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Egypt's Cheiron & DEA Deutsch Won Mexico Onshore Oil Fields

Source: www.gulfoilandgas.com 10/4/2017, Location: South America

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Petroleos Mexicanos finalized two new farmouts or partnerships, for the optimization of the development of the onshore fields of Cardenas-Mora and Ogarrio. Thus, the company continues to implement its Business Plan for 2017-2021, taking advantage of the tools and flexibility granted by the Energy Reform, which was in turn promoted by President Enrique Pena Nieto.

This new bidding process was conducted with complete transparency by the National Hydrocarbons Commission. The winners of the bids are companies that have proven their capabilities and experience in this kind of areas. These new Pemex partners will be the operators of the oil fields.

Cardenas-Mora

The Egyptian company Cheiron Holdings Limited was awarded the winning bid during the process of the C?rdenas-Mora block, by making an offer consisting of an initial payment of 125 million dollars, which acknowledges previous investments made by Pemex, as well as additional royalties of 13% and a cash payment of 41.5 million dollars (md), which guarantees that the Mexican State will receive the value of the rent of the oil field.

The Cardenas-Mora block covers a surface of 168 km2 and is located approximately 62 km from Villahermosa, in the state of Tabasco. It contains proven (1P) reserves of 93 million barrels (MMbpce) of light, high-quality crude oil equivalent (39°API).

Participation in this block will be divided between Pemex and Cheiron, with 50% each, including some parts of the existing infrastructure, as has been established in the Bidding Terms. Cheiron, which will be the operating company, is a global enterprise with its headquarters in Cairo.

Ogarrio

The German company DEA Deutsche Erdoel was the winning bidder of the process for the Ogarrio field. This was achieved by offering an initial payment of 190 million dollars, acknowledges previous investments made by Pemex, as well as an additional royalty of 13% and a cash payment of 213.9 md, which is the highest sign-up bonus ever offered in CNH (Acronym in Spanish for National Hydrocarbons Commission) bidding processes, and which guarantees that the Mexican State will capture the value of the rent of the oil field.

Ogarrio is a mature field that is located in the Southeastern Basins. It covers a surface of 156 km2 and lies approximately 65 km off the coast of Coatzacoalcos, in the state of Veracruz. According to Pemex estimates, it contains 3P reserves of 54 MMbpce of high quality light crude oil (37°API). There is the opportunity to increase this field’s production in the short term by interventions to existing wells.

Participation will be divided between Pemex and DEA Deutsche, with 50% each, which includes some of the existing infrastructure, as established in the Bidding Terms. The German operating company is a global enterprise, with its headquarters in Hamburg. It maintains a presence in four continents, mainly in Europe and Northern Africa.

It is estimated that the production in the fields of Ogarrio and Cardenas-Mora will increase by at least 30% through secondary recovery processes.

At the beginning of the session, the shallow water block of Ayin-Batsil was declared to be void, as no offers were received.

The two new farmouts that were finalized today are added to the bidding process of the deep-water block Trion, which was carried out this past December 5th. In this process, the Australian company BHP was the winner. Thus, Pemex has made significant progress in its joint venture strategy, which allows it to diversify and optimize its projects and investments portfolio. Pemex continues to increase its profitability and to consolidate its finances to become a more competitive company in the current environment of the global oil industry.

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