Mexico expects to put some deep water oilfields out to tender starting next
year as it throws open its oil and gas exploration and production sector to
private investment. The fields include parts of the prized Perdido Fold Belt,
some offshore heavy oilfields, and parts of the technically challenging
Chicontepec formation. The energy ministry is combing through a 68-page wishlist
of fields that Pemex, the state oil company which has held a 76-year monopoly
on the industry, wants to keep. The first tender of fields it loses is expected
by June 2015.
According to government sources, Mexico has as many as 160bn barrels of oil equivalent in total proven, possible, probable and prospective reserves and resources, which include both onshore and offshore oil and gas, as well as shale oil and gas trapped deep underground, which has spurred a game-changing boom in the US. Pemex staked its claim to 97 per cent of the proven reserves, 83 per cent of the proven and probable, or "2P” reserves, and 71 per cent of proven, probable and possible, or so-called "3P” reserves, based on certified 2013 data.
"Most countries don’t offer reserves in bidding rounds. This makes Mexico’s rounds very attractive,” said Lourdes Melgar, hydrocarbons undersecretary in the Ministry of Energy. The government has a deadline of September 17 to rule on the wishlist already submitted, but she said decisions on particular fields could be announced as soon as they are reached to avoid putting Pemex’s entire portfolio in limbo. After that, Pemex could negotiate joint-ventures or partnerships for the fields it keeps. In terms of prospective resources – Mexico has 86.8bn barrels of oil equivalent in deep water and unconventional oil and gas, like shale, and 28bn BOE in traditional resources – nearly 70 per cent would revert to the state if Pemex has its way. That is equivalent to 29 years of production at Pemex’s current rate of about 2.5m barrels per day.
International oil majors are eyeing keenly the deep water prospects which Mexico puts on the block, and will probably be cheered by the news that some of Perdido, Mexico’s first deepwater discovery, will be up for grabs. Ms Melgar said Pemex wanted to keep a "large part” of Perdido, which is near the Great White field being developed on the US side of the Gulf of Mexico by Chevron, Shell and BP. Nonetheless, deep water is not Pemex’s speciality and she acknowledged it would need partners. As such, "some blocks in Perdido” will be offered, and a great deal of interest was expected, given the nearby activity on the US side of the maritime border, she said. Ms Melgar some extra heavy oilfields, which again were not Pemex’s forte, could be available. Chevron and Exxon, which is developing the Kearl extra-heavy oil sands project in Canada, are among the companies with such expertise.
Meanwhile, Mexico’s authorities will assess Pemex’s technical, financial and operational capacity to keep the fields it is asking for. According to the officials, it is "not unthinkable” that Pemex could be asked to keep some assets that were not on its wishlist. The decision-making process could also be delicate as senior government officials sit on Pemex’s board.
Pemex originally wanted to keep a large chunk of Mexico’s shale prospects, but scaled that back and only requested 15 per cent in the end.
Among other prospective resources, Pemex also requested 29 per cent of Mexico deepwater acreage, 59 per cent of shallow-water and 93 per cent of onshore.
Mexico will end up with enough prospects to hold at least 10 bidding rounds, and expects to hold them annually, starting by mid-2015, though authorities were debating whether to offer more frequent shale tenders, Ms Melgar said.
