ExxonMobil, Chevron, Total opt out of Mexico’s historic auction

Exxon Mobil, Chevron and Total have opted out of Mexico’s historic oil auction because the fields are too small. None of the 14 shallow-water prospects in the Gulf of Mexico holds more than 384 million barrels of crude, according to Mexico’s National Hydrocarbons Commission. That is far short of the billion-barrel finds prized by major international oil producers, according to analysts.

“Shallow water is the minor leagues and these companies want to play in the major leagues,” Deepwater is where the major leagues are. The shallow waters have already been picked dry.”

Other US and European explorers that abstained from the first round of bidding also probably balked at some of the financial and contractual terms insisted upon by the Mexican government. Any terms that would have crimped the profitability of developing those fields could have made explorers even more reluctant to risk their investment dollars, he said.

Spokespeople for Exxon and Chevron both said the companies intend to continue assessing future Mexican oilfield offerings for potential investment opportunities. The 14 oil blocks collectively cover an area of the sea floor more than five times the size of New York City.

Future bidding rounds involving bigger oil fields in deep parts of the Gulf of Mexico will draw more interest from big international producers. Major international producers will eventually seek footholds in Mexico’s oil sector because the country’s untapped crude reserves are too vast to ignore.