Mexico reveals more deepwater auction details

Mexico's energy ministry (Sener) has revealed more details of the fourth auction of Round One, scheduled for the third quarter, and which will include ultra deepwater fields.

Ten contractual deepwater areas will be offered in the auction, six exploratory blocks in the Salina basin in the southern Gulf of Mexico, and four exploratory blocks in the Perdido belt, in the northern Gulf off the coast of Tamaulipas.

Sener has released maps and other data on the areas on offer.

As with the previous three auctions, the finance ministry (SHCP) will set the minimum revenue requirements for the Mexican state from the oil and gas E&P contracts awarded in the auction, based on gross revenues and excluding cost recovery, Sener said.

Contracts will also make allowances for additional royalty payments and investment commitments based on the costs of drilling during the initial phase of the contract.

Companies can bid for contracts individually or as consortiums and must demonstrate the financial and technical capacity to operate in deep water, Sener said.

Technical requirements of operators include experience in E&P operations in at least one project at a depth of at least 1,000m, and equity of US$2bn or more and assets of at least US$10bn. Non-operators within a consortium must have equity of at least US$250mn.

The bidding rules also contain information regarding breach of contract.

The deepwater auction will be the most important phase of Round One, according to a report by UK-based consultancy firm Wood Mackenzie released earlier this week.

"The long-awaited deepwater phase of Round One will be one of the biggest upstream stories of 2016. The acreage on offer is frontier, but the resource potential will attract large companies, particularly majors and Asian NOCs," the report said.

Chevron, Shell and Total are currently in the prequalification process, according to the national hydrocarbons commission (CNH).

The latest guidelines can be viewed in English here.

In a related note, TGS announced it acquired 93,000km of the 186,000km Gigante 2D seismic project offshore Mexico.

"Interpretation of preliminary data has identified a number of prospective play fairways within a variety of structural provinces," the company said in a statement.

"Delivery of fast track products is ongoing with over 57,000 kilometers presently available including areas covering the proposed bid rounds in the Campeche, Perdido and Mexican Ridges regions," added TGS.