Document shows that RPT-Mexico’s Pemex awarded five contracts to boost oil production, but failed to attract big players.
According to four sources with knowledge of the matter, and to a document viewed by us, the Mexican state oil company Pemex has signed five of the eleven new joint venture agreements it planned to sign before the year's end. Pemex, however, was unable to 'attract' major companies and the amount of production that the ventures could add is too small to help Mexico reverse its declining crude oil output. Pemex is trying to convince investors who are reluctant to sign up for 21 new joint ventures that could produce 450,000 barrels of crude oil per day, or about a quarter the amount of oil forecast by Mexico in 2033.
One source said that "so far, it hasn't worked out as expected." She added that the contract model had not been attractive to the major players. "The production of those projects won't?make a significant difference for Pemex."
They are known as mixed contracts and will be signed by the Mexican government on December 19. This would be a first for Mexico.
STATUS OF 6 OTHER CONTRACTS UNCLEAR
The document, which bears the logos of both the Mexican government as well as Pemex and is undated, lists the companies who bid for contracts and the winners of each of the onshore projects listed: Tupilco terciario (Terciary), Sini-Caparroso (Caparroso), Cuervito (Cuervito), Agua Fra and Tamaulipas constituciones.
Four sources have confirmed the authenticity of this document.
The document didn't say what happened to the six other contracts that Pemex said it had expected to secure. Pemex refused to comment on the issue. It had said that it anticipated the 11 contracts would add nearly 70,000 bpd to this year's production.
The document stated that Pemex would be the primary partner in the first five contracts, and the stake of the state company will range between 40-85%.
The details of the contract, including its value and Pemex’s participation, were not previously reported.
The document stated that Consorcio Petrolero 5M del Golfo had won two contracts, while Geolis Petrolera Miahuapan, and Cesigsa each won one. Pemex will receive $50 million as a sign-up bonus from these companies.
Consorcio 5M del golfo does not have a website and LinkedIn messages sent to the company were unanswered. Geolis Petrolera Miahuapan, and Cesigsa have not responded to requests for comments.
The contract model was unclear as to what services the different companies would be providing, but the central idea is that the companies will develop the fields with Pemex.
Pemex is responsible for the commercialization of?hydrocarbons under the laws that govern the new contract model.
PEMEX PRODUCTION FALLS
The heavily indebted firm has struggled over the past few years to maintain its crude oil and condensate production of 1.6m bpd, which is a sharp drop from the 3.4m bpd that it produced 20 years ago.
Claudia Sheinbaum, the Mexican president, has stated that she expects Pemex to dominate national production and reach 1.8 millions bpd by 2030.
One of the sources said that Pemex might try to award?other contracts?this week. The information, however, is not public.
The modest results contrast sharply with the interest that Mexico's oil exploration and production projects attracted from the world's biggest oil companies during the administration of former president Enrique Pena?Nieto.
Recently, it was reported that Pemex’s heavy debt load and certain conditions associated with the contract model may be a barrier to reaching production goals.
Pemex, however, has stated that the conditions are important to it and its revenue contribution to the state coffers.
The strategic plan for Pemex presented in August states that "This contribution is important both to stabilize the base production, to compensate for the declining of mature fields and to ensure compliance with the nation's energy commitments."
(source: Reuters)
