Shell ahead in Mexico oil auction, wins five blocks

MEXICO CITY (Reuters) – Royal Dutch Shell (RDSa.L) won five of the first six oil and gas blocks in Mexico’s prized deep waters in the Gulf of Mexico, making the early running in the country’s biggest auction since the energy sector was opened to international oil firms.

The stakes are high for Mexican President Enrique Pena Nieto and his ruling party, which is keen to showcase the results of the liberalisation ahead of a presidential election in July.

Shell, in a consortium with Qatar Petroleum, won four of the first nine blocks on offer in the Perdido basin which is close to U.S. waters where oil firms already operate and have infrastructure.

The Anglo-Dutch company won one block in consortium with Mexican state oil firm Pemex. Pemex won one block, and three blocks were not awarded because they received no bids.

A Pemex logo is seen at the Energy Mexico Expo 2018 in Mexico City, Mexico January 30, 2018. REUTERS/Carlos Jasso

Competition for the basin was expected to be fierce, but a consortium of Shell and Qatar Petroleum was the sole bidder on three blocks.

“Mexico is the winner here,” said Alberto de la Fuente, president of Shell Mexico. Shell would spend more than the minimum investment it pledged in the bids, he said, but declined to give further details.

Shell won a block in an earlier auction in Mexico’s shallow waters in 2017. The company also has a chain of 30 gas stations in Mexico, he said.

The world’s top energy firms have lobbied for decades for access to Mexico’s oil and gas reserves. State oil giant Pemex, whose 75-year monopoly over the energy sector ended under Mexico’s 2013 reform, lacked the cash and the expertise to extract oil and gas from the rock below the country’s deepest waters.

Reporting by Marianna Parraga, Adriana Barrera and Ana Isabel Martinez in Mexico City, Alexandra Alper in Rio de Janeiro, Nidhi Verma in New Delhi and Osamu Tsukimori in Tokyo; Writing by Simon Webb; Editing by Andrew Hay



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