Galp Energia is on the run for Mexican oil

Galp Energia is in the run for oil in Mexico. The Portuguese oil company stands among those who are pre-qualified for the auction of a set of oil blocks in the Gulf of Mexico that will move forward in the end of January. The company headed by Carlos Gomes da Silva refrained from commenting, but ECO knows the company is studying deep-water areas — its specialty — and is analyzing possible partners to enter the Mexican competition.

Mexican oil would be a novelty in the Portuguese oil company’s portfolio, whose activity is mainly focused on Brazil and Africa. In 2015, Galp had already applied for the acquisition of a legal license for the extraction of oil in shallow waters in the Gulf of Mexico, in consortium with Petronas, from Malaysia, but to no avail.

Now, Galp is trying to find its luck in deep waters, where it is experienced. The company is also interested in Mexico because of its workers’ experience in the Atlantic basin and because of the cultural proximity between both countries, such as it happens in Brazil and Angola, where Galp is also present.

Galp will compete as a non operator, which means it does not want to lead a block, but is seeking a partnership with other oil companies. It is currently being analysed by those responsible for the Portuguese oil company: possible partners for a stronger competition. More so because the competition in the auction is strong: there are 13 companies from all over the world that are running side by side with the Portuguese oil company as a non-operator, including large international players such as the Russian from Lukoil, the Japanese from Mitsiu or the Qataris Qatar Petroleum International.

Although several Mexican blocks are on the market, the Portuguese company is mainly interested in exploring the deep waters in the area of Perdido, Cordilheiras Mexicanas and Cuenca Salina.

Last month, the Comisión Nacional de Hidrocarburos (CNH), the Mexican entity that manages auctions for the country’s energy exploitation, announced the list of companies that are in the pre-qualification stage for this auction round. Then, between 18 and 19 of January, those who are interested should send CNH a bidders’ request. Then, on January 26, CNH will announce which oil companies will take part in the auction, individually or in a consortium, and they should send their economic proposals on January 31.

The Exploitation & Production segment represents almost half of Galp’s EBTIDA, and it made a 606 million euros’ contribution to the results before taxation of 1,379 million euros that the oil company earned in the first nine months of last year.

When contacted by ECO, Galp stated they do not comment on their positioning in auctions.