Pemex Is Looking For Partners In New Deepwater JV

Mexico’s energy giant Pemex is looking for partners for the development of two oil and gas-rich areas in the Gulf of Mexico, Maximino and Nobilis, unnamed sources have told Reuters. A spokesperson for the company confirmed that Pemex is in search for a partner, adding that the board will review the proposal.

If the board approves it, Pemex will approach the country’s oil and gas regulator to gain approval for the launch of a tender. Winners, according to the Reuters sources, could be announced in December. They will work with Pemex under the so-called farm-out contracts, which the Mexican government devised as part of efforts to attract more foreign investments for its energy industry after breaking down Pemex’s monopoly.

Under Mexico’s farm-out contract, the energy regulator is the one that chooses which foreign company will develop which field, rather than Pemex, which would usually be the case with farm-out contracts.

Mexico opened up its energy industry for private investment a couple of years ago, and last fall it held its first large-scale tender, offering 10 oil and gas blocks in the Gulf of Mexico. Among the winners were Chevron, Exxon, Total, Statoil, BP, and CNOOC.

With Pemex’s monopoly now over after 75 long years, the auction will help to revitalize Mexico’s energy industry with an influx of fresh investments. As a result, the US Energy Information Administration has upped Mexico’s 2040 oil and gas production forecast by 76 percent.

Related: Reeling From Low Oil Prices, Saudis Look To Freeze Megaprojects

This, however, will only happen if the government holds more tenders. Last month, the National Hydrocarbons Commission warned that crude oil reserves fell by a tenth between 2015 and 2016, to 9.16 billion barrels. Since 2013, the decline has been more substantial, at 34 percent.

The head of the energy regulator, Hector Acosta, said along with the announcement that more new drilling is necessary, otherwise what remains of the country’s recoverable reserves will run out in less than nine years.

By Irina Slav for Oilprice.com

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