By Laurence Iliff
MEXICO CITY--Major international oil firms including Exxon Mobil
Corp. and Royal Dutch Shell PLC are showing interest in the initial
phase of a bidding round for exploratory oil and gas blocks in the
shallow waters of the Gulf of Mexico that will be assigned by the
government midyear, a top energy official said Monday.
The recent plunge in oil prices appears to not to have affected
the shallow-water phase of the bidding round because of modest
production costs, while a later phase involving more costly
production in shale-rock formations will be trimmed back to offer
only the most attractive of the so-called unconventional resources,
said Juan Carlos Zepeda, head of the National Hydrocarbons
Commission.
The commission is overseeing what Mexico is calling "round one,"
since it is the first of its kind since an energy overhaul last
year that ended the 76-year government monopoly on oil exploration
and production by national firm Petroleos Mexicanos, or Pemex.
"Even in this price environment, the round is moving forward
quite well," Mr. Zepeda told journalists during a tour of "data
rooms" where oil companies can see seismic and other data on the
areas prior to bidding.
Among the seven companies that have been authorized into the
data rooms--after paying fees--are Exxon Mobil, Chevron Corp.,
Shell, Ecopetrol SA and BG Group PLC, the commission said in a
press release. A total of 30 companies have shown some interest in
the process short of paying for entry into the data rooms, the
commission said.
Mr. Zepeda said the shallow-water round is in an area of the
Gulf of Mexico where there is already significant oil production
and where costs are less than $20 a barrel, making them attractive
even in the current environment of depressed prices.
A later phase of the bidding round this year involving
shale-rock formations and so-called tight oil that is complicated
and expensive to extract will be trimmed back to including only the
most attractive areas due falling oil prices, Mr. Zepeda said. The
commission, along with the Energy Ministry, will decide by March or
April which areas will be trimmed, he added.
The highly anticipated bidding phase near the end of the year
for blocks in the mostly unexplored deep waters of the Gulf of
Mexico will go forward as planned since oil and gas there won't be
produced for at least eight years and prices will likely have
recovered, Mr. Zepeda said.
The Mexican legislature passed the final details of the energy
overhaul last year after 10 straight years of declining oil
production by Pemex. Supporters of the move argued that Mexico was
running out of the "easy oil" that Pemex was best at producing and
needed private expertise and money to tackle more complicated
fields. Opponents said it was a sellout to multinational companies
that eventually would gut Pemex.
Write to Laurence Iliff at laurence.iliff@wsj.com
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