Ben van Beurden, chief executive officer of Royal Dutch Shell, speaks during the 26th World Gas Conference in Paris, France, June 2, 2015. REUTERS/Benoit Tessier
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The gasps from the audience were clearly audible at the auction of Mexico's oil blocks a month ago as Royal Dutch Shell's hefty bids were announced one by one. The size of Shell's cash payments – $343 million out of the total of $525 million that Mexico earned in the sale – far outstripped its competitors' offers, guaranteeing that the company swept up nine of the 19 offshore blocks.The geological intelligence gleaned from the whale discovery explains why Shell bid so aggressively for the Mexican blocks, something that had confounded industry experts.That equates to about half of Shell's 2017 oil production and would make the reservoir one of the biggest discoveries of the past decade in the industry. Shell declined to comment on the potential size of the reserves.Shell acquired large amounts of specialized seismic data before the auction, about whale and the Mexican blocks, to try to gain a better sense of the geological formations and potential oil reserves under the seabed, according to a source at an oil services company that provides such information.Shell needs to replenish its oil and gas reserves to maintain its production into the 2030s.
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