New Delhi: ONGC Videsh Ltd, the overseas arm of state-owned explorer Oil and Natural Gas Corp. Ltd (ONGC), has lost out on its bid for two oil blocks in Mexico’s first licensing round in 88 years.

OVL had bid for two out of the 14 shallow water areas blocks offered. Its bids were rejected by the Mexican government’s upstream regulator as they were below the floor for share of profit that ranged from 25% to 40%.

The company was the sole bidder for Area 6 and 12 but the bids were “rejected as it was considered too low," according to Mexico’s National Hydrocarbons Commission (CNH).

OVL was prequalified alongside global giants like Chevron Corp. and ExxonMobil Corp. to bid for 14 shallow water blocks in the Gulf of Mexico. Mexico awarded just two of the 14 blocks tendered in an auction that saw participation of nine companies. As many as seven companies submitted bids for one or more of the blocks in the southern Gulf of Mexico. Numerous blocks received no offers, and others had bids that were below the minimum requirement for profit-sharing with the government.

According to CNH, two blocks were won by Mexican company Sierra Oil & Gas in a consortium with Houston-based Talos Energy Llc and UK’s Premier Oil Plc, which offered to pay the government 55.99% of the operating profit from the first block and 68.99% from the second.

Besides OVL, other firms that bid, included Norway’s Statoil ASA, Hunt Overseas Oil Co. and Murphy Worldwide Inc. with Petronas Carigali International.

Winning bids were determined by the highest amount of operating profit to be shared with the government, and the amount of investment pledged above the required minimum.

After 14 shallow-water blocks of Round-1, the CNH will auction nine other shallow-water blocks in the Gulf of Mexico in September and 26 onshore blocks in December. The 14 shallow water exploration blocks covered nine fields in Round-1 are estimated to hold reserves of 356 million barrels of oil and oil equivalent gas.

ONGC Videsh has stake in 36 projects in 17 countries, including Azerbaijan, Kazakhstan, Russia, Brazil, Colombia, Venezuela, Iraq, Syria, Libya, South Sudan, Sudan, Mozambique, Bangladesh, Myanmar, Vietnam and New Zealand.