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Breaking News:

Surprise Crude Build Threatens Oil Rally

Pemex To Farm Out Production At The Trión Oil Field

Offshore Rig

Mexico’s state-run Pemex announced on the 10th June that it has selected the Trión deep-water field for its maiden farm-out deal to other operators, according to Reuters.

Pemex Chief Executive Jose Antonio Gonzalez Anaya explained at a news conference that the area would require $11 billion worth of investment and will likely be operated by a separate company in conjunction with Pemex. Doing so, he argued, would help “share the risk and costs” of operation along with the Mexican oil giant that recently suffered its fourteenth straight quarterly loss to the tune of around $3.6 billion.

Trión was Pemex’s first discovery in the Perdido Fold Belt in the northwestern Gulf of Mexico near the U.S. border, which is believed to contain approximately 30 billion barrels of oil. Trión itself encompasses an area of some 8.7 square miles and is estimated to have the equivalent of 305 million to 500 million barrels of oil.

Gonzalez claimed that there is a “huge interest” by other firms to participate in the farm out of Trión, though he did not specify how many or which ones. Gonzalez anticipates that Pemex will announce its partner(s) for the Trión project on the fifth of December, when Mexico has scheduled its first auctions for deep-water fields.

Related: $50 Oil Has U.S. Rig Count Increasing For 2nd Week In A Row

Mexico broke up its Pemex energy monopoly in 2013, and the following year announced the farm-out process of fields assigned from the “Round Zero” auction. The plan was then delayed until the Pemex announcement last week, which Mexican energy analysts feel is overdue since the long-term development of oil fields could last from eight to ten years.

Tore Loseth, vice president of Statoil Exploration in the U.S. and Mexico, said the Norwegian firm would be interested in collaborating with Pemex on future farm out agreements, yet refrained from commenting on possibility of joining Pemex at Trión.

By James Burgess of Oilprice.com

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