Fuente y Autoría: Rigzone by Amy Stillman
(Bloomberg) — Petroleos Mexicanos is accelerating efforts to bring on partners before an election that could slow foreign investment in Mexico’s oil industry.
The Mexican state oil giant brought in a new head of joint ventures last week as it prepares to choose partners in at least seven onshore oil fields later this year. Pemex also expects to make an announcement in late July on three refinery joint-venture agreements and may borrow as much as $3.5 billion — all before the arrival of a new government in December.
Over the past several years, Pemex has failed to stem long-term production declines, reverse refinery losses and added on debt. Should presidential front-runner Andres Manuel Lopez Obrador win the vote on July 1, he has said that he will dial back energy reforms that Pemex says are crucial in helping it overcome these challenges.
A victory by Lopez Obrador would “put at risk Pemex’s partnership projects, not only in the upstream sector but also the refineries and other business segments,” said Alejandra Leon, an analyst at IHS Markit in Mexico City. “That is evidently leading Pemex to try to conclude joint ventures before the change of administration.”
Lopez Obrador propounds a more nationalistic energy strategy than the current government, which opened the oil market to private investment in 2013, ending Pemex’s monopoly after almost eight decades.
The leftist candidate has said that he may suspend new oil auctions, will review contracts already awarded and could temporarily freeze fuel prices. Such plans would hurt Pemex’s attempts to bring in much-needed foreign investment and the technical knowledge and expertise of global oil majors.
Lopez Obrador has said he could build two new refineries at a cost of billions of dollars each, which could come from public and private funding. He also aims to send less crude abroad and instead use it to feed Mexico’s six refineries, which are running at 42 percent of their capacity.
As is customary when Mexico elects a new government, Pemex will likely have a new chief executive officer, whose policies are expected to mirror that of the new administration, to replace Carlos Trevino.
Pemex’s board of directors named Jorge Lomelin on June 22 to accelerate oil and gas farm-out deals and refinery partnerships. In April, it announced the appointment of Ulises Hernandez as the director of resources, reserves and partnerships.
Mexico will auction 37 onshore areas and nine areas in the shale gas-rich Burgos Basin on September 27, as well as the farm-out of seven onshore areas with Pemex on October 31.
Separately, Pemex is tweaking the terms for the farm-out of offshore fields that failed to attract interest a year ago, and evaluating the potential farm-out next year of four other onshore areas and seven exploratory onshore blocks.
“Our plan is to have more farm-outs in the future, to execute new exploration and production projects in deep waters and unconventional areas, and take advantage of partners’ experience of developing these resources in other parts of the world,” said Hernandez.
Pemex will “continue with these processes” despite election uncertainties, he said. The company is building pipelines and drilling new wells to stabilize production at between 1.96 million and 1.97 million barrels a day by the end of the year, from 1.87 million in May.
Others are less confident it can meet these goals. “To some extent, the farm-outs will be subject to the new administration, so those are not impermeable to change and adjustment,” said John Padilla, managing director of energy consultant IPD Latin America LLC. At the same time, the farm-outs are “taking away precious reserves from Pemex that are the foundation of its bond issuances,” he said.