Round Zero Makes Pemex Major Player

 

Mexican regulators on Wednesday granted Pemex the bulk of its acreage request as the nation's oil industry opens to private participation, consolidating the state-led company's status as a major force despite losing its monopoly status. Meanwhile, the country's initial Round One acreage offering will include a range of opportunities including shale, deep-water, shallow-water, heavy oil and the nation's Chicontepec area.

Those contracts, to be awarded between May and September of next year, will cover probable reserves for development of 3.78 billion cubic feet equivalent and prospective reserves for exploration of 14.6 trillion cfe.

Round One will include ample feedback from industry and see some initial terms released at the end of November. Data rooms are expected to be open early next year

"With this act, we begin the major task of getting energy reform under way," energy secretary Joaquin Coldwell said during a ceremony in which he presented Pemex chief executive Emilio Lozoya Austin with the company's first acreage assignment.

Mexican energy ministry Sener assigned Pemex all of its requested probable reserves, which amount to 83% of the country's supply, estimated by the US Energy Information Administration to be about at least 10 billion barrels of oil equivalent.

Sener was somewhat stricter on prospective reserves, where it awarded the company 67% of what it asked for or 21% of the national total.

"Pemex will be a central actor in the expansion of the national oil industry, which is the central objective of energy reform," Lozoya said.

Pemex also revealed that it will offer partnerships or farm-outs in 10 "priority" areas on prime deep-water finds in the Perdido fold-belt, as part of the initial round.

For Round One, Mexico's National Hydrocarbons Commission (CNH) envisions offering about 109 exploratory blocks of which 11 will be in the deep-water Perdido area, deputy energy minister Lourdes Melgar said.

The goal is to attract investment of $8.525 billion per year in the first few years, a figure that could expand to $12.6 billion when investments from farm-outs are included.

The precise blocks to be included in the round will be finalised at the end of November, when preliminary commercial and fiscal terms will be released for the blocks, CNH president Juan Carlos Zepeda Molina said at the event.

Data rooms will be opened in February and terms finalised after the conclusion of a consultation period with industry.

The CNH expects to begin awarding contracts in May and continue throughout the middle of the year, wrapping up with deep-water contracts by September.