Russia’s Lukoil has an¬nounced an agreement with Mexico’s state-run oil company Pemex for exploration, extraction and cooperation on environmental best practices.
The cooperation memorandum was agreed on the sidelines of the World Economic Conference Forum in Davos, Switzerland, and repre¬sents the first foreign partnership to be forged since Mexico moved to reform its energy sector in Decem¬ber 2013 and to Pemex’s 75-year state monopoly over exploration and production.
Since 1938, Pemex has controlled the entire hydrocarbons production chain in Mexico. In the past decade, however, falling investment and a sharp drop in production from 3.8 million barrels per day in 2004 to 2.6 million barrels in 2013, has forced a government rethink that will open doors to international oil companies. The entrance of international oil companies on the scene is expected to lead to a revival of production in Mexico to 3 million barrels per day by 2018 and 3.5 million barrels by 2025.
Mexico’s Congress is currently de¬bating and drafting secondary laws to implement a sweeping energy reform bill passed last month that will open up the market to international oil and gas companies.
Congress is expected to issue a draft and negotiate secondary legislation within 120 days, but there remains some ambiguity as to when bidding rounds would actually be opened up to international oil companies, with most predicting sometime next year.
Companies that have expressed interest in partnering with Pemex to explore untapped deep-water reserves in the Gulf of Mexico are Shell, Exxon, Repsol and Petrobras.
