Petroleos Mexicanos, the fifth-largest crude producer, is seeking to retain all of Mexico’s 14 billion barrels of proven oil reserves as the country opens to foreign investment for the first time since 1938.
Pemex, as the state-run oil company is known, sent a bid to the Energy Ministry on March 21 requesting to keep all fields where proven reserves are available and 83 percent of Mexico’s 24.8 billion proved and probable, or ‘2p’, oil reserves, Chief Executive Officer Emilio Lozoya said yesterday. Mexico passed a law last year to break Pemex’s production monopoly and allow companies such as Exxon Mobil Corp. and Chevron Corp. (CVX:US) to explore for oil in deep waters and onshore shale gas deposits.
By leaving 4.2 billion barrels of 2p oil available for bidding by new investors, there is “a significant amount for the market to start up with,” Lozoya said in an interview at the company’s headquarters in Mexico City. Pemex sought 8.9 billion barrels of 60.2 billion barrels of unconventional prospective reserves, he said.
“We wanted to make sure that Pemex continues with enough reserves for our diversified portfolio and creates a sustainable production environment for the medium and long term,” Lozoya said. Pemex wants to “leave enough room for the industry to develop and monetize the reserves to the benefit of the country quicker than Pemex would have continued to do on our own.”
Pemex’s crude production has fallen for nine consecutive years as the company lacks investment to tap prospective reserves, Lozoya said. To boost diminishing production, it will look to form joint ventures in various fields.
“We are looking for partners in mature fields, in shale, in deep water and in shallow waters,” Lozoya said. “We will benefit from technological partnerships.”
The Energy Ministry will have until September to determine which fields Pemex can maintain in the first round of non-competitive bidding, called “round zero.” The company will compete in successive bidding rounds, Lozoya said.
Pemex has left open a portion of the Chicontepec field, northeast of Mexico City, for bidding. The company has had “limited positive results” in Chicontepec even though it has significant reserves, he said.
Of Mexico’s 113 billion barrels of prospective reserves, Pemex has only requested to maintain 31 percent in the first bidding round, he said.
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