Report: Pemex’s Third Bid Round: Chicontepec

July 22, 2013

factory by Mexico Energy Intelligence *, 07/17/2013

On  July 11, 2013, PEMEX took its third steep toward implementing its ten‐year farm‐out strategy that began with the Multiple Service Contracts of 2003. An auction was held at Pemex’s regional headquarters in Poza Rica for a financial interest in future production in six blocks in the nearby province known as Chicontepec.
The contract model was designed to align the interests of Pemex in increased oil production in marginal fields with the interest of the contractor to derive incremental profits from fees linked to production.

The  contractor’s interest in the revenue stream from production would be limited to a fee‐per‐barrel. As had  occurred during the previous auction, there were blocks in the auction that received no bids: two in 2012, three in 2013. The surprise in 2013 was that some bidders deployed an unimagined bidding strategy: do the  work for free—or almost. The winning offers (in US$/barrel) were these: 1 cent (Halliburton), 49 cents  (Petrolite) and 94 cents (Diavaz).

The  new bidding strategy exploits a loophole in the current, revised contract and allows bidders to ignore Pemex’s maximum tariff. This report examines the problematic consequences for Pemex and traditional oil companies that are likely to follow from the use of this alternative business model.

Read the summary of this report here…

*Mexico Energy Intelligence® (MEI) is a commercial and policy advisory service offered by Baker & Associates, Energy Consultants, a management consultancy based in Houston.


Pena Nieto Ponders Easier Way to Open Mexican Oil Industry

October 5, 2012

Bloomberg, 10/4/2012

Enrique Peña Nieto

President-elect Enrique Pena Nieto’s team is looking at ways to open up Mexico’s energy industry that wouldn’t require changes to the constitution, a top economic adviser said.

Pena Nieto wants to break state-owned Petroleos Mexicanos’s monopoly on refining and exploration and is considering legislation that wouldn’t involve the two-thirds congressional majority needed for constitutional changes, Ildefonso Guajardo said. Pemex, as the company is known, is struggling to reverse seven years of production declines that have cut output 25 percent from a peak of 3.4 million barrels a day in 2004.

Read more…


Pemex Overhaul Harder as PRI Misses Mexican Congress Majority

July 3, 2012

Bloomberg, 07/03/2012

Incoming Mexican President Enrique Pena Nieto will struggle to overhaul the state-run oil industry, a project he has called his “signature issue,” after his party won fewer seats in Congress than pre-election polls forecast.

That leaves Pena Nieto dependent on the opposition to overhaul tax and labor laws, and his PRI well short of the two- thirds majority needed for constitutional changes to open up the oil industry to private investment. He must now convince much of the opposition and his own party to back a law that he says is needed to reverse seven years of declining output in the largest supplier of crude to the U.S.

Read more…

 


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