The Mexican government is expected to offer the rights to partner with state oil company PEMEX on three major projects on Wednesday, one in the shallow-water Gulf of Mexico and two more onshore, according to a Reuters report.
The three joint ventures, or farm-outs, aim to help PEMEX develop areas with private capital and expertise. In each case, PEMEX would retain a 50% stake in the project but will cede operational control.
The auction run by Mexico’s National Hydrocarbons Commission will be only the second time that partnership rights for a PEMEX project have been made available.
The first joint venture auctioned last December was won by BHP Billiton, which took a 60% operating interest in PEMEX’s deepwater Trion project, a development seen requiring some $11 billion over the life of the contract.
Ten bidders have pre-qualified for the auction, according to the report. Six are aiming to operate as PEMEX’s sole partner, including China Offshore Oil Corp., Colombia’s Ecopetrol and Germany’s DEA Deutsche Erdoel. Four others have pre-qualified in consortia, including a venture between Murphy Oil and Mexican independent Sierra Oil & Gas.
The projects on offer include a production-sharing contract for the shallow water Ayin-Batsil area, and license contracts for the onshore blocks, Ogarrio and Cardenas-Mora.
Ayin-Batsil is a 423-sq mi (1,096 sq km) mostly heavy oil field along the southern edge of the Gulf of Mexico, believed to contain 359 Mmboe in proven, probable and possible reserves.
The Ayin-Batsil farm-out will be awarded based on which bidder offers the government the largest share of operating profits, with a minimum set at 18.2% and a maximum of 25%.