Mexico and Shell win big in Round 2.4
Mexico closed its second deepwater auction today on a high note. Mexico's National Hydrocarbons Commission (CNH) awarded 19 of the 29 blocks on offer, raising more than US$500 million in cash payments. Shell dominated the auction, winning nearly half of all blocks awarded.
As expected, the acreage in the Perdido and Salinas Sureste areas proved to be the most sought after of the round. Shell won five of the six awarded blocks in the Perdido area.
Our Latin America upstream analysts have been closely watching the progress of Mexico's Energy Reform. The round's success is a particularly noteworthy achievement for Mexico as it comes as several other deepwater rounds are in progress worldwide.
Maria Cortez, Latin America Upstream Research Manager, explains:
The Majors used this round to increase their exposure to some of the most attractive deepwater areas in the world. Today’s result validates the Mexican government’s approach to setting competitive fiscal terms, which promoted active bidding, and drove up the value of acreage.