OE13: Mexico market briefing

UK Trade & Investment offered a session on petroleum investment opportunities in Mexico on Wednesday, presented by Enrique Cornejo, head of energy & environment for UKTI in Mexico City.

Mexico’s national oil company, Petroleos Mexicanos (PEMEX), is the fifth largest crude oil producer in the world and ranks fifteenth in natural gas.

Production has undergone a steady decline, from 3mmbo/d in 2005 to 2.5mmbo/d in 2012. The downfall can largely be explained by the decline of the Cantarell field, which has gone from producing over 1 mmbo/d in the 1990s to less than 0.5 mmbo/d in 2012.

This led PEMEX to shift focus to deep water, where there may be 29 billion bbls of oil. The company has invested US$4 billion in deep water, acquired 90,000sq km of 3D seismic and drilled 22 wells (11 discoveries), including 4 in ultra-deep water.

With production declining, PEMEX estimates that it needs to invest $215 billion. The 2008 energy reforms and expected legislation should improve the investment climate. PEMEX has recently opened an international procurement center in Houston, led by Raul Mendoza, to pre-certify vendors and streamline contracts. PEMEX is exhibiting at OE for the first time this year.

In the last five years, UKTI has organized 14 energy trade missions from the UK, resulting in five contracts for UK’s Petrofac, and a $140 million contract for Subsea7 on the Line 60 project in the Bay of Campeche.