The following is a translation of an interview given by Pemex CEO Emilio Lozoya Austin to the newspaper Reforma, published today in the “Negocios” section under the byline of journalist Alexandra López.
What is next in the short term for Pemex?
In the very short term, the first thing we will see is the internal restructuring of Pemex from 4 subsidiaries to 2 larger subsidiaries. The objective of this restructuring is to make the decision-making process of Pemex more efficient and to increase the overall efficiency of the company’s operational processes. In an organization of 150 thousand workers with presence all over the country, this represents a challenge.
During the round zero, which reservoirs does Pemex intend to keep, which ones will it exploit through a joint venture and which ones does it expect to leave off its list altogether?
Another important part of our short term strategy, and by “short term” I mean 2014, will be to make an evaluation of our exploration and production portfolio, especially of those fields that we have been working with for quite some time already. In shallow waters and in the extraction of light crude oil, Pemex is in no need of joint ventures or partnerships. In the extraction of heavy oil from shallow waters, perhaps some type of partnership contract or service contract might be applicable. In mature fields it will surely be attractive for us to enter into partnerships with companies who are willing to share risk with us; this would probably apply to deep water ventures as well.
What percentage of its current production would Pemex like to keep?
Today, we want to keep one hundred per cent of our productive assets. We also wish to keep any assets where we have executed exploration tasks and found oil and we will prove to have the technical capacities necessary to do so. If we have invested in any resources in a reservoir that is not granted to us, the law stipulates that there will be an economic compensation to offset that investment. We do not plan to keep the entire Gulf of Mexico.
Have you talked to any oil company interested in entering into a partnership with you?
A very important number of them, yes. My predecessors and I have an ample and fluid business relationship with the main global oil companies.
Could the coming change in Pemex’s tax regime lead to a change in the color of the company’s numbers from red to black?
If the price of oil goes up, then surely yes. If the price of oil drops, then probably not.
Is Pemex prepared to compete with private companies?
We are completely trained to do so. We have expertise and capacities when it comes to certain types of reservoirs; in other areas, we are lacking capital, technology or financing.
Is Pemex at a disadvantage when competing with oil companies that have been working for some time with these new types of contracts?
We believe that being part of a partnership is better than only having a company under contract for service purposes that does not necessarily have its incentives aligned with our own.