ONGC puts in bid as Mexico opens up oil exploration
06 April 2015
Oil and Natural Gas Corp (ONGC) is among three dozen global energy majors competing for oil and gas blocks in Mexico's maiden licensing round.
ONGC Videsh Ltd (OVL), the overseas arm of the state-owned explorer, was among the international firms, which signed up to pre-qualify for Mexico's inaugural Round-1 bid offering at the end of deadline on 31 March, industry sources told PTI.
The company is pitched against the US majors ExxonMobile and Chevron, Anglo-Dutch firm Shell as well as national oil companies and Mexican players for 14 shallow water exploration blocks in the country's southern region.
Others in fray include Mexican state-owned petroleum company Pemex, Norway's Statoil, Colombia's EcoPetrol, Brazil's Petrobras and PTTEP of Thailand.
Mexico is opening up its oil sector to private players for the first time after more than 75 years of monopoly by state company Petrleos Mexicanos or Pemex. The blocks on offer may hold prospective resources and are estimated at 3.7 billion barrels of oil equivalent.
Other global players which have bid include Australia's BHP Billiton, BG Group, BP and Premier Oil of the UK, Italy's Eni, Portugal's Galp, Spain's Cepsa, Russia's Lukoil, Denmark's Maersk, Japan's Inpex and Total of France.
Jogmec, Japex and Mitsubishi of Japan, privately held independent Casa Exploration and Mexican explorer Petrobal as well as Canada's Nexen and Pacific Rubiales are also in fray. American independents, including Cobalt, Hess, Marathon, Murphy, and Noble -- already active in their home sector of the Gulf of Mexico -- have also put in pre-qualification bids.
According to the bid criteria, companies will have an initial exploration period of four years, with the possibility of a two-year extension. They also have to drill at least one well after winning the block.
While Mexico is offering the shallow waters in the Gulf of Mexico in Round-1, more costly production in shale rock formations will be offered later. Mexico is expecting $50 billion investment through opening up its exploration sector to private and foreign players by 2018.
OVL has an interest in 33 oil and gas assets in 16 countries and contributes to 14.5 per cent and 8 per cent of oil and natural gas production of India respectively. In terms of reserves and production, it is the second largest petroleum company of India, next only to its parent ONGC.