X

Sign Up To Our Free Newsletter

Join Now

Thanks for subscribing to our free newsletter!

ERROR

  • 3 minutes Texas forced to have rolling brown outs. Not from downed power line , but because the wind energy turbines are frozen.
  • 7 minutes Scientists Warn That Filling The Sahara With Solar Panels Is A Bad Idea
  • 11 minutes United States LNG Exports Reach Third Place
  • 15 minutes Joe Biden's Presidency
  • 16 hours Texas Supply Chain Massacre
  • 47 mins U.S. Presidential Elections Status - Electoral Votes
  • 6 hours America Makes Plans to Produce Needed Rare Earth Minerals Domestically
  • 9 hours Texas forced to have rolling black outs, primarily because of large declines in output from fossil fuel power plants
  • 13 hours Former BP Exec "Biden not in war against oil" . . Really ?
  • 32 mins Here we go - again: plug-in hybrids cost motorists more than what they were told
  • 2 days Good Marriage And Bad Divorce: Germany's Merkel Wants Britain and EU To Divorce On Good Terms
  • 2 days Speaker Pelosi, "Tear Down This Wall" . . around Capital Building
  • 4 hours An exciting development in EV Aviation: Volocopter
Is The OPEC+ Alliance Coming To An End?

Is The OPEC+ Alliance Coming To An End?

Saudi Arabia and Russia’s historic…

Iraq Could Seek An Exemption From OPEC+ Output Cuts

Iraq Could Seek An Exemption From OPEC+ Output Cuts

Iraq is considering applying for…

COVID-19 Is Causing The GCC To Crumble

COVID-19 Is Causing The GCC To Crumble

The 39-year-old Gulf Cooperation Council…

Joao Peixe

Joao Peixe

Joao is a writer for Oilprice.com

More Info

Premium Content

Post-Energy Reform, Mexico Signs First Oil Deal with Russia

Russia's Lukoil has announced an agreement with Mexico's state-run oil company Pemex for exploration, extraction and cooperation on environmental best practices.

The cooperation memorandum was agreed on the sidelines of the World Economic Forum in Davos, Switzerland, and represents the first foreign partnership to be forged since Mexico moved to reform its energy sector in December and to Pemex’s 75-year state monopoly over exploration and production.

Since 1938, Pemex has controlled the entire hydrocarbons production chain in Mexico. In the past decade, however, falling investment and a sharp drop in production from 3.8 million barrels per day in 2004 to 2.6 million barrels in 2013, has forced a government rethink that will open doors to international oil companies.  

Related article: All Eyes on Implementation of Mexican Oil Reform

The entrance of international oil companies on the scene is expected to lead to a revival of production in Mexico to 3 million barrels per day by 2018 and 3.5 million barrels by 2025.

Mexico’s Congress is currently debating and drafting secondary laws to implement a sweeping energy reform bill passed last month that will open up the market to international oil and gas companies.

Congress is expected to issue a draft and negotiate secondary legislation within 120 days, but there remains some ambiguity as to when bidding rounds would actually be opened up to international oil companies, with most predicting sometime next year.

Mexican Congress has 12 months to develop energy-related environmental regulations and to establish the National Center of Natural Gas Control and the National Energy Control Center. Regarding downstream, the Ministry of Energy will issue permits for processing and refining.

Related article: BG Group to Start First Honduras Exploration

Among the companies that have expressed interest in partnering with Pemex to explore untapped deep-water reserves in the Gulf of Mexico are Shell, Exxon, Repsol and Petrobras.

According to Southern Pulse, the language of the bill they are considering now allows for “risk contracts” in which the “owner of the resources [Mexico] transfers the economic risk of exploiting those resources to a third party without lessening its ownership.” The third party, called a “contractor” or “operator” receives compensation tied to their success in exploiting said resource, though the state would retain the majority. Companies will not be permitted to count unproduced reserves on their ledgers, although they can list final contracts and projected profits.

At Davos last Friday, Mexico drew in over $7 billion in investment from Pepsico, Nestle and Cisco as a result of economic reforms to boost foreign investment and growth.

By. Joao Peixe of Oilprice.com


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News