its inaugural upstream licensing round.

The data will be available to participants that have applied for access.

The first 14 blocks, all in the shallow waters of the southern Gulf of Mexico, will be the first leased to any company other than state-owned Pemex since it was created through the expropriation of foreign oil company assets in 1938.

The data room will be open until the mid-July awards.

The government began accepting requests for access on 11 December 2014, and will continue to process requests until 16 March.

The 14 blocks are in Mexico's southeastern marine region, which hosts the nation's most productive complex Ku Maloob Zaap.

Oil regulator CNH, which is managing the tender, estimated a break-even price of around \$20/bl and an average \$1bn in investment over the 25-year life of the contract for the shallow-water blocks.

Mexico's crude export basket mix is trading at around \$38/bl, down by more than 60pc from its 2014 peak and close to a 10-year low.

Mexico is likely to secure bids in spite of the sharp price decline. Comparable fields run by Pemex have lifting costs as low as \$4.88/bl and the region has well-developed infrastructure. But detailed data will be key for individual bids from participants. Numerous foreign companies signed cooperation agreements with Pemex last year on the assumption that the state-owned company has a built-in advantage in terms of geological knowledge.