Mexico will soon open itself up for international energy investments, but the state-run Pemex energy giant isn’t going away.
While visiting Houston this week, Pemex officials said the leaner, more-businesslike company is eager to partner with Houston-based and U.S. energy companies on many deepwater and shale exploration projects going forward.
During the next two weeks, the state-owned crude producer Petroleos Mexicanos, or Pemex, is going through a “round zero” with the Mexican government, in which Pemex will propose what areas onshore and offshore it would like to keep for exploration and oil development. Private, international bidding is expected to begin in mid-2015.
Froylan Gracia Galicia, Pemex executive chief of staff, said Pemex is going from a monopoly to a “state productive enterprise,” he said. “We’re going to be more profitable.”
Pemex does plenty of service contracts now with international companies, but moving forward it will also do production-sharing or profit-sharing contracts with new partners, as well as licenses.
Galicia said he wants Houston-based and other American energy companies to play big roles.
“It’s potentially an enormous deal,” he said.
Pemex Procurement International Inc. offices are already in Houston, he said, and leadership there knows all the Houston players.
“We’ve managed to be closer (to the U.S.) than we ever were before,” Galicia said.
Houston-area companies can partner with Pemex for the onshore shale plays and deepwater exploration fields that companies have more experience with in the U.S., Galicia said.
“We already know there’s a lot of oil there, but we need enhanced recovery and technology,” he said. U.S. companies are “very successful for developing the technology and skills for tapping into this shale,” he added.
George Gonzalez, a Houston-based partner with the Haynes and Boone LLP law firm focused on energy contracting with U.S. and Latin American companies, said Houston and Mexico are “natural allies” that are on the verge of big opportunities together.
“There is this energy here — this feeling that anything can happen,” Gonzalez said.
“This is not a once-in-a-generation event, this is a once-in-three-generations event,” he said, citing the nearly 75 years Mexico has closed off its energy sector from private investment.
Jose Antonio Perez Chavez, the subdirector of Pemex international business development, said Mexico has about 160 billion barrels of recoverable oil. He noted that Texas and Mexico share the booming Eagle Ford Shale, and the Mexico portions are potentially ripe for development.
“Eagle Ford — it’s the same formation that passes through Mexico,” Chavez said. “We foresee that the shale industry will have an important boost from the private sector.”