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Mexico's bid round for shallow waters begins

Round 3 will offer 35 blocks with regulators hoping to repeat success of first shallow-water offering in 2015

MEXICAN regulators have started the country’s third bid round for oil and gas acreage, which will see offers opened in March 2018 for 35 blocks in shallow waters.

The call to bid for Round 3.1 comes as the ink has scarcely dried on the signing of contracts from the highly successful Round 2.1, which awarded 10 of 15 blocks on offer to a range of companies including global majors and private-equity backed outfits.

Data rooms will open on 16 October. The deadline to pre-qualify will be 19 January and bids will be opened on 27 March.

Terms will be similar to prior rounds, including the production-sharing contract model, and companies that have previously participated can qualify "automatically" in a streamlined process. The announcement meets the self-imposed deadline of Mexico’s National Hydrocarbons Commission (CNH) and Energy Ministry to offer up a standardised Round 3 in 2018.

The administration of Mexican energy reform proponent Enrique Pena Nieto is keen to complete as many of its goals as possible before the end of his six-year term, which ends next year.

It will also come as blockbuster results are beginning to be seen from the exploration and appraisal drilling from the country’s first shallow-water rounds carried out in 2015, with three companies already poised to move discoveries to development. Italy’s Eni now estimates that its Contractual Area 1, containing the Amoca discovery, has a resource of 1.4 billion barrels of oil equivalent in place. Talos Energy, following its groundbreaking Zama-1 wildcat, also estimates it has over 1 billion barrels on its hands.

While Pan American Energy has not released a resource estimate, the company is already progressing work for a fast-track development at the Hokchi block.

Round 3.1, with just under three dozen blocks, will include the most shallow-water areas of any offering yet, but will offer up a wider variety of tracts from throughout Mexico’s geological provinces.

The selection will include only eight blocks in the South-East basin where most shallow-water licencing has occurred to date. Those areas cover about 5348 square kilometres, with a prospective resource of 192 million barrels of oil equivalent and estimated remaining volumes of 96 million barrels of oil equivalent.

There will also be 14 blocks in the Burgos basin covering 8424 square kilometres and have an estimated resource of 579 million barrels of oil equivalent.

The round will also offer 13 areas in the Tampico-Misantla and Veracruz regions, which will cover a total of 12,493 square kilometres. Prospective resource is estimated at 1.217 billion barrels of oil equivalent, while remaining volumes are estimated at 193 million barrels of oil equivalent.