New Delhi, July 17 (PTI): ONGC Videsh Ltd (OVL), the overseas arm of state-owned explorer Oil and Natural Gas Corporation (ONGC), has lost out on its bid for two oil blocks in Mexico's first licensing round in 88 years.
OVL had bid for two of the 14 shallow-water blocks on offer. Its bids were rejected by the Mexican government's upstream regulator as they were below the floor for share of profit that ranged from 25 per cent to 40 per cent.
The company was the sole bidder for Area 6 and 12 but the bids were "rejected as it was considered too low", according to Mexico's National Hydrocarbons Commission.
OVL pre-qualified to bid along with 18 other firms, which included Chevron, ExxonMobil, 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.
Mexico awarded just two of the 14 blocks on offer in an auction that saw participation by only nine companies.
As many as seven companies submitted bids for one or more of the blocks in the southern Gulf of Mexico. Numerous blocks received no offers and others had bids that were below the minimum requirement for profit-sharing with the government.
According to the National Hydrocarbons Commission, the two blocks that OVL had bid for were won by Mexican company Sierra Oil & Gas in a consortium with Houston-based Talos Energy LLC and UK's Premier Oil PLC, which offered to pay the government 55.99 per cent of the operating profit from the first block and 68.99 per cent from the second.
Besides OVL, other firms that bid included Norway's Statoil ASA, Hunt Overseas and Murphy Worldwide Inc with Petronas Carigali International.