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Canada’s Crude Crisis Is Accelerating

Canada’s Crude Crisis Is Accelerating

Canada’s crude crisis is accelerating,…

Mexico Announces Bid Terms For Next Oil Tender

Exploration vessel

Mexico’s National Hydrocarbons Commission has announced the bid terms for the September 27 oil and gas tender, which will offer 37 onshore blocks, Reuters reports. The terms include a minimum royalty range of 2.5-5 percent and a maximum additional royalty range of 25-40 percent.

The NHC also announced seven joint ventures including state major Pemex up for grabs for the September 27 tender. Six of the seven are offered on the condition that interested companies or consortia provide additional royalty commitments of 15 percent, and the seventh one requires an additional royalty commitment of 6 percent.

The candidates for the joint ventures will also need to offer additional cash payments to the government, ranging from US$5 million to US$146 million. The size of the payments is equal to Pemex’ past investments in the projects. The joint ventures will be tendered at the end of October.

The 37 blocks that will be offered in September, are located in four potentially prolific regions, including Sabinas-Burgos, Tampico-Misantla, Veracruz, and the Southeast Basins.

Burgos is Mexico’s largest gas-producing basin, located in the northeastern states of Tamaulipas and Nuevo Leon. The Sabinas basin is in northern Mexico. The Tampico-Misantla basin has been touted as Mexico’s equivalent of the Permian in the United States by IHS Markit. The basin has some 2.5 billion barrels of oil equivalent in potentially recoverable reserves.

Related: Oil Inches Higher On Strong Crude Draw

The Veracruz basin, for its part, was the location of the biggest onshore oil discovery in Mexico for the last 15 years. In November last year, Pemex announced it had struck a reservoir holding an estimated 350 million of proven, probable, and potential oil barrels.

NHC will also offer several shale blocks at the September 27 tender, but the agency revealed no details about this part of the tender.

The September and October tenders are the last two of the outgoing Pena-Nieto administration. There has been worry that if the next administration is led by Andres Manuel Lopez Obrador, it might put an end to the tenders, as Obrador has threatened.

By Irina Slav for Oilprice.com

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