OVL qualified along with Chevron, Exxon for Mexico bid round

ONGC Videsh Ltd is among the 19 companies and seven groups to have pre-qualified to bid for Mexico's maiden offshore oil blocks auction.

OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has been pre-qualified alongside likes of supermajors Chevron and ExxonMobil to submit bids for Mexico's Round 1 to be held on July 15, the country's upstream regulator, National Hydrocarbons Commission (CNH) said.

In all 34 companies had applied to pre-qualify to bid for 14 oil blocks in the Mexico's first licensing round since 1938.

In addition to these 14 shallow-water blocks, the CNH will also auction 9 other shallow-water blocks in the Gulf of Mexico in September and 26 onshore blocks in December.

The 14 shallow water exploration blocks covering nine fields in Round-1 are estimated to hold reserves of 356 million barrels of oil and oil equivalent gas.

According to CNH, other firms in the fray include Atlantic Rim Mexico, BHP Billiton, Cobalt Energy, Spain's CEPSA, Hess, Hunt Overseas, Russia's Lukoil, Maersk Oil, Marathon, Nexen, Canada's Pacific Rubiales, Pemex, Plains Acquisition Corp, Premier Oil, Norway's Statoil, and Total of France.

Besides, the seven consortia pre-qualified include BG Group alongside Galp Energia; ENI along with Noble Energy and CASA Exploration; Murphy Worldwide along with Ecopetrol, Petronas, and PTTEP; Pan American Energy along with E&P Hidrocarburos y Servicios; Talos Energy along with Sierra Oil and Gas and Glencore E&P; Tullow along with Petrobal; and Woodside Energy along with Diavaz Offshore and Pluspetrol.

The pre-qualification criteria specified knowledge and experience in working in at least three shallow waters exploration and production of oil and gas or in one or two large-scale projects, which together involve capital investments of USD 1 billion.

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 shallow waters in the Gulf of Mexico in Round-1, more costly production in shale rock formations will be offered later. Mexico is expecting USD 50 billion investment by opening up its exploration sector to private and foreign players by 2018.

OVL has stake in 36 projects in 17 countries including Azerbaijan, Kazakhstan, Russia, Brazil, Colombia, Venezuela, Iraq, Syria, Libya, South Sudan, Sudan, Mozambique, Bangladesh, Myanmar, Vietnam and New Zealand.

It 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.