Mexico onshore tender draws brisk response

OREANDA-NEWS. August 17, 2015. An approaching auction for 25 onshore blocks in Mexico has drawn a flurry of interest at home and abroad, contrasting with a lackluster response to the country's two previous tenders for shallow-water acreage.

The tenders are part of Mexico's historic first bidding round introduced by a sweeping energy reform enacted in August 2014 that opened the industry to private-sector investment.

According to oil regulator CNH, 65 firms have shown interest in participating so far. Of these, 57 have requested access to a geological data room, and the CNH has authorized access for 43 so far.

In a first tender for 14 shallow-water exploration blocks, 41 firms had requested access to the data room. Only two of the blocks were awarded in the final showing last month.

In the second tender for nine shallow-water development blocks divided into five contracts, only 36 companies requested access to the data.

Since then, Mexican authorities have eased contract terms and conditions in an effort to spur more interest.

The third tender is also distinguished by a robust presence of new, smaller Mexican firms. As of 10 August, 37 of the interested parties were local, the CNH said.

Several Mexican independents, such as Sierra Oil & Gas that won the two blocks in the first tender, were created in the wake of the reform. Others such as Alfa are part of larger industrial conglomerates. PetroBal, part of GrupoBal, recruited Carlos Morales Gil, the veteran upstream manager of state-owned Pemex.

Overall, 26 firms have already paid to access the data room for the third tender, including Mexican billionaire Carlos Slim's Carso Oil & Gas, France's Engie and Total, Argentina's Tecpetrol and Canadian Pacific Rubiales with Alfa.

Earlier this week, the CNH pushed back the deadline for participation from 14 August to 28 August, in response to several requests for more time to assemble documentation.

An updated version of the third tender bidding requirements will be published on 7 September, a week later than initially scheduled. The final version will be published on 10 November.

The list of pre-qualified companies will be unveiled on 18 November, instead of 30 October, while the deadline to submit final proposals remains unchanged at 15 December.

In early August, the contract terms and bidding requirements for the second package of shallow-water development blocks were modified to offer bidders more time and flexibility. Blocks will be awarded on 30 September.

A much-awaited tender for deepwater acreage, the final package of blocks in Round One, has been delayed to the end of September from July, while the auction of shale and unconventional areas has been suspended.