Lukoil to try to buy a deposit in Mexico again

​The second auction will be held in Mexico today where shelf blocks at the coast of the Tabasco and Campeche states will be put up for sale. 4 consortium and 10 companies, including Lukoil Overseas Netherlands B.V., will participate in it.

Mexico tried to ease the conditions of the auction as at the previous one in July only 2 out of 14 blocks were sold. They say the failure was due to the absence of attractive assets and strict conditions.

Now the Government of Mexico has changed the conditions. They have reduced the warranty payment from $6 bln to $1 bln, softened the financial conditions and reduced their part of profit from extraction.  The attractiveness of this auction is slightly connected with the quality of assets and strictness of conditions of the agreement, F. Gate, analyst of Oppenheimer & Co. said. There is not too much free money in the sector now.

Another potential obstacle is that there are no deep water deposits attractive for many oil companies in the second auction as well. The reserves are located along the line separating the American and Mexican waters of the Bay. However, these assets won’t be available until the next year.