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Pemex accelerates farm-out plans

Written by  Friday, 09 June 2017 10:20

Pemex plans to accelerate its farm-out strategy in a move to increase production, and gain access to the latest technology, the company’s CEO José Antonio González Anaya said at the Mexican Petroleum Congress 2017 yesterday (8 June).

González Anaya addressing the Mexican Petroleum Congress 2017. Image from Pemex.

Moving forward, Pemex is looking to increase investments, enhance competitiveness, and optimize how the company spreads its financial and technological risks.

González Anaya announced that Pemex’s 2017-2021 business plan is already being deployed under the guiding principle of profitability.

“Thanks to this approach, important, tangible progress has been made by the company,” González Anaya said.

The biggest challenge Pemex faces in the near term, according to the CEO, is consolidating the company’s financial situation.

González Anaya said that 2017 will be a watershed year for the state-owned energy giant, a year in which a primary surplus will occur for the first time in five years.

The Pemex CEO has said many times that the company will take advantage of the Energy Reform, which includes farm-outs.

In May, at the Offshore Technology Conference (OTC) in Houston, González Anaya said farm-outs and partnerships were at the top of the company’s priority list.

He said that Pemex has stabilized its finances, and believes that the Mexican national oil company will return to overall profitability by 2020.

“We are trying to accelerate [farm-outs] in many, many ways,” González Anaya said at OTC in May. “The signal that we want to send is that we are actively looking for partners in all of the areas.”

Pemex’s first farm-out was carried out in December 2016, at Trion in the deepwater Gulf of Mexico.

“It was beyond what we were expecting,” he said at OTC. “And it shows that Mexico is an interesting place to invest. The Gulf of Mexico is an attractive place to invest, and Pemex is a good partner to do it with."

“As I say in a cliché, God didn’t draw the borders. If there’s oil in the North side, 30km north [of Trion in the Gulf of Mexico], chances of there being oil, profitable oil, 30km south, are very, very high,” he told the audience at OTC.

In October, Pemex’s second-ever farm-out opportunity will be held for the shallow water areas of Ayín-Batsil, off Campeche. The fields have an estimated proven, probable, and possible 3P resources of about 281 MMboe; and 46 MMboe in proven reserves.

The deadline for bids was originally set for 19 June. However, Mexico’s CNH delayed the farm-out opportunity until 4 October.

Pemex, currently ranked as the eighth largest producer of oil in the world, fails to compare to its higher position of the third-largest producer in previous years.

In November 2016, Pemex unveiled its 2016-2021 business plan that highlighted the company’s aggressive farm-out plan.

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