Mexico’s PEMEX seeking allies for deepwater blocks

Mexico’s state-run oil company PEMEX plans to reach out to existing partners to form new joint ventures for a pair of deepwater blocks it won in a January auction, according to a Reuters report.

PEMEX is reportedly running out of time to find partners for key oil and gas projects as the government looks to show progress from its energy agenda ahead of a July presidential election. The oil company is relying on foreign capital to reverse declining output and refining amid an ambitious energy reform.

Finding partners willing to take part in the ventures “has indeed taken more time than planned, but we are moving forward,” PEMEX Director Carlos Trevino said in an interview with Reuters. The search for partners will start next year, after completing its exploration programs.

The company has streamlined its processes and bundling of assets to speed up the farmout process, which requires foreign companies to buy into existing PEMEX projects. “We have reduced internal approval times to 30 days and formed clusters of blocks to configure projects,” he was quoted to say.

The company will start talks with oil companies, including Chevron Corp., Inpex Corp. and BHP Billiton Ltd., which are its partners in other oil and gas projects, Trevino said.

PEMEX also expects to find companies this year to invest in its Nobilis-Maximino and Ayin-Batsil projects in Mexico’s Gulf under more flexible terms, after failing to land partners for those developments in 2017.

Mexico reportedly blames the lack of interest in the projects on competition from Brazil’s offshore offerings, low oil prices, and costs PEMEX previously incurred that would be transferred to the partners.

Around 90 exploration and production contracts have been signed so far with companies including Chevron and Eni.