Oil giant Shell wins 9 blocks in Mexican deep water bidding

Royal Dutch Shell RDSa.L snapped up nine of 19 oil and gas blocks awarded in Mexico's prized Gulf of Mexico deep waters, emerging the clear victor in the country's biggest auction since the energy sector was opened up to foreign oil firms.

Mexico has two more oil and gas auctions lined up for this year-one in June and one towards the end of the year-but the chances of all blocks finding suitors are mixed in light of the abovementioned political worries after Obrador said he will review and very likely revise the contracts that Pena-Nieto's government signs with foreign oil companies.

Shell focussed on blocks in the Perdido and Salina basins, which were expected to be the most competitive of the 29 areas on offer in the auction.

The Whale is operated by Shell and co-owned by US oil giant Chevron Corp.

Total says its Ballymore prospect is located deep offshore in the U.S. Gulf of Mexico (Eastern GoM) and that the well was drilled to a final depth of 8,898 meters and encountered 205 meters of net oil pay in a high quality Norphlet reservoir. "We are a big player in deep water worldwide", said Alberto de la Fuente, president of Shell Mexico. The price of oil rose 22% in the past year. (40%). It was discovered in the Alaminos Canyon Block 772, adjacent to the Shell-operated Silvertip field and approximately 10-miles from the Shell-operated Perdido platform.

Saad Sherida Al Kaabi, President and CEO of Qatar Petroleum welcomed the announcement of the winning bids, which he said was a clear example of the important role Qatar Petroleum plays in the global oil and gas industry.

Firms that won in the previous auctions have pledged investments of $61 billion.

The fields on the auctioning block are estimated to contain some 4.2 billion barrels of oil equivalent.

Around 30 companies from 16 countries will participate today in the largest auction of oil blocks made since the implementation of the energy reform in Mexico.

  • Wendy Palmer