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Mexico’s oil regulator canceled on Thursday an auction slated for January 31 for a joint venture with state oil company Pemex in a deepwater area containing super light crude oil, because no company had expressed interest in the tender.
The auction—this time a farm-out auction—is the second oil auction to fall flat of expectations this week, after yesterday, US officials announced disappointing results from its lease sale in Arctic Alaska.
Mexico’s National Hydrocarbons Commission, CNH, was seeking a company that would be willing to join Pemex in tapping super light crude in the Maximino-Nobilis area in the Gulf of Mexico near the border with the U.S.
The fields, discovered by Pemex in 2013 and 2016, are estimated to hold more than 500 million barrels of crude oil equivalent (bpce) in its total 3P reserves, according to the state oil firm. The field in the area of Perdido is estimated to have prospective resources greater than 700 million bpce, mainly of light crude oil, Pemex says.
These kinds of joint ventures with the state oil firm Pemex, known as farm-outs, are part of the Mexican government’s efforts to attract foreign investors to its oil and gas sector after ending decades of Pemex monopoly in 2014.
The Mexican regulator had previously expected first commercial oil at Nobilis-Maximino by 2024, and peak production of 174,000 barrels of oil equivalent (boe) and 265 million cubic feet of natural gas per day coming on stream in 2026.
Related: Oil Investors Are Growing Impatient
Before the regulator’s decision to cancel the auction due to lack of interest, a Pemex official said in November that the state firm’s stake in the possible joint venture would be cut to 40 percent from 49 percent. Still, there were no takers.
Earlier this year, the head of the oil regulator, Juan Carlos Zepeda, said that the cost of the Nobilis-Maximino project would be around US$10.7 billion. The production costs were estimated at US$27 per barrel.
Considering the fact that the oil regulator has now cancelled the farm-out tender, it looks like neither Big Oil nor independents are interested in this particular deepwater field offshore Mexico.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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