BHP outbid by Shell for Mexican oilfield

Shell outbid BHP for a prime Mexican oil exploration ground, after it kept quiet about a huge nearby find in US waters.

Oil rigs in the Gulf of Mexico. Pic: AFP

Oil major Shell has outbid BHP Billiton for prime deepwater Mexican offshore oil exploration ground, after the Anglo-Dutch giant kept quiet about a huge nearby discovery in US waters.

Shell was this week announced as the winner in the country’s biggest offshore auction since the sector was recently opened to international oilfields.

The oil major was awarded nine offshore blocks. Analysis of the results by Reuters show BHP and China Offshore were the losing bidders on at least one of the blocks, in the Perdido Fold Belt.

BHP took the lead in Mexico’s opening up of the industry in 2016, striking a $US1.2 billion deal with national oil company Pemex to farm into the Trion discovery in the Perdido Fold Belt.

This week, the day the latest auction results were announced, Shell gave an inkling of why it had bid so hard on the Mexican blocks.

It announced a big, linked discovery near its Perdido platform, just across the offshore border in the US Gulf of Mexico.

At 427 metres of oil-bearing pay from the Whale exploration well, the find by Shell and Chevron is one of Shell’s biggest Gulf of Mexico finds of the past decade.

Overnight, Shell chief Ben van Beurden admitted the company had delayed announcing the US find so it would have “inside running” on the Mexican auction.

“This (the Mexican auction win) is really exciting news as it allows us to leverage our decades of expertise and leadership that we have developed on the US side of the Gulf of Mexico,” Mr van Beurden said.

“That will complement, of course, our existing position in the region. And I can assure you, there will be more to come on this in the coming quarters and years.”

He said he was very happy with the bidding.

“Needless to say that we had a bit of an inside track on Perdido, which we didn’t want to disclose, hence we only disclosed a well discovery after the bid round. I think we knew what we were doing there.”