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Mexico’s Pemex Makes Unusual Move With Call For Joint Venture Opportunities

Mexico’s Pemex is looking for joint venture opportunities, the country’s energy regulator said. That’s despite the president’s decision to suspend all new bidding rounds and review all contracts with foreign oil companies signed by the previous government.

In an interview with Reuters, the head of the National Hydrocarbons Commission, Rogelio Hernandez, said, regarding the joint ventures, “I think it will happen during this government. In fact, I see it as imminent.”

The Andres Manuel Lopez Obrador government announced the suspension of all oil field exploration and development contracts last year, as it began to review these contracts for signs of corruption by the previous government. At the same time, the Lopez Obrador administration shelved all planned oil and gas auctions for the duration of the contract review.

According to Hernandez, Pemex has a portfolio of more than 350 projects, and of these, some 100 could be farmed out to partners because if Pemex does not start developing them, the assets will revert to the state.

The process may be coming to an end now, or maybe the government has found that Pemex will be hard-pressed to develop all the priority fields the government identified last year for development. The Lopez Obrador administration plans to increase oil production by 50 percent by the end of the president’s term in office.

This plan will have to be delayed temporarily, as Mexico agreed to cut 100,000 bpd from its average daily to support efforts by OPEC+ and other oil producers to prop up international oil prices. However, Pemex still seems to be sticking to plans for drilling 423 new wells this year and accelerate the development of 15 discoveries, even though, according to some energy experts, more than half of the country’s oil production is unprofitable at oil prices of $30 per barrel.

By Irina Slav for Oilprice.com

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