Energy-deficit India, which imported crude oil worth $112.75 billion in FY15, is eyeing to grab oil and gas blocks in hydrocarbon-rich Mexico, which has opened up its acreages for foreign companies to explore hydrocarbons after a more than 75-year hiatus. Petroleum minister Dharmendra Pradhan, along with managing director of ONGC Videsh (OVL) Narendra K Verma, is likely to visit Mexico and Colombia to talk out important energy deals.
“A ministerial delegation headed by the petroleum minister is being mounted to Mexico and Colombia along with top officials from government and oil companies from May 18 to 22,” a diplomatic source told FE.
Since the time Mexico announced offering of its oil and gas blocks to overseas firms, OVL, the overseas subsidiary of state-run explorer ONGC, is in discussions with Petróleos Mexicanos (PEMEX) the national oil company of Mexico, for a potential tie up to pick up equity in exploration and production assets in the Latin American nation. “We are interested in both shallow water and deep water blocks,” OVL director (finance) SP Garg told FE. He, however, did not divulge details about how many blocks OVL is targeting to bid in Mexico.
In order to bag prolific assets in the Cantarell and Ku-Maloob-Zaap areas of the Gulf of Mexico, OVL would have to challenge counter bids from US energy firms Exxon Mobil and Chevron, Anglo-Dutch firm Royal Dutch Shell, and other interested companies such as Norway’s Statoil, Colombia’s EcoPetrol, Brazil’s Petrobras and PTTEP of Thailand for more than a dozen blocks. Nearly 30 companies are scrutinising the geological information in the data rooms.
The PM Narendra Modi-led government is pursuing state-run firms ONGC and Oil India to vigorously pursue acquisition of oil and gas assets overseas. Now, it is to be seen if the Modi-led government could purse the Enrique Peña Nieto-headed Mexican government to let Indian explorers get a pie of its energy assets. “The new government is taking pro-active steps to secure energy assets overseas. This comes alongwith preparing a war chest to bag the contract… These endeavours by government would certainly help gain access to hydrocarbon resources overseas,” said Gaurav Moda, head (oil and gas practice) at KPMG in India.
Bloomberg quoted Mexico’s energy minister Joaquin Coldwell as saying the fields hold an estimated 20.6 billion barrels, enough to maintain production levels of at least 2.5 million barrels a day for the next 20 years.
Into the Gulf of Mexico
* Pradhan to push India investments in Mexico; South American nation holding auction for the first time in 75 years
* OVL to face stiff competition; at least 30 global firms in fray
* Blocks lie in prolific Cantarell and Ku-Maloob-Zaap areas of the Gulf of Mexico
* Cost of production in shallow-water less than $20/barrel