GO
Loading...

UPDATE 1-INTERVIEW-Pemex aims to keep oil and gas fields after reform-CEO

David Alire Garcia and Ana Isabel Martinez
Friday, 13 Dec 2013 | 7:38 PM ET

(Adds quotes, deep water and Chicontepec details)

MEXICO CITY, Dec 13 (Reuters) - Mexico's state-run oil company Pemex aims to keep all of its current oil and gas developments through the initial allocation of operating rights scheduled for the first half of 2014, Chief Executive Emilio Lozoya said on Friday.

The allocation will be one of the first steps after Thursday's congressional approval of a sweeping energy overhaul that aims to lure foreign investment and boost oil and gas output in Latin America's second-biggest economy.

The so-called "round zero" gives Pemex first rights to explore and produce crude at the country's onshore and offshore fields, either by itself or in association with other companies.

"Clearly, everything we have in production as well as areas where we've undertaken exploration and seismic studies and where we know that there's major hydrocarbon potential, we will also ask to keep those areas," Lozoya told Reuters.

That includes the company's existing deep water Gulf of Mexico oil and gas developments, Lozoya added, sitting at a conference table in the executive suite on the 43rd floor of the company's Mexico City headquarters.

Those developments, which stretch back some six years, have yet to yield any commercial-scale production.

By contrast, millions of barrels of oil are produced every day by dozens of operators on the other side of Mexico's maritime border with the United States.

"Depending on what's best for Pemex ... in some areas, Pemex will continue as sole operator and we will not share (fields) with other companies because we know them very well," said Lozoya, who managed a private equity fund before joining the campaign team of President Enrique Pena Nieto last year.

COMPLEX BASIN

While Lozoya said that some round zero allocations could be operated along with "strategic partners," he declined to specify a date for the initial allocation.

"Round zero should be ready during the first half of next year," the 39-year-old said.

At over 10 billion barrels, Mexico boasts Latin America's third-largest proven crude reserves after Venezuela and Brazil. But it also has nearly 30 billion barrels of prospective resources in its territorial deep waters of the Gulf of Mexico, widely viewed as the main prize for international oil majors.

The Pemex chief said the onshore Chicontepec basin, regarded by some analysts as an ideal candidate to farm out to private-sector operators, will stay part of his company's portfolio.

"Pemex has already invested a lot of money in certain parts of Chicontepec, and we expect to recoup this money and have a positive yield," he said, adding that private companies might still partner with Pemex on the geologically complicated basin.

The Chicontepec basin, discovered more than 80 years ago, is located in the east-central states of Veracruz and Puebla and is home to about 40 percent of Mexico's certified hydrocarbon reserves, or about 17 billion barrels of oil equivalent.

However, the company has repeatedly missed production targets at the complicated basin, where millions of barrels of oil are scattered across many small deposits, a feature that makes production costly and slow.

This summer, Pemex put out six fields at Chicontepec to tender in a bid to attract new investment to develop the area, but only found takers for half of them.

Last year, Chicontepec produced an average of 74,800 barrels per day (bpd), a fraction of the 2.5 million bpd Pemex produces.

(Editing by Dave Graham and Bob Burgdorfer)