Shell to invest at least $397 million in Mexican deepwater oil projects

FILE PHOTO: Staff members work at the booth of Royal Dutch Shell at Gastech, the world's biggest expo for the gas industry, in Chiba, Japan, April 4, 2017. REUTERS/Toru Hanai

MEXICO CITY (Reuters) - Mexico’s independent oil regulator on Tuesday approved deepwater energy exploration plans for five areas operated by Royal Dutch Shell Plc in Mexican waters near the maritime border with the United States.

The plans commit the Anglo-Dutch oil major to invest at least $397 million (£312 million) over the next four years, but if the drilling proves successful it could grow to some $1.316 billion, according to the regulator, known as the National Hydrocarbons Commission, or CNH.

Four of the areas are located in the Perdido Fold Basin, where significant oil and gas activity exists on the U.S. side, as well as one area further south in the Salina Basin.

At least four wells are planned in the areas during the exploration phase of the contracts, but the plans also account for the possibility of as many as eight, with drilling to begin as soon as the fourth quarter of this year and extending through late 2022.

Shell won exploration and production rights to nine deepwater blocks in the Gulf of Mexico at an auction run by the CNH in early 2018.

Drilling plans for the remaining four deepwater blocks from the company are expected to be presented shortly, CNH Commissioner Sergio Pimentel said, without specifying the date in a session broadcast online.

Reporting by David Alire Garcia, editing by G Crosse