Royal Dutch Shell Plc Rules the Deep Waters of Mexico

The British–Dutch multinational oil and gas company became took the throne of Mexico’s deep waters in the span of a few hours.

Shell once ruled the oil industry of Mexico and operates the deepest prospects in the U.S. side of the Gulf. The company has recently made a comeback through winning around a third of the offerings in biggest bidding round in Mexico to date.

The strongest sign so far that Mexican President Enrique Pena Nieto’s energy reform is bearing fruit was the auctioning of exploration and production permits on Wednesday, which was done by luring investment plans that will help get Mexico’s oil production back on track.

Oil commissioner Juan Carlos Zepeda stated after the auction that Mexico is having a lot of success with attracting investment from national and foreign oil companies. This is being achieved with very good financial terms for the Mexican government.

The Latin American nation is attempting to sell its wealth to bring the seven largest oil companies’ billions back eight decades after seizing assets from Shell and Standard Oil Co. of California, the remains of the John D. Rockefeller empire that became Chevron Corp. later on.

 

According to a government website, a unit of Shell was directly responsible for more than 60 percent of Mexico’s production before expropriation of foreign assets back in 1938.

Production in the country has diminished year after year under state-owned Petroleos Mexicanos, which held a monopoly until the reform back in 2013. On the other side of the maritime border with the U.S. however, The Stones and Perdido prospects of Shell are the two deepest offshore projects in the world, stated in the company’s website.

Shell has won the rights to nine of the 29 prime Gulf of Mexico tracts offered near the U.S. side in Wednesday’s bidding round. The producer based in Hague, as a lone bidder, seized four sites along the Salina basin, four others in the Perdido area in a partnership with Qatar Petroleum, and another one with Pemex.

Shell has won rights to establish a shallow-water area with Total SA last year and has also opened gasoline stations throughout Mexico in 2017. The country chief of Shell, Alberto de la Fuente, stated that the company looks to invest at least $1 billion in fuel stations alone over the span of 10 years in Mexico.

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