First Pemex tie-up after milestone auction

MEXICO CITY, December 6, 2016 – Mexico held its highly anticipated deepwater bidding round on Monday night, with BHP Billiton becoming Pemex’s first-ever international partner.

The Australian major beat BP after a tie-break with an offer of USD 624 million. The win will see BHP and Pemex develop the Trion field from early 2017 onwards. Holding 60% and 40% stakes, respectively, the partners aim for first production in 2023. Two years later, output from Trion, estimated to hold 485 million boe, is projected to reach 120,000 bopd.

“Today for Pemex, it is an enormous step,” CEO José Antonio González Anaya said in a first reaction, adding that the company aims to enter into more than five additional tie-ups over the next two years. José Antonio’s sentiments were echoed by his BHP counterpart, Timothy Callahan, who said that the agreement marked a “great day for Mexico.”

The country’s National Hydrocarbons Commission expects the results of the auction to be instrumental in raising domestic production. Commenting on the outcome, President Commissioner Juan Carlos Zepeda said deepwater developments could add as many as 900,000 bopd over the next five to 10 years.

The bidding round also saw awards for Perido Fold Belt and Salina Basin areas. China National Offshore Corporation won Perido Fold Belt areas 1 and 4. Area 2 was awarded to a partnership between Total and ExxonMobil, while Perido Fold Belt 3 went to the Chevron-Inpex-Pemex trio.

A joint venture between BP, Statoil and Total won Salina Basin areas 1 and 3. Petronas Carigali and Sierra Oil & Gas were awarded area 4, with area 5 going to the Petronas, Sierra, Ophir Energy, Murphy Oil quartet. There were no bidders for Salina Basin areas 2 and 6.

The National Hydrocarbons Commission expects the eight awards to yield USD 34.4 billion over a 35-year period.

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