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Mexico's Round One - competitive minimums set for shallow-water development phase


Mexico's Round One - competitive minimums set for shallow-water development phase

Report summary

On 14 September, Mexico's Finance Ministry announced the minimum acceptable bids for the shallow-water development opportunities phase in Round One. The announcement comes two weeks ahead of the phase's closing on 30 September 2015. We consider the minimum acceptable bids to be internationally competitive and believe that around two-thirds of the qualified companies could place bids. We believe this will result in at least three of the five available areas being awarded.

What's included?

This report includes 2 file(s)

  • Mexico's Round One - competitive minimums set for shallow-water development phase PDF - 397.47 KB 6 Pages, 2 Tables, 4 Figures
  • Final - Insightv4.xls XLS - 631.50 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

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  • The announced minimum is competitive
    • Fiscal benchmarking using government take (0% discount rate, real)
    • Effect of government profit share bid on company IRR
  • Companies with deep pockets and a long-term Mexico strategy will bid aggressively
    • Consortia will be the most aggressive peer group due to lack of oil price exposure
    • Majors could be participating for the learning experience
    • Asian NOCs are looking for long-term resource access
    • Other international players consider Mexico an attractive opportunity to enhance their portfolios
  • Mexico is applying lessons learned and moving in the right direction

In this report there are 6 tables or charts, including:

  • The announced minimum is competitive
    • Minimum acceptable government profit share bids per area
    • Mexico's Round One - competitive minimums set for shallow-water development phase: Image 2
    • Mexico's Round One - competitive minimums set for shallow-water development phase: Image 3
    • Company IRR sensitivities to changes in cost, production, and oil prices
  • Companies with deep pockets and a long-term Mexico strategy will bid aggressively
    • List of qualified companies
  • Mexico is applying lessons learned and moving in the right direction
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