Arab Today, arab today foreign firms compete in historic mexico oil auction
Last Updated : GMT 18:56:10
Arab Today, arab today
Arab Today, arab today

Nearly 80 years after investors kicked out

Foreign firms compete in historic Mexico oil auction

Arab Today, arab today

Arab Today, arab today Foreign firms compete in historic Mexico oil auction

The Centenario exploration oil rig, operated by 'Grupo R' company
Mexico City - Arab Today

US, European and Asian energy firms will compete Wednesday in Mexico's first oil auction since a historic reform brought back private investors, nearly 80 years after they were kicked out.

The government is offering 14 blocks in shallow waters of the Gulf of Mexico worth an estimated $17 billion in total, in a contest that includes seven consortiums and 18 individual companies.

Foreign and new Mexican companies have been preparing for months for this moment, the climax of President Enrique Pena Nieto's marquee reform, which was enacted last year following a heated debate in Congress over sharing a source of national pride.

The legislation breaks the monopoly on drilling held by state-run firm Pemex since the industry's 1938 nationalization.

Pena Nieto hopes that the arrival of foreign investment will reverse years of declining production and give a boost to the economy.

US giants ExxonMobil and Chevron, Anglo-Australian firm BHP Billion, India's state-run ONGC Videsh Ltd, Russia's Lukoil, France's Total and Chinese-owned Nexen are among the firms bidding on an individual basis.

While Pemex is in the mix, officials said the Mexican firm will sit out this time and likely bid in another auction in the future.

Some of the consortiums include Italy's ENI, Thailand's Petronas Carigali and other firms, including from Mexico.

- 'First test' -

While 14 locations off the southeastern coast are up for grabs, Energy Minister Pedro Joaquin Coldwell played down expectations that all would be auctioned off.

Coldwell said that, based on international examples, between 30 percent and half of the blocks will have winning bids.

"It seems realistic to me," David Enriquez, an energy expert at Mexico City's Goodrich, Riquelme y Asociados law firm, told AFP. "It's natural that not all fields are awarded in one round."

Of the blocks up for bid, four have drawn medium to high interest, while four others have average demand and the rest are less attractive, he said.

The sharp drop in global oil prices are also playing a part in investor sentiment.

For the auction to be deemed "sufficiently" successful, Mexico would have to award at least the four most attractive blocks, Enriquez said.

"It's important because it will be the first test" of the energy reform and a way for companies to get a feel for Mexico's oil auction system, he said. "It will be like training."

But David Shields, an industry analyst and director of the magazine Energia a Debate, said the government was being "totally pessimistic."

"It would be very strange to me if they didn't award almost all the blocks," Shields said.

"There's always the risk that many of the blocks will be concentrated in the hands of one company. One or two companies could dominate," he said.

Coldwell said bigger oil firms may sit out the first round and save themselves for the bigger, more complicated projects such as deep-water and inland shale gas drilling.

"We think that the first round must be evaluated once everything has been developed," he told reporters last week.

- Televised auction -

Oil auctions are a new thing for Mexico and officials said they wanted to make them transparent.

Wednesday's auction will be shown live on a web and satellite broadcast, said National Hydrocarbon Commission president Juan Carlos Zepeda.

Representatives of each company will place their sealed bids into 14 boxes. A camera will zoom in when envelopes are opened and the winner will be picked on the basis of the highest bid.

"In terms of transparency, we are above international norms," Zepeda said.

The companies will bid without knowing beforehand the minimum percentage that the government will want to earn for each project.

Analysts say the government made an effort to create a transparent system to ease any concerns over the country's poor track record when it comes to corruption.

Last year, Pena Nieto abruptly canceled a contract for a bullet train project that had been awarded to a Chinese-led consortium, angering Beijing.

His decision came days before a news report that his wife had bought a mansion from a Mexican firm that was part of the consortium.
Source: AFP

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today foreign firms compete in historic mexico oil auction Arab Today, arab today foreign firms compete in historic mexico oil auction

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today 17.4 million tourists visit UAE in 2016

GMT 00:47 2017 Monday ,27 February

17.4 million tourists visit UAE in 2016
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Ayat Abaza says state TV presented major stars

GMT 03:52 2017 Sunday ,26 February

Ayat Abaza says state TV presented major stars

GMT 08:51 2017 Saturday ,25 February

Shaking off dieselgate, VW races back into profit

GMT 08:48 2017 Saturday ,25 February

France's Macron takes on critics over 'vague' programme

GMT 10:10 2017 Friday ,24 February

France's Macron gets boost, but election is wide open

GMT 12:38 2017 Thursday ,23 February

Lower fares hit Qantas first half profit

GMT 10:57 2017 Thursday ,23 February

Chief executive out at Paramount Pictures

GMT 07:26 2017 Thursday ,23 February

A peek inside Qatar's 'gas capital of the world'

GMT 11:26 2017 Wednesday ,22 February

Dutch corporate takeover defences tough to breach
View News in Arabic - Business: أخبار الأعمال
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Reading therapy relieves mental disorders

GMT 15:39 2017 Friday ,24 February

Reading therapy relieves mental disorders
Arab Today, arab today UK appoints 1st Scotland Yard chief in 188 years

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Tesla back into red but revenue grows

GMT 07:27 2017 Thursday ,23 February

Tesla back into red but revenue grows
Arab Today, arab today Reasons for the delay 'On the Stairs of Servants'

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'
Arab Today, arab today Ex-yoga missionary unleashes rage

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 07:23 2017 Friday ,24 February

Ola Ghanem hopes to work with M.Ramadan

GMT 12:35 2017 Tuesday ,21 February

63-Year-Old Woman Delivers Baby

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 10:28 2017 Wednesday ,22 February

Milan laughs while Rome cries

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 14:04 2017 Friday ,24 February

Messi visit will contribute in tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday