How badly does the geophysical community want to explore Mexico? If permit applications are any indication, pretty badly indeed. Within a week of announcing its new surface exploration permit guidelines, the Comisión Nacional de Hidrocarburos (CNH) received nine applications.

This is the beginning of the expected groundswell following last year’s energy reform measures in Mexico. Already bids are being accepted for Round 1, phase 1, which is in shallow-water areas of the Mexican side of the Gulf of Mexico (GoM). Under the terms of the permit, geophysical contractors will have the right to license any data they acquire multiple times for 12 years after acquisition, after which time it will revert to the government.

The permitting process is a simple two-phase procedure. In the first phase companies present their credentials to show they have the experience, technology and expertise to carry out surveys. Once they have been qualified, they can apply for a permit. “In this second phase we will review their plan in general terms to see if it’s according to technical standards,” said Juan Carlos Zepeda, president commissioner of CNH. “Then we will grant the permit.” The entire process is expected to take about 40 days.

The new information will add to an already solid database of seismic and other geophysical information, and phase 1 data rooms are already open with this information available to interested operators. Zepeda said that 23 operating companies have submitted papers to have access to the data room, including most of the majors.

In the 14 offshore blocks offered in the first phase, almost all have a full 3-D survey, and there are some wells that have been drilled. Pemex has estimated the reserves in those 14 blocks to be nearly 700 MMboe.

Despite the availability of data, Zepeda is excited about developments in seismic acquisition that haven’t yet been widely used in Mexico. One development is wide-azimuth seismic.

“This type of seismic, which is able to take information subsalt, is the type of seismic that we’re just starting to see in Mexico,” he said. “That’s a special opportunity considering that we have extensive salt basins. And every time you have a new exploration technology, it’s worth exploring again.”

Round 1, phase 2, which is soon to follow, will also be in shallow waters in areas with existing fields. Phase 3 will open up onshore blocks, phase 4 will focus on deepwater, and phase 5 will target unconventional acreage.

Despite the recent drop in commodity prices, the bidding rounds are expected to go forward as planned. Zepeda explained that the first three rounds will offer up low-risk acreage with lifting costs expected to be less than $20. “It’s very low-cost and very economical,” he said.

The deepwater round, he said, is less likely to be affected by current commodity prices. “We believe that since deepwater takes such a long time to start producing—from the beginning of the contract to first oil production can take maybe eight years—prices are not relevant for the investment decision,” he said.

The only round that will probably be affected by the current financial climate is the shale round, he said.

Overall Zepeda is quite encouraged by the momentum of the reforms. “The amazing thing is that in less than a week we received nine registration applications,” he said. “It’s quite exciting.”