Latin American Economy & Business - July 2015 (ISSN 1741-7430)

Sierra Oil Wins Round 1 Licences: Mexico’s Sierra Oil and Gas led the only consortium to win licences in the first phase of the country’s Round 1 hydrocarbons licensing auction, announced on 15 July. Sierra, in partnership with Talos Energy of the US and Premier Oil of the UK, was declared the winner of the shallow water Blocks 2 and 7 in the Gulf of Mexico. Under the bidding rules, companies were required to offer a share of profits to the government and a minimum level of investment in developing the blocks. Mexico’s regulator, Comisión Nacional de Hidrocarburos (CNH), said that the consortium had offered the government 74%-86% of the profits from Block 2 (off the coast of Veracruz) and 83%-88% of the profits on Block 7 (facing the coast of Tabasco). The CNH estimated that investment in each block would be around US$1.3bn over the next five years. Each licence has a 30-year term. Contracts will be signed in August.