The Energy Reform has expanded PEMEX’s horizons and will permit it to look for participation opportunities outside Mexico, José Antonio Escalera Alcocer, Director of Exploration at PEMEX E&P, told the Mexico Oil & Gas Summit 2017 on Wednesday at the Mexico City Hotel Sheraton María Isabel.
“As a company, PEMEX had been invited to participate in projects abroad but the law did not allow it. However, we now have the possibility to participate abroad and we are working on a project that will permit us to invest outside Mexico, particularly in North and South America,” said Escalera, although he did not name the project or its location.
Participation in international rounds is one of the initiatives PEMEX E&P will implement as part of its 2017-2021 Five-Year Plan to boost reserves. “In light of the complex environment we are facing, we need to find new ways to cement our competitiveness,” Escalera said. The business plan also includes prioritizing value areas for PEMEX E&P, increasing the efficiency of operations and investments, accelerating the implementation of the Energy Reform mechanisms and participating strategically in the next bidding processes.
Escalera said the new competitive environment allowed PEMEX E&P to become more efficient in its processes. “We come from a closed ecosystem where, for 75 years, we had the responsibility of capturing the potential of the oil industry on our own. However, we are now learning in an ordered and methodological manner, following international standards, how to participate in this new market.”
Though there have been accusations regarding PEMEX’ lack of investment in the sector, Escalera says that the company has the knowledge and the technology to continue being an active participant. “Due to low oil prices, investments in the sector all around the world fell approximately 62 percent. PEMEX’s investments in comparison only fell 37 percent.” Though reduced investment is not necessarily good news, Escalera says that it is a trend that will likely continue until companies can obtain better prices and operate more efficiently.
Regardless of the challenges, Escalera said the company has enjoyed significant participation in the discoveries in shallow waters but that there are still opportunities in different fields. “Due to price constraints, we have not ventured into exploring fields of dry gas,” he said. Deepwater is another untapped opportunity. “We have developed a program for deepwater. Currently we lack the capacities to carry out a project of such magnitude on our own. However, the reform allows us now to share both the risks and the results.”
Escalera noted that despite it monopolistic history, PEMEX has increased its capacities and can compete in the current licensing rounds. “We participated in both Round 1.4 and 2.1, winning blocks in both. We want to show the industry that we are competitive and that we can be a preferred partner for the upcoming rounds.”