We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ExxonMobil, Hess & Chevron Team Up for Mexican Oil Auction
Read MoreHide Full Article
ExxonMobil Corporation (XOM - Free Report) , Chevron Corp. (CVX - Free Report) and Hess Corporation (HES - Free Report) have joined forces to bid for rights to explore for crude in Mexico’s deepwater oil areas, per sources with direct knowledge of the plans.
According to the sources, the companies have reached a Joint Operating Agreement that facilitates the consortium to bid for oil production in the 10 areas that will be auctioned on Dec 5. A Joint Operating Agreement is a contract that ascertainsassigns the role and obligation of each participant as well as designates the company that will act as the operator of a production area in case it is awarded in the auction.
This is the first time since 1938 that foreign crude producers have been allowed to operate in Mexico after the country approved final legislation with respect to the same in 2014. This is an attempt to reverse an 11-year decline in production in the nation. Mexico expects to raise $44 billion through its first-ever sale of deepwater drilling rights in the Gulf of Mexico. The region is located in the Perdido area, which is adjacent to the maritime border with the U.S and in the southern Gulf’s Cuenca Salina. Per the Mexican Energy Minister, 76% of the country’s potential oil resources are located offshore in deep waters.
The 26 companies that have qualified to bid in the auction include large foreign oil operators like Royal Dutch Shell plc (RDS.A), Statoil ASA (STO) and BP plc (BP - Free Report) . These companies possess the expertise and capital to produce crude miles below the surface of the Gulf, which Petroleos Mexicanos or “Pemex” has been unable to explore because of lack of technology.
All the qualifying companies are expected to sign similar agreements because the government’s capital requirements for bidding are considered too huge for individual producers to meet. In May, the country’s state-owned oil company, Pemex, announced that it is in discussions with ExxonMobil, Chevron and Total SA (TOT) to ink agreements of mutual interest to ponder over the prospect of bidding jointly in the deepwater round.
A Joint Operating Agreement might be dissolved if any one of the companies withdraws its intention to take part in the contract. Also, the companies may elect not to bid even if the consortium remains intact.
However, none of the concerned parties disclosed any details regarding this development.
ExxonMobil, Hess and Chevron all carry a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
ExxonMobil, Hess & Chevron Team Up for Mexican Oil Auction
ExxonMobil Corporation (XOM - Free Report) , Chevron Corp. (CVX - Free Report) and Hess Corporation (HES - Free Report) have joined forces to bid for rights to explore for crude in Mexico’s deepwater oil areas, per sources with direct knowledge of the plans.
According to the sources, the companies have reached a Joint Operating Agreement that facilitates the consortium to bid for oil production in the 10 areas that will be auctioned on Dec 5. A Joint Operating Agreement is a contract that ascertainsassigns the role and obligation of each participant as well as designates the company that will act as the operator of a production area in case it is awarded in the auction.
This is the first time since 1938 that foreign crude producers have been allowed to operate in Mexico after the country approved final legislation with respect to the same in 2014. This is an attempt to reverse an 11-year decline in production in the nation. Mexico expects to raise $44 billion through its first-ever sale of deepwater drilling rights in the Gulf of Mexico. The region is located in the Perdido area, which is adjacent to the maritime border with the U.S and in the southern Gulf’s Cuenca Salina. Per the Mexican Energy Minister, 76% of the country’s potential oil resources are located offshore in deep waters.
The 26 companies that have qualified to bid in the auction include large foreign oil operators like Royal Dutch Shell plc (RDS.A), Statoil ASA (STO) and BP plc (BP - Free Report) . These companies possess the expertise and capital to produce crude miles below the surface of the Gulf, which Petroleos Mexicanos or “Pemex” has been unable to explore because of lack of technology.
EXXON MOBIL CRP Price
EXXON MOBIL CRP Price | EXXON MOBIL CRP Quote
All the qualifying companies are expected to sign similar agreements because the government’s capital requirements for bidding are considered too huge for individual producers to meet. In May, the country’s state-owned oil company, Pemex, announced that it is in discussions with ExxonMobil, Chevron and Total SA (TOT) to ink agreements of mutual interest to ponder over the prospect of bidding jointly in the deepwater round.
A Joint Operating Agreement might be dissolved if any one of the companies withdraws its intention to take part in the contract. Also, the companies may elect not to bid even if the consortium remains intact.
However, none of the concerned parties disclosed any details regarding this development.
ExxonMobil, Hess and Chevron all carry a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>