Pemex may lose deep-water in Round Zero

Former energy minister: Jordy Herrera predicts Pemex may miss on some wish list items in Round Zero

Pemex is likely to get much of its wish list in the "Round Zero" process of Mexico's energy reform, but regulators may shoot down its bid to keep ultra-deepwater and unconventional blocks, a former energy minister has predicted.

State-led Pemex has asked to keep about 85% of the country's confirmed reserves following constitutional reforms last year allowing private oil-sector competition for the first time in 75 years.

Former country energy minister Jordy Herrera believes the country's energy secretariat (SENER) will allow the Mexican giant to hold onto about 75% of proven reserves.

"What Pemex might lose is some specific areas in the Gulf of Mexico, in ultra-deepwater fields... For sure all the unconventional areas that are known for the country," Herrera told an audience at the Mayer Brown Energy Conference in Houston on Thursday.

"Why is this? Pemex does not have technology, they don't have money, they don't have the experience to develop those resources."

Pemex may be able to keep a foothold in those areas by entering into joint ventures with external partners, but those transactions will not be part of Round Zero, according to Herrera.

Upstream has previously reported that secondary legislation now under review in Mexico's Congress sees joint ventures taking place through open bid rounds, not direct negotiations with Pemex.

Lawmakers in the country missed an end-of-April deadline to approve secondary legislation to implement the reform, but are pass the details of the changes in a special session over the summer.

Under the proposed rules Pemex would not be required to take stake in prime acreage offered by the government.

The one exception to this case would apply in transboundary areas where Mexico recently signed a hydrocarbons treaty with the US, in which case Pemex is recommended to have a 20% stake.


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