The first oil auction in Mexico, believed to mark the historic opening of the sector to private and foreign capital have turned into a fiasco Wednesday with the defection of several major foreign groups and assigning only two of the 14 proposed sites.
Only nine of the twenty-five companies selected to participate in the auction finally decided to submit tenders, with the notable absence of oil giants like ExxonMobil and Chevron Americans, the French Total and the Anglo-Australian BHP Billiton, in a context of falling crude prices, which lessened the attractiveness of the lots.
After fourteen auction, only two sites have been awarded for lack of interest of the participating companies.
The successful consortium for both lots is led by the Mexican company Sierra Oil & Gas, American companies associated with Talos Energy and British Premier Oil.
These auctions were the culmination of a reform desired by President Enrique Peña Nieto, passed last year after a heated debate in Congress.
“This is terrible. It is a failure, “said AFP David Shields, an industry analyst based in Mexico City, director of the” Energia a Debate “magazine.
“It was the worst week (to organize the auction) because oil prices are very low and because of the agreement (on nuclear power),” signed the day before between Iran and Western powers, agreement should curb any potential recovery in crude by 2016.
At midday, the head of the Committee on hydrocarbons had nevertheless said “satisfied.”
Analysts had warned that the auction could be affected by the nuclear deal with Iran which, by lifting sanctions against that country, would enter the market 1.5 million barrels of additional crude oil per day.
The Mexican government will now prepare for the next auctioned that address deepwater drilling more likely to attract the interest of large groups.
Failures of Indian and Malaysian deals
In setting Wednesday’s auction, the Government had evaluated each site to $ 1.3 billion.
While nine of them have not been sold, three have been awarded due to insufficient rates given the authorities’ criteria.
The Indian national company ONGC Videsh Ltd., even being the only one to bid for one of the sites, failed, the percentage of payout proposed to the Mexican state being less than the requirements laid down by it.
An alliance between the US firm Murphy Worldwide and Malaysian Petronas has in turn helped to make an offer for 35% of fourth lot less than the minimum of 40% as defined by the government.
Unallocated blocks Wednesday will again be auctioned.
The consortium led by the Mexican company Sierra Oil & Gas received a batch of 465 square kilometers off the coast of Tabasco, beating Norwegian companies face the Italian ENI and Statoil, providing 69% of the revenue to the government.
The consortium received a second batch, off Veracruz, proposing to the State about 56%.
These disappointing findings add to an already difficult week for President Peña Nieto, marked by the drug baron’s escape Joaquin “El Chapo” Guzman, for the second time in 14 years.
The reform initiated by Mexican President broke the state monopoly Pemex the company since the nationalization of the sector in 1938.
Peña Nieto hopes to restart production of Mexican oil and thus stimulate the economy of his country after years marked by a steady decline in production, from 3.5 million barrels in 2004 to 2,300,000 today.
Playing transparency, the authorities had decided to broadcast live on the internet and on television these first auction.
The national company Pemex did not participate but could take part in the following.