CNOOC looking for farm-out deals in the Gulf of Mexico

CNOOC Ltd. is searching for partners to develop oil prospects in the deepwater Gulf of Mexico, according to a Bloomberg report.

Offshore staff

BEIJINGCNOOC Ltd. is searching for partners to develop oil prospects in the deepwater Gulf of Mexico, according to a Bloomberg report.

After bidding alone for exploration rights in Mexico’s first-ever deepwater auction in 2016, CNOOC is seeking deals known as farm-outs, where a stake in an oil prospect is exchanged for help with drilling and production. The company has yet to choose partners, a Beijing-based spokeswoman for CNOOC was quoted to say.

CNOOC is the first foreign producer to seek a farm-out in Mexico since the opening of the country’s oil industry to competition, following decades of a monopoly in the hands of state-owned producer Petroleos Mexicanos.

“It makes sense that CNOOC would seek a partner,” saidJuan Carlos Zepeda, Mexico’s oil commissioner, as quoted in the Bloomberg report. “It’s logical because in deepwaters, companies normally develop the projects in consortium groups or partnerships.”

If CNOOC seeks a partner to act as operator in one or both of its deepwater oil areas, it would have to be approved by the country’s oil regulator, Zepeda added.

The company was awarded two blocks just south of the US-Mexico maritime border in the Perdido foldbelt, where Mexico estimates the bulk of its untapped oil potential is located. It is one of the deepest exploration areas in the world.

CNOOC, which has been an active participant in other Mexico oil auctions, is one of 16 companies qualified to bid to partner withPEMEX in three fields where the country’s state-owned operator is seeking joint ventures next month.

In the December 2016 deepwater auction, CNOOC was the only company that won oil areas as a lone bidder, while companies such as Total SA, Exxon Mobil Corp., and Chevron Corp. won rights to develop Mexican crude as part of consortium groups.

09/21/2017

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