Report : Exxon, Chevron And Hess In Joint Bid For Mexican Oil

(RTTNews) - Exxon Mobil Corp. (XOM), Chevron Corp. (CVX) and Hess Corp. (HES) have agreed to bid together for rights to drill for crude in Mexico's deepwater oil areas, Bloomberg reported citing a person familiar with the matter.

The three U.S.-based producers have reached a Joint Operating Agreement, which allows the consortium to bid to produce oil in the 10 areas up for auction on December 5, according to the report.

Mexico hopes to raise $44 billion in its first-ever sale of deepwater drilling rights in the Gulf of Mexico, located in the Perdido area near the maritime border with the U.S. and in the southern Gulf's Cuenca Salina.

The country approved final legislation in 2014 to allow foreign crude producers to operate in Mexico for the first time since 1938, in an effort to reverse an 11-year decline in production.

All of the 26 companies that qualified to bid in the auction, including Royal Dutch Shell Plc, Statoil ASA, and BP Plc, are expected to sign similar agreements because the government's capital requirements for bidding are considered too large for individual producers to do so alone.

A Joint Operating Agreement can be dissolved if one of the companies withdraws its intention to participate in the contract, and the companies may opt not to bid even if the consortium is still in place, the report said.