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Mexico signed seven deepwater exploration and production contracts with private oil

Mexico's Sierra Offshore Exploration signed a contract for Block 4, and with consortium inked another for Block 5.

Petroleumworld 03 13 2017

Mexico's National Hydrocarbons Commission (CNH) presided over the signing of seven deepwater exploration and production contracts on Friday, bringing an end to the country's historic Round One series of oil auctions.

The contracts were for blocks located in the Gulf of Mexico: three in the Perdido Fold Belt, a 40,000 sq.-kilometer (15,450 sq.-mile) area located in the northwestern part of the Gulf; and four in the Saline Basin, situated in the southern part of the Gulf.

The blocks were all awarded in early December.

The seven contracts are in addition to one signed last week by Mexican state oil company Petroleos Mexicanos (Pemex), American oil supermajor Chevron Corp. and Japan's Impex that marked the first time Pemex had formed a consortium to compete for a block under a 2013 energy-sector overhaul ending the company's nearly eight-decade monopoly.

Each of the contracts has a 35-year life span, but they can be extended for additional periods of 10 years and then five years.

In the Perdido Fold Belt, a unit of China National Offshore Oil Corporation signed contracts for Block 1 and Block 4, while a consortium made up of the local unit of France's Total and the United States' Exxon Mobil Exploration signed one for Block 2.

In the Saline Basin, a consortium made up of Norway's Statoil, the United Kingdom's BP Exploration and Total's local unit signed contracts for Block 1 and Block 3.

A consortium made up of a unit of Malaysia's Petronas, PC Carigali Mexico Operations; and Mexico's Sierra Offshore Exploration signed a contract for Block 4, while a consortium made up of US energy company Murphy Oil's local unit, the UK's Ophir Energy, PC Carigali and Sierra Offshore inked another for Block 5.

Mexico's energy sector, which has suffered a steady decline in crude output for more than a decade, will receive a major boost from oil production giants as a result of the Round One auctions, Energy Secretary Pedro Joaquin Coldwell said.

The companies that signed the contracts “are fully qualified and have the capital and experience to undertake projects of these dimensions (in which) there is no room for experimentation or error,” Coldwell said.

The seven blocks encompass a total area of 17,000 sq. kilometers and contain prospective hydrocarbon reserves estimated at 2 billion barrels of crude oil equivalent.

Story from Latin American Herald Tribune

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