Courtesy Image from El Financiero

Courtesy Image from El Financiero

Farming out exploration and production blocks in Mexico’s hydrocarbon assets is clearly a trending topic in the international oil and gas community. Just a few days after the enactment ceremony of the Secondary Laws, PEMEX’s E&P Director General Gustavo Hernández revealed a list of potential partners to tap into the country’s deepwater opportunities. Given that developments in this segment are usually tackled by more than one operator, his forecast was highly optimistic regarding the probability of joint-ventures in the Gulf of Mexico. According to him, since Chevron, Total, British Petroleum, Shell, Anadarko, Apache, Eni, among others, already operate on the US jurisdiction of the Gulf, the possibility of sharing risk and operating together with these oil majors is highly probable.

Courtesy Image from lukoil-overseas.uz

Courtesy Image from lukoil-overseas.uz

Besides statements offered by PEMEX’s executives, many reports elucidating a number of companies’ interests in collaborating with the now productive enterprise of the state have been released over the past year which have sprung much to talk about among the Mexican oil and gas industry’s key stakeholders. The first foreign partnership as a result of the Energy Reform was established with Russia’s second largest oil company; Lukoil and PEMEX signed a cooperation memorandum for exploration and production endeavors in January of this year. Following this strategic route, Chevron was also quick to dash in to work with PEMEX. The third largest energy company in the world by market value expressed its interest in May to expand its presence in the Mexican portion of the Gulf as well as in shallow water and shale assets. Having worked in joint developments in Argentina, Brazil, Angola, and others, the IOC seems confident enough to take on projects with PEMEX in the near future.

Courtesy Image from en.presidencia.gob.mx

Courtesy Image from en.presidencia.gob.mx

Later in July, Japanese Prime Minister Shinzo Abe visited Mexico with a strong desire to strengthen economic ties between both countries. During a meeting with President Enrique Peña Nieto, an MOU (Memorandum of Understanding) of technical cooperation and development of human resources was signed by Mr Hirobumi Kawano, President of Japan’s Oil, Gas, and Metals National Corporation (JOGMEC) and PEMEX’s counterpart Emilio Lozoya Austin. According to JOGMEC’s press release of the MOU with PEMEX, a broad range of activities are included such as “technological joint studies including geological and geophysical studies and evaluation and application of the latest technologies available to provide solutions for challenges in exploration, development, and production of crude oil and natural gas.”

Courtesy Image of larepublica.co

Ronald Pantin, Executive Director of Pacific Rubiales

Although new production activities in Mexico’s assets are still to be well-defined and development, it is evident that worldwide interest is effervescing among the oil and gas industry’s top players, and Latin America’s key oil companies are not lagging behind. One month ago, Ronald Pantin, Executive Director of Colombia’s Pacific Rubiales expressed his interest in bidding for blocks in Mexico’s fresh and reshaped industry. Just behind Ecopetrol in production terms of the South American oil-booming country, Mr Pantin was keen to highlight in an interview to Portafolio.co that the company’s participation in the country’s assets will likely be similar to its operations in Colombia; this includes an involvement in onshore heavy crude production as well as shallow water light and heavy crude oil fields. This announcement comes hand in hand withGrupo Alfa’s increase of its total stake in Pacific Rubiales to 17%. Signaled by the Energy Reform’s fast-paced nature, Mr Pantin has also revealed the opening of Pacific Mexico, which is expecting to bid during the upcoming rounds. An even more recent announcement, and perhaps one that is unexpected to the common spectator, came from ONGC Videsh (OVL), the overseas subsidiary of India’s Oil and Natural Gas Corporation. According to the Indian Express, OVL’s Managing Director NK Verma is in talks with PEMEX for “a potential tie-up to pick up equity in exploration and production assets.” This is not entirely unsurprising given the fact that India is the third largest importer of Mexican crude.

Narendra K Verma Courtesy Image from sarkaritel.com

Narendra K Verma, Managing Director of OVL
Courtesy Image from sarkaritel.com

All in all, all of these interests from a variety of companies should not come as a surprise. Emilio Lozoya’s speech at the Round Zero and Round One presentation this past August 13th (Read post: http://www.oilandgasmexico.com/2014/08/14/emilio-lozoya-austin-the-future-of-pemex-part-2/) clearly stated PEMEX’s objective in the short term. “The second pillar in PEMEX’s strategy is the most important in the short term regarding partnerships and associations for the development of the fields assigned to it in Round Zero. We are talking about 10 projects that are considered either to be of significant technical complexity, very capital intensive or to have a strategic importance for PEMEX and its project portfolio when considering the contribution of other companies as a complement to PEMEX’s capital, knowledge, and operational capabilities.” Talks and agreements are underway to unplug Mexico’s bottlenecks through the development of its untapped assets and its mature fields; it is just a matter of how fast, how well, and how safely operations are carried out in order to guarantee the adequate exploration and production of the country’s reserves.

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