By OGJ editors
HOUSTON, Dec. 3 -- There are three possible scenarios to explain why an oil company, such as ExxonMobil Corp. and Total SA, might buy a bid package yet ultimately not place an actual bid for the Multiple Service Contract tenders (MSCs) being offered by Mexico's national oil company Petroleos Mexicanos (see related story, this page).
This is according to Mexico Energy Intelligence (MEI), a Houston-based trade publication published by Baker & Associates that covers energy markets and policy developments in Mexico.
After having correctly predicted the results of two of the first three MSCs 6-8 weeks before their announcements, George Baker, MEI principal, asks, "Two Pemex MSC tenders have no bidders: What does it mean? What does this mean for Pemex's high-flying MSC program, which was designed to attract international investment in Mexico's energy sector without increasing sovereign debt?"
Meanwhile, Pemex Manager of Economic Analysis Sergio Guaso dismissed the importance of the lack of bidders for the Corindón-Pandura Block, but it will be difficult to dismiss the importance of two consecutive public tenders with no bidders.
Baker said that the reasons for a company to buy a bid package yet not place an actual bid "vary from the unattractive economics (by traditional oil company standards) to the unattractive politics of ultranationalists" from the Institutional Revolutionary Party and Democratic Revolutionary Party.
MEI presented three possible scenarios.
First, a company might buy the tender package even without intending to bid, Baker said. "It might seek to attain greater access, to learn more about the level of detail and reliability of Pemex geological and geophysical data, and to build a relationship with key Pemex people involved with the tender."
Second, a company might have intended to bid, "provided the economics of that block proved attractive," Baker noted. "In the case of the two voided tenders, prospective bidders may have concluded that geological and engineering data did not support a sufficiently profitable venture."
Baker concluded, "A third scenario says that a company wishes to avoid public relations problems associated with the increasingly tense political situation between the [Vicente] Fox administration and the Mexican Congress. A company could have bought the tender, intending to bid, then decided that the political timing was not right for its corporate image in Mexico and abroad."
