Pemex Needs Partner For $10.7B Offshore Oil Project

Big Oil and independents will have to reach deep into their pockets if they want to win the farm-out rights to Mexico’s Nobilis-Maximino offshore field, as the cost of the project has been estimated at US$10.7 billion. This is what the head of the country’s energy regulator told Reuters in an interview, adding that the National Hydrocarbons Commission will tender the farm-out rights on January 31 next year, along with the auction of several more offshore fields.

Juan Carlos Zepeda said the Nobilis-Maximino field, which contains an estimated 502 million barrels of oil equivalent, could yield 174,000 bpd at peak production levels. This makes the project crucial for Mexico’s oil industry, which has been fighting declining production for a long time against a backdrop of rising energy demand. The field could also produce around 265 million cu ft of natural gas.

First output from the field is expected to be in 2024, with estimated production costs estimated at US$27 a barrel, which is sure to spark the interest of potential partners.

Pemex already has the rights to develop the field, but it needs a partner—and the agreement, when one is found, will likely be the same as the one the Mexican energy major previously struck with BHP Billiton for the development of another large-scale offshore project, Trion.

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Trion is the first joint venture of Pemex, a result of a wide energy sector reform in Mexico. The companies will develop the Trion field under a 35-year license contract and Pemex will not need to contribute any part of the US$11-billion cost of the project for at least three years.

The Mexican company has already invested around a billion dollars in Nobilis-Maximino, and earlier this year company executives said they expected the company’s partner in the venture to put in at least the same amount before Pemex starts pouring money into the field again.

By Irina Slav for Oilprice.com

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