Insight: Southern GoM Frontier Oil, Gas Exploration Faces Challenges

Mexico opened the door for the world’s oil and gas companies to pursue deepwater exploration in the southern Gulf of Mexico (GoM), but replicating the success seen on the U.S. side could be challenging for those that have entered.

Geology could pose obstacles, according to analysts.

“The southern GoM is not a direct analogue to its conjugate in the North,” Vikesh Mistry, a global exploration research analyst for Westwood Energy, said in a report. “Tectonic processes related to Pacific plate motions contribute to making this part of the GoM structurally more complex.”

Oil and gas companies—majors and smaller companies alike—have flocked to deepwater bidding rounds offered by the Mexican government in hopes of finding hydrocarbons beneath the seafloor in what Westwood calls a “largely frontier” area. Two deepwater rounds offered in 2017 and 2018 resulted in just under 30 blocks—with the Campeche Salt Basin’s Miocene turbidite play getting the most attention—being awarded to 17 companies. Together the companies have committed to drill a total of 31 wells, according to the consultancy.