Thursday, October 2, 2014

México/US: PEMEX, ExxonMobil to Meet Re: Joint Ventures, Deep-Water Projects

According to The Latin American Tribune, Mexican state-owned Petroleos Mexicanos (PEMEX) said on Thursday (October 2) it has agreed to hold talks with US oil giant ExxonMobil aimed at exploring potential joint business opportunities.

The memorandum of understanding will enable the two companies “to lay the foundation for dialogue and the assessment of business opportunities” in exploration and production, as well as transportation, refining and distribution of hydrocarbons, PEMEX said in a statement.

The agreement, signed by Pemex CEO Emilio Lozoya and ExxonMobil Chairman and CEO Rex W. Tillerson, also establishes an exchange of best practices in the areas of sustainable development, the environment, human capital and industrial safety.

The MOU is part of PEMEX’s efforts to attract new technologies, capital and partners that will allow it to compete effectively in the new domestic hydrocarbons market, guarantee production and create jobs, Pemex said.

COMMENT: Last year, Mexican President Enrique Peña Nieto pushed through constitutional changes that ended Pemex’s 75-year-old monopoly and opened the country’s energy sector to private investment.

PEMEX is adapting to the overhaul by striving to become a more autonomous, modern and competitive company and turn around its disappointing results in recent years.

México’s crude production has fallen by roughly 30% from a high of 3.3 million barrels per day in 2004 due to a sharp drop in output at offshore Cantarell, formerly México’s most productive field, and a lack of investment by PEMEX, the country’s largest taxpayer.

The overhaul is aimed at reversing that decline by allowing private companies to develop crude reserves for the first time since 1938.

Supporters of the reform argued that the participation of major multinational energy companies under profit-and production-sharing contracts and licenses is needed to develop promising deep-water reserves in the Gulf of México and shale-gas resources. 

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